Josh

Rob Walling:
Today’s sponsor is hres. They’ve built a full-blown SaaS marketing platform to help make your business discoverable. They recently launched a tool called Brand Radar, which helps you analyze your visibility in ai, chatbots like chat, GPT, or perplexity and compare against competitors. There’s no need to juggle a bunch of disconnected tools. Get hres all in one platform to make your brand unmissable in a fast moving world. Get started today at hfs.com/awt. That’s A HRE fs.com/a wt. This is Startups For the Rest Of Us, and I’m your host, Rob Walling. In this episode, I’m joined by fan favorite Derek Rimer and we answer your listener questions before we dive into the episode. Early bird tickets for MicroConf US 2026 are now on sale. The event is April 12th through the 14th in Portland, Oregon. And right now ticket prices are as low as they will ever be, and we have sold out our last four events. Ticket prices will go up on October 22nd or after the first 100 tickets have sold. If you’re planning to come, you should get your ticket now. That’s at microcomp.com/us and you can use promo code Rob 50 for $50 off. And with that, let’s dive into listener questions there. Grimer, welcome back to your 21st appearance on Startups For the Rest Of Us.  

Derrick Reimer:
Wow, did you go back and count?  

Rob Walling:
I did. Just like a minute ago, I didn’t even ask Chat. JBTI went to startups For the Rest Of Us dot com. I went to the search, search for your name and then I walked through and there were 20 appearances. I think you hold the world’s record  

Derrick Reimer:
Really best appear. Oh, that’s  

Rob Walling:
Awesome. I can’t imagine anyone else that’s been on that much. I think Ruben’s been on like five or six times. Hot take Tuesday. A r has probably been on, I don’t know, eight or nine if I were to guess A couple more. Tracy’s probably been on around there. But yeah, aside from Mike and I think my original co-host, I think you hold the record, man. Wow, congratulations. Awesome. How does that feel? Is this one, is this such a culminating moment in your  

Derrick Reimer:
Life? It is, yeah. I’m honored to hold this world championship of this title starts For the Rest Of Us appearances. Yeah. Oh,  

Rob Walling:
You get to just Lord it over all the other I  

Derrick Reimer:
Will  

Rob Walling:
Past guests. I  

Derrick Reimer:
Definitely will.  

Rob Walling:
You are back by popular demand. The reason I keep bringing you back is because every time I mention that you might be on the show, people are like, oh my gosh, another episode with Derek. I really want to hear Derek’s opinion. I really want, and I’m just like, all right, well maybe he maybe should just be Derek For the Rest Of Us. No, I never said that. No, it’s good to have you back. And of course, per our usual format, we are going to be digging into some listener questions. If you are listening to this and you’d like myself and or Derek to answer a listener question in the future, you can email it questions at startup For the Rest Of Us dot com. Or you can just head to the website and there’s an ask question link in the top nav that gets you to a video ask page. You can submit a text question. Of course, I would discourage that if you submit audio or video, it goes to the top of the stack. And so today, I believe we have four audio slash video questions and then I snuck one text every once in a while because man, the text ones they kind of languish for a while, so I snuck one in so that we could dig in. And with that, let’s dive into our first question about competing against a startup incumbent with more money.  

Speaker 3:
Hey Rob, longtime listener, big fan. Today I have a question which my co-founder and I have been struggling with somewhat and just to set the land. We are based in Germany and the Netherlands and we just cannot find enough information on this particular subject. I’ve checked Reddit. There just isn’t anything that really touches on this problem enough, which is we are in the B2B SaaS space. Well, we build softwares of businesses can make B2C their own Cs lives easier. So you can think agencies, you can think hospitals in HR tech, right? And we have an incumbent who’s hitting up the entire market and they have been around a bit longer. They’re not a large company, they’re a startup. They’ve been around since 2020. And every door we knock, they just seem to be behind. And now there’s a lot of information about competing against a massive conglomerate. 

In many ways our prefer competing against a massive conglomerate. They’re slower, they’re lazy, et cetera. But this guy has raised around many millions in 20, 22 years ago. We are entirely confident that our solution is better, it’s more fit for the market. We’ve gotten some of their clients to have a look at us, one or two have switched. I think now we’re slightly more affordable. We are certainly better software, much, much simpler to use and we do provide more value in some ways. But my question I guess is in summary is how do you compete against an incumbent who’s a startup, who’s a few years ahead of you who not a massive conglomerate, there’s enough information about the massive conglomerates, but it’s competing against the slightly more established startups who are perhaps slightly slower but equally as hungry as you are that I really were really, really struggling with. Thanks for everything. I hope this gets on. We might be bankrupt before we listen to it, but yeah, you get the point.  

Rob Walling:
I really like this question and I like the way that Shane differentiated between, it’s not a 10,000 person company. It’s not a stodgy old whatever, a Fortune 500, fortune 1000, but that it’s another startup that is better funded and as a hungry as essentially as he and his co-founder are. So what are your thoughts to kick us off on this one?  

Derrick Reimer:
This is definitely a tricky place to be in because if you think about the classic, like choosing an old 800 pound gorilla in a space to compete against, usually you can feel pretty confident that they have a lot of legacy, they have a lot of bureaucracy, maybe people who have been there a long time that care about certain things not changing. So just inherently, you can lean on being a lot more agile and nimble and you can run circles around them on being able to be responsive to customer requests and you can give them more time and support. And these things all remain true when you’re competing against another hungry startup, but that hungry startup is likely to have a lot more attributes that overlap with you. So it, it’s tough. I would say I’ve experienced kind of both sides of this in my own companies. 

So a couple of things to think about. I guess one is that a funded startup is going to have some inherent pressures that you don’t necessarily have if you’re bootstrapping a big one being like they have to make sure they’re targeting a big enough tam. The total addressable market is large enough to kind of satisfy all the stakeholders. And so that potentially means you have an opportunity to outmaneuver them by positioning yourself more specifically for a niche, something that would be just a little too specific for the comfort level of the funded startup that’s trying to, maybe they have the traditional VC aspirations of a hundred million dollars in five years, so they just can’t afford to narrowly position themselves. So you might have an opportunity there. Another thing that came to mind, I think Shane mentioned kind of being a slightly cheaper alternative, and I would be a little cautious about that, especially if you’re competing with someone who has deeper pockets than you, they can potentially afford to underprice themselves in the market in order to land grab a little bit. 

So I would think about taking the offset strategy. How can you potentially have a more premium experience and charge more and position yourself as if you want something that’s cheap and cut rate, you might go this direction, but if you want something that’s premium where we can, and you have to layer on actual premium benefits, you can’t just call yourself premium, but maybe that means you have a more personalized onboarding experience or your customer service is better in some very specific quantifiable ways. And basically just sort of contrast yourself as a different position in the market so you’re not trying to literally have the same sort of premium level positioning as them.  

Rob Walling:
I really like that approach. I think everything you’ve said I agree with and my yes, and to that is I would be giving a lot of thought or doing some research about where are they messing up because there’s always some flaws in execution, whether it’s their sales people or their sales model requires a demo in an annual contract and everyone hates that. And so can you just do the opposite? Is their product lacking? You said chain said their product is better. And it’s like, cool. And how do you position yourself such that you’re different? You’re different. That’s the biggest thing. It’s like you don’t even have to be better. You just have to be better for a subset of the market that’s called positioning. You elbow out a corner of that market and you say, we are really good at this one thing, and sometimes you’re only good for 5% of the market. 

And so you will cap your growth at that point. And then you kind of wedge in, you land and expand and you expand out. How do you find these things they’re doing wrong? Well, you try to talk to their current customers, customers, ex employees on LinkedIn. How many dms have I sent to people who used to work for a competitor of ours and then had a conversation with the sales guy, had a conversation. It works. It’s a technique. And it can also go on Capterra G two and look at product reviews. And I think a few people have talked about this, but I really like this thought of go to the one star reviews. What are people upset about? And maybe that’s your angle. And it’s not just about building a better product, of course, it’s about then communicating how you’ve built a better product and how you’re better, I guess, positioned how you carve out that positioning in this space. 

And with all that, if you truly are differentiated, then yeah, you can consider charging a premium. Sometimes charging a premium is part of that positioning where the premium, whatever, you could also take the other tact. I like how you said if they have infinity money, they can just drop their price and be true. Question is, will they, if they already have a bunch of traction at a certain price point, let’s say they’re $500 a month and up and you come in at 300, will they drop their price? And if they do, they’re going to decimate a bunch of their MRR. Are they willing to do that? So it could be a game of cat and mouse there. I’m not saying that’s the right choice, but with Drip, we were what, 20% more than MailChimp? I think 20 to 25%. And we were like, well, we were way cheaper than all the marketing automation. 

Infusionsoft and such was like five three to 500 and up and we were like 50 to a hundred. I dunno, we were less expensive than them and a better product and they weren’t willing to lower their price because they had all that MRR and they maybe even had private equity investment. So I do think there’s, maybe it depends on that one. All that said, I’ve seen exactly what you said happen too with, we had a TinySeed company, there was a competitor. That competitor raised 10 million in venture and they did just drop their prices to a third of the TinySeed company and they did a lot of damage there. So it happens both ways. And I think I would try to assess more. I try to get more information if I could.  

Derrick Reimer:
Yeah, something I’ve seen happen, and this has happened in my space as well, sort of a race to the bottom on a freemium play. I don’t know if that’s happening at all in Shane’s market, but this sort of clear strategy of we’re trying to suck up the bottom end of the market and just get ’em in the door for free. We want the word of mouth and the benefits that come with that. And we’re trying to monetize at a higher tier, for example. And I mean, that can be tricky to outmaneuver when people are like, well, I’d like to use your thing, but there’s a free alternative, so maybe I’ll just use that. And then they’re kind of locked into that ecosystem. But I think, I don’t know, as you’re communicating with prospects about what you’re observing as just the realistic market dynamics, I mean that’s something to call out. It’s like, well, okay, this is free. What do you get with free? Where is this company actually focusing? And you can justify charging money for something if you’re communicating that we charge money because we actually provide service behind this, and we’re not just monetizing at a tier of market that doesn’t apply to you.  

Rob Walling:
It all reminds me of an old Paul Graham essay, and this is probably from like 2002 or something, but it’s still online for sure. He keeps all his archives up there. And I remember being surprised at this realization, but nowadays I’m like, oh yeah, that’s totally obvious to me. The realization he said was, if you’re a startup and you’re entering a market, you should not be concerned with the big incumbents. They are not your biggest threat. The biggest threat is the other startup down the street that’s trying to do the same thing. And I remember being like, what? But why? The incumbent has so much money? And it’s like, no, you actually do want to compete against really big, slow moving dumb incumbents with entrenched interests in politics and a big, they have a lot to lose. And the other startup, if they’re at your level or just a little ahead of you with a little more money, they’re the one that’s really hard to compete with. 

And if you enter a space where you’re kind of the only startup and there’s a bunch of other incumbents where the market’s been proven, that’s a really nice position to be in. And the moment you do, and if you start talking about it online, you will have competitors because people will see like, oh, this is an interesting market. So again, Shane, I appreciate the question of this specificity. It’s not just like, oh, I have a better funded competitor. It’s like, no, they’re a startup too and they’re as hungry as I am, and how do you do it? And the trick is, you just got to find out. To me it’s like what are their Achilles heels? And maybe that’s product and maybe it is pricing as Derek and I have batted around, it sounds like you’ve built a better product, so then maybe you try to position it better. And then how are they doing marketing and sales? Are they missing any angles there? Are they overselling and being over pressure and the model there? Are they missing marketing edges? It’s a challenge, but  

Derrick Reimer:
I’m curious to hear your take. What would you say to this sentiment that you shouldn’t worry about your competitors at all? This is a common trope we hear, right? A lot of people talk about this and as a way of saying, I’m going to take the high ground or something like that, or it’s more strategic, more stoic, more zen, whatever, to just focus on your own business and don’t pay attention to competitors at all. And it’s something that people talk a lot about. I think rarely in practice do people actually ignore their competitors, but what would you say to that sentiment?  

Rob Walling:
Yeah, I remember speaking of 2002, Joel Spolsky wrote an essay and it was like, don’t pay attention to your competitors. Pay attention to your customers. And I was like, oh, that’s an interesting thought. I would’ve thought you’d look at your competitors a lot. So as I’ve done this, they’re really, and I’m just going to say this, there really needs to be a balance because I think if you’re not looking at all or paying at all any attention to your customers, you are doing yourself a disservice in the long run. You cannot pay attention to customers for a few months, but if you try to do that for a few years, you need to know where they’re going and what’s happening because product-market fit drifts and the market itself will drift in different directions. And suddenly, if you have this, let’s say you have pretty strong product-market fit and you’re growing, and then tomorrow a completely open source and free version of your tool has launched up, this happened to multiple TinySeed companies, actually that market has changed and that is now a competitor. 

And you have to think, okay, do I have a free plan? Do I drop my prices? Do I go all up market and I have a free and it’s a thousand and up for the what do you do? You do in fact have to react to some of these things. However, do you remember after we got acquired and we were in the Leadpages drip slack and with this 200 employees or whatever, and there was a competitor channel and people were pumping stuff in there every day, it drove me fucking nuts. It was way too much, way too much paying attention to all the little things. And it was like, no, what I really needed was AI to probably didn’t exist back then, but to look at that whole channel over the course of a week and kind of summarize some key takeaways that actually mattered because the volume was just like, no, no, no, no, no. 

We are way over indexing on this. And in fact, there were some folks there that we worked with that I think over-indexed on looking at competitors because they themselves didn’t have the core vision and strong opinion about the market and our product. You and I have all made very opinionated software there, and we had a real strong opinion about what the market was and it should go. And we were trying to be market leaders and sometimes we succeeded and other times we didn’t with stuff we launched. But if you don’t have that vision or that opinion, then you’re looking to go back, well, what did they do? Well, now should I copy them? You know what I mean? And I think it can be a crutch. So that’s my spectrum. There’s the not at all. And then there’s the too much. Have you given this thought? What do you think about it?  

Derrick Reimer:
Yeah, I think I would agree with pretty much everything you said. You can’t just ignore them in part because one of your biggest jobs in selling your own product is helping your prospects understand the difference. And if you don’t know anything about the other players in your space, you’re not helping them make that decision with clarity. I’ve noticed this a few times in a few sales cycles I’ve had to go through in purchasing various products, and I was doing my diligence, I was getting quotes from a few different providers and having conversations as most of them required some kind of demo conversation. So I went through that and I was basically bringing up like, okay, so I’m looking at this other company, I’ve done my research trying to see how you guys are different, but I’d love to hear in your words, how are you different? Help me understand why I should choose you in light of the other alternatives, because if someone is a rational buyer, they’re at least going to do some kind of diligence. And if you don’t have a good answer to that, you’re just doing yourself a disservice. So I think understanding what you’re competing against and then of course looking more long-term on where the market’s going. Like you said, I think it’d be a big blind spot if you’re trying to gather all of that insight just from customers. You’re just missing a data source.  

Rob Walling:
I agree. And I remember knowing I had it all in my head, I think you did too of that space, specifically ESPs, marketing automation. And I remember folks coming up, whether it was if they were curious in becoming a customer, or even within the Drip lead Pages team, there were folks who were new to the product and they would say, oh, so there’s active campaign. How are you different? How’s Drip different and MailChimp, how’s Drip different? I remember genuinely saying, well, we do some things these things better, and they do these things better. Be honest about it too. That’s the other thing on a sales call, do you have to tell ’em all the great things that ActiveCampaign is over you? Probably not, but you can admit that you may be the best product overall, but for this particular use case writer in these areas or in this feature set, whatever, you can’t be perfect.  

Derrick Reimer:
And that honesty, I think resonates too with, I mean, depending on who you’re trying to sell to and what your buyers care about. But I know for me, when I had a few of these conversations, sometimes the vendor would just be like, well, we’re the biggest, we’re the number one dah, dah, dah, dah. And they were just, it was just ego driven all about, look, we’ve achieved this in this top quadrant on this G two report or whatever, and that’s all we care about. And it’s like, okay, you’re not building your case. Demonstrate that you’re being honest about this.  

Rob Walling:
Yeah, yeah, it’s a turnoff, isn’t it? So cool. Now I have to go find this for myself. I need to know where the edges are. Every piece of software has edges, the edges of where you aren’t the best. So yeah, thanks for that question, Shane. Hope our thoughts were helpful. Next question comes in from Ryan and it’s about when to move on to pivot or power through.  

Speaker 4:
Hey Rob, my name is Ron Hemlock. I’m from Lancaster, Pennsylvania, and my question is about do I keep building what I’ve been building or do I pivot something else? And then how can I know when to power through or pivot, switch it up. So for context, I was a freelance videographer for the past three years, and then I transitioned to become a developer because I fell in love with the SaaS model. So for the past two months, I’ve been building a tool that helps other freelance videographers generate video ideas and scripts, not only for themselves but also for their clients because typically freelance videographers create a lot of videos every single month. So I currently have 29 people who have signed up, and that’s really cool because I’ve built the MVP and got this 29 people in a span of only two months. And that honestly feels pretty fast. 

I’ve only put out a couple of social posts within Facebook groups and whatnot, but the problem is that there’s 29 people, they’ve signed up, they use the tool a few times, but then they haven’t been back since. And so I feel like this is telling me that I’m not actually solving an urgent problem, and if I really wanted to solve the core of the problem and make the tool even cooler, I feel like I would end up just building notion, which is already a powerhouse tool. Yeah, and the more I listen to your podcast, the more I’m realizing that the problem I’m solving for may not be urgent or strong enough to charge a lot of money for and keep people around for a long time, especially since Notion is free, for example. So that’d be tough, especially in the film and videography landscape. So my question is, if you were in my shoes, would you continue building this tool and figure out how to differentiate it in a way that is competitive with other products? Or would you try looking for a different market for the tool, or would you stop building the tool altogether and just look for a different problem to solve? I would hate to keep building the tool for another three to four months and find out doesn’t actually help anyone curious to know what you think.  

Rob Walling:
Thanks. Alright man. So he’s built software for videographers, sounds like he’s doubting, doubting if he’s made an aspirin or really built something that people want. What are your thoughts for him on his options?  

Derrick Reimer:
So he mentioned, okay, 25 people have signed up and it’s not clear whether they’re paying, I’m assuming they’re not paying that maybe they’re just kind of signing for a trial or something to test it out at least. And he said that the retention is not, hasn’t been stellar. It must be tracking whether they’re logging back in and they’re not really coming back. So what I would do as a first step is try to interview as many of these people as you can. 29 is not a big number. You’re not going to talk to all of them. So I would reach out to all of them, maybe incentivize them with a gift card or something. Can I have 30 minutes of your time? I really want to just learn about what’s going on in your world and get a copy of Deploy Empathy. It’s a good kind of summary of not paid to say this, just it’s a good summary of the jobs to be done methodology with scripts and some other just sort of actionable takeaways you can apply to your business right away. 

And Michelle has done a good job with that. So I would pull some of those playbooks from there and just kind of run jobs to be done style interviews to figure out were these people just wandering in from a Facebook ad and not really trying to solve some burning pain point that they have or is there something there? I think he’s operating from a hypothesis of or from a place of having this hypothesis informed by his own experience in the industry, which is good. That’s good to have that. He didn’t just choose this randomly, he was a videographer himself. So it’s possible that something’s there. It’s also possible that this is just envisioning something that he would’ve found useful himself, but that doesn’t necessarily translate to will people actually pay for it. So I think there’s more data to be gathered here before making a decision.  

Rob Walling:
I think that’s what you got to do. I mean can also, this is tough, right? Because it’s like we have these terms product-market fit, and it’s like what does that actually mean? And usually it means, well you’ve built a product. I mean this product-market fit is the several steps into this journey. The first one is, can I even find a problem that a business has, or in this case these freelance videographers, so it’s more super SMBs, right? It’s like hobbyist plus plus. And I know that they’re charging for things, but they think more consumers I think than businesses. And it’s like you found a problem probably that you had and either these 29 people didn’t have it or it’s just not worth the squeeze to solve it in this way. I think it’s probably one of those two. And so you start with a problem and then it’s like what are all the possible solutions? 

There can be 10 different solutions to this. I could hire a virtual assistant, I could do it myself. I could just not do this thing. I could use software for it, I could use Notion for it. There’s a bunch of solutions. Finding problem, solution fit is where you’re at right now. You’re still trying to find that. And then it’s like, okay, now do we build a product around it? Can we reach people at scale and below our cost to acquire blah, blah, blah? There’s all the unit economics of a business. So there’s these steps. I saw a diagram about this the other day. I was like, oh, that’s actually pretty cool. But it was kind of laying that out and Ryan is in that spot of this is the hard spot where it’s really fuzzy. And for me, you have to have conversations with people like you’re saying, and you have to ask yourself the gut feel here, do you think this problem is really, really that desperate? 

And if not, can you pivot this piece of software into something that is similar enough? It’s like, oh, I’m going to add a feature or I’m going to approach it in a different way or whatever. Or as you’re saying, should I start over? And that to me, when pivoting first came out, they would say Slack, it was a video game company. And it’s like they pivoted the video game into Slack and said, that’s not a fucking pivot. You just started a new product. Let’s not, let’s be real about the right pivot was overused To me, a pivot is like there’s still some core of the thing you’re doing. Drip was a pivot where we had the email capture widget and sequences and that was it. And then we pivoted into becoming a full-blown email service provider and there’s Zoom in and do about pivots and there’s 11 different pivots I think. 

But I think the thing Ryan to think about is like you asked, should I do this? Should I do that? Here’s the thing. It’s like, I don’t know. I don’t know. And that’s the honest answer is this is such a hard place to be. And the question I’d ask is, do you still have ideas? Do you still have to do this? It sounds like you have enough data that the current thing that you’ve built, isn’t it? Do you just start over with something you’re more excited about or given that you have built something and got some traction, do you keep, like Derek said, have conversations and try to figure out is there some version of this problem or an adjacent problem that you already have a start, you have kind of a kickstart into solving? I don’t know that I have any more than that. This, it was one of the hardest parts, not hardest, certainly the fuzziest parts of the journey is this early time of, I mean you were here right before Savvy Call, remember this for a year or something? You were doing static kit and you were like, these are problems and you were going after ’em and it’s like the signals are really muddy and it’s usually not very clear.  

Derrick Reimer:
Yeah, that’s the other thing I’ll mention. It’s even after doing these interviews, because done a lot of customer interviews over the years at different stages of the business at the super early stage and at the more mature product stage, and I will say at all stages, it is still extremely difficult to pick up on good signal. So even with this sample size, there’s a very real chance you would go through that and come up inconclusive or trying to spot patterns. It’s really fortunate when you can actually land on something that’s like, aha, I can see a pattern in the market and I think I can extrapolate this pattern and we can be off to the races. That’s where a lot of this stuff at the early stage is like you’re starting with a well-founded hypothesis hopefully, and you’ve kind of at least napkin out the business plan on how you could envision this working based on everything. And then you’ve done the right thing in putting together an MVP and trying to test it as early as you can. But yeah, you’re looking for some kind of signal, something to catch some kind of response, and when that’s absent, it’s really tough to know where do I go from here? And so it is a matter of searching for signal or like you said, resetting with another idea that you’re really excited about and then trying again to see if you can find that signal.  

Rob Walling:
So thanks for that question, Ryan. Hope it was helpful. Our next question comes to us from Martin.  

Speaker 5:
Hey, Rob Martin here. First time caller, longtime listener. I’m the founder of photo consent at GDP Art SaaS tool for photographers and marketing teams. I’m a non-technical solo founder and I’ve hit all the problems that you often mentioned on the podcast. My issue is that I work with a couple of really great freelance developers, but they’re always tied up with other assignments with other clients. So my project never gets enough time and progress doors, all hours goes into maintenance and security updates, no new features, and even the smallest update can take a year. So I’m stacked on a plateau and I have really, really slow growth. I’d love to bring in a more stable developer or even better technical partner, but I don’t know where to look and since I don’t code, I don’t have any way of judging if someone’s work actually could. So what should I do? Any advice from you would mean a lot to me, and thank you, Rob, for everything you do, bye.  

Rob Walling:
We get some variation of this question and it’s usually either how do I find a technical co-founder or how do I find the marketing sales? We get this to the show periodically. I actually get it a lot via email and dms, and I think I want to caveat everything with you and I are probably going to give ideas of how we would think about doing it, but this question really, it’s so similar to me to someone writing it and saying, I would like to find a spouse or significant other. How do I do that? And it’s hard. It’s possible. It’s just hard, right? There’s no silver bullet easy answers to this. Much like you would say, well, a spouse or significant other, well I guess go to dating apps and swipe right, you know what I mean? It’s like, I don’t know, you would do some stuff and it’s a bunch of work and you’re going to have a lot of, I guess time investment and you might make the wrong choice and then you might need to break up and then they own part of your company and all this stuff. 

We can go down that whole rabbit hole. But the idea here too is if you find a co-founder have vesting, have four year vesting with a one year cliff such that if things don’t work out after a few months, they don’t walk away with a big chunk of your company. We have seen TinySeed applicants that we were unable to fund because a co-founder walked away with 30 to 50% of the company and it’s like now we can’t fund it and no one down the line will. So just a brief word warning before we get there, but with that, I’d like to kick it to you. What are your ideas on how to fund a technical co-founder?  

Derrick Reimer:
Yeah, I’m trying to put myself in this because obviously I am a technical founder myself, so I’m trying to think of this from the lens of if someone were trying to court me, what would be potentially effective? 

Because it’s funny, I jotted a few notes down ahead of us recording and the literal first bullet point I put down is finding a co-founder is kind of finding a spouse, just that exact sense. It’s that level of effort and kind of unpredictability I guess, because a lot of things have to come together in just the right way and it’s a very human problem. This is not an engineering problem. This is a squishy soft human problem of do we get along? Do we have the same motivations? Are we looking for the same outcome? I mean, there’s so many things to consider before going into business with somebody, but even just getting to the stage where you can start to have those conversations, where do you find this person? And I think it’s swimming in the circles where those other people are likely to be. MicroConf is a great place because there’s a lot of people at different levels. 

There’s people with mature businesses that are probably not going to be looking to partner up with somebody, but then there’s other people who are there to get into the industry, and a good chunk of those people aren’t necessarily partnered up with someone. They’re either technical or non-technical coming in trying to start something and might make a good pairing. But I think in order to get to the place where you can actually start seriously talking to someone about Do we want to get married? You got to date ’em a little bit. You got to meet, you got to build rapport, and I think this just happens through the hallway track at MicroConf is a great place for this. I’m sure there are other venues where you could do this, but local meetups perhaps, or there’s other places where people interested in doing similar types of business as you would hang out. So I would think of that as the step one, I guess.  

Rob Walling:
Yeah, I would agree. And it’s going to obviously takes some time and effort. There are some co-founder matching services that exist and all the reviews, not all the reviews, a lot of the reviews are like, yeah, this don’t work. They’re really hard because this spouse matchmaking services also aren’t going to work. Within MicroConf, probably two years ago, two and a half years ago, we went down, we spent a couple weeks saying, let’s start a co-founder matching service, and we went down how we would do it with personality tests and assessments and this and that, and then we would pair you up and then you get three options and then you’d meet ’em all and blah blah via Zoom and such. And what we realized, well, we realized a couple of things. Number one, I still don’t think it’ll work very often in, and I’m not saying we’d never do it, but I was like, we have to charge like $3,005,000 for this to make it. 

It’s so much fucking effort. And so it was like, I don’t know that this is a viable product. A lot of people have the need, but are they actually willing to pay for that to solve that problem? I don’t know, because they’re really early stage and so they don’t have a lot of money doing it. It’s that kind of thing. Anyways, so I have thought about this because it comes up. The thing that you’re going to be thinking about is as you look for this, I think there are four places where you need to think about compatibility, and the first is goals. Do you want to build a sweet little lifestyle business doing 20, 30 grand a month and the two of you split that and it’s just great and you work as little as possible, or you just do your thing and you have side projects? 

Or do you want to build a seven or eight figure SaaS company or do you want to build a unicorn? And there’s more than three? Those are just three off the top of my head. Finding someone with similar goals I think is important because if you have, I’ve seen folks who, one founder wants a lifestyle business and one founder wants to exit for 30 million bucks, and those are different trajectories. Second thing is just personality. You don’t have to be best friends, but you should get along. You’re going to spend a lot of time together and be able to have a drink and have a conversation, and there’s just a click, just a culture fit between the two of you. Just a friendliness again, even if you’re not best friends. The third one is the one that maybe is a question mark for me. I’m not a hundred percent sure this belongs here, but it’s like work style. 

There’s something about some people really like to work solo and don’t interrupt me. Some people are super extroverted and it’s like, dude, I want to be on calls and collaborate on everything. And that would drive me nuts if my co-founder wanted that. I remember when it was just you and I right in early days of Drip, and it was like we would text a couple times a week or a couple times a day and then it’s like, show me some screenshots and we get together once a week. And it was like, that was plenty. We just didn’t need the intense extroversion. And so I dunno if it’s work style or introvert extrovert. There’s something there that I think, and maybe that just comes down to personality, but I think work style and personality are actually two different things I could get along. I have friends where personality wise, they’re great and I like hanging out, but I don’t know that I could work with ’em. 

So I do kind of break it apart there. And then the fourth is technical acumen. Are they a good developer and goal’s, personality and work style? I think you’re going to have to evaluate yourself. I just don’t think anybody’s going to do it. Technical acumen, which is really what people always bring up. I’m looking for a technical co-founder, but I don’t know how to assess a technical, technical acumen is important, but it’s one of four things that I’ve just named. And so technical acumen, find a senior super senior dev that pay him a consulting rate a hundred to 200 bucks an hour to help you hire this person. I’m not saying technical acumen is easy to assess, but it’s probably easier to assess than these other three that I mentioned. So I’d probably be giving a lot of thought to how am I going to assess this? And this is why it’s so hard, is to find someone who has same goals. That alone is hard, who has a personality to get along with and works in the same way as you do. It can happen, but it’s spinning a roulette wheel a little bit, and it’s trying to find that special match.  

Derrick Reimer:
Yeah, I think about Ben Orenstein, my previous podcast, co-host, founder of Tuple, co-founder of Tuple. They ultimately ended up kind of going their own paths in part because some wanted to move away and be remote, and Ben’s like, I really want to be in an office with people. I’m super extroverted and I’m actually not happy working this way where we’re not able to meet up together. Also, things change. They made some of these decisions deeper into the business, so that could always happen too, where people discover more about themselves or learn about what their preferences are, but ideally you try to get ahead of as many of those things as possible. I think that’s a good little framework you just laid out there for thinking through stuff beyond just the obvious.  

Rob Walling:
Yeah, can they write code that doesn’t crash? But then to the broader point is, okay, so you have those in mind and you can evaluate, what do you do? To me, it’s in person. You have to go to as many in-person things and be involved and online, whether you are on Indie hackers, MicroConf Connect, I hesitate to say Reddit because whenever I’m on Reddit slash SaaS and r slash startups, I’m like, oh, this, I, Ooh, this is tough. Different  

Derrick Reimer:
Vibe.  

Rob Walling:
Yeah, it’s a different vibe. And there’s some paid SaaS communities and some private founder slacks and this and that, and usually you go to a MicroConf or you go to an in-person event. If you’re in London, is it indie bytes that Charlie runs? There are these local groups that you can be a part of. The ones that have gone to meetup.com and all that that are public, I’ve never found one that’s any good. It’s always the stuff that we are, it’s in our community, our Twitter SaaS community bootstrap community that I think is probably where I’d be looking. So thanks for that question, Martin. Hope it was helpful. Our next question is about when to register a trademark.  

Speaker 6:
Hey, Rob, huge fan of your podcast and books. My SaaS is doing over 10 KMRR, and I want to continue growing it and settled one day. I heard it’s important to some buyers that you’ve registered in a trademark and also just in general that you should do it. What’s your opinion? When should one worry about this and also where to register a trademark? I was thinking the eu, which is where I’m based and half my customers are located and also the US where another quarter of my customers are from, in case it’s relevant. Myas is called Web design and I convert websites to apps. Thanks in advance for your insights.  

Rob Walling:
Derek Rimer, how many trademarks have you registered in your years here? 15 years of being a SaaS founder?  

Derrick Reimer:
Yeah, myself. Zero. I was trying to remember if we did it at one point with Drip and maybe you remember.  

Rob Walling:
We applied and got rejected.  

Derrick Reimer:
Okay.  

Rob Walling:
They said they’re like, it’s too generic. That drip email is a thing that’s existed for the prior art is what they said.  

Derrick Reimer:
Yep. Yeah, so it’s not something I’ve generally given a ton of thought. Obviously not a lawyer, but I know at least in the US there is some degree of protection when you start using something as your business name, even if you haven’t formally registered it. So if someone were to blatantly try to name themselves exactly the same thing and you really wanted to take issue with it, you theoretically have some defensibility there. I think that’s just not generally something I would want to even have to do as a bootstrapper. That’s the last thing I would want to worry about. So I would be thinking about picking a name that’s unique enough where Savvy Cal, if someone starts calling themselves Savvy Cal, that’s a pretty unique combination of words. It’s unlikely to happen, and if they did, it would be something very malicious. So I think the odds of that happening are low. So yeah, I guess those are my thoughts on trademarks.  

Rob Walling:
Yeah, talk to a trademark attorney and they’ll tell you, you should file a trademark for everything you have. And I talk to most startup founders and you find that almost approximately zero of them have ever filed a trademark. I mean, within TinySeed, if I were to guess it’s 2% of companies or 5%, it’s a minuscule, minuscule number. I believe I have a trademark for MicroConf and startups For the Rest Of Us eventually. I was like, and I got those two years ago. Think about that. 

They’ve both been around for 15 years. And so again, not saying you shouldn’t do it, is that the number one thing you should be worried about right now? I don’t know, but you’re at 10 KMRR. So there’s some services that you can go to and you pay 5, 6, 700 bucks to file it, at least in the us. And if I were in your shoes, I would file in both EU and the us. If it makes you feel comfortable and you’re fine spending whatever is that $1,500 maybe total to file those two and have it, I don’t know, and maybe it takes you to half an hour or to an hour to fill out paperwork or something. You can always do it yourself or you can pay, right? But the idea is that if there’s any dispute, then having someone that you’ve paid can kind step in and help coach you of, I don’t think we’re going to get it or we will. So yeah, I guess it’s like if you were telling me you wanted to print some swag and print, I might be like, well, that’s not going to move your business forward, but you’re a 10 KMRR. Do you want print, swag and print? I find it kind of fun. And so if you want to do that, go ahead and do that. Trademarks obviously a little more practical, but I don’t feel like there’s a desperate need for most startups to trademark what they have.  

Derrick Reimer:
Yeah, I was thinking that this just came to mind and I was just thinking about this question that there’s that new email thing, it’s BIMI or bmi. I don’t know if people say BMI or what, but have you heard of this? It’s basically the thing that will allow you to show your logo and a verified badge in inbox, like in Gmail, for example, and only, well, a lot of the major clients support it. I don’t think Microsoft does right now. But anyways, you have to have a trademark to get that thing, for example, and it costs like $1,500 plus the trademark. So that would be a practical reason. That would be a reason to do it.  

Rob Walling:
Yep, I would do it. If I was going for that, I would a hundred percent pay to do that.  

Derrick Reimer:
Yeah,  

Rob Walling:
I just haven’t heard of that and I don’t know of anybody using it at this point. Right. So is it worked  

Derrick Reimer:
Out? Yeah, I think it’s still pretty obscure, but who knows? It’s expensive, so I don’t know if it’ll really become a major thing or if it’s just going to be mostly larger brands and stuff.  

Rob Walling:
Yeah, I guess the other thing to think about is I believe in Google AdWords, if someone is using your name, your company name in the ad copy, if you have a trademark, I believe you can get Google to take it down, and I don’t think you can do it if it’s not trademarked now, they can still pay to show ads on your company name. So when someone types in Savvy Google and Hits submit, I could still say looking for a better calendaring solution. And I can say calendar stuff, but I can’t. Then if you had Trademark Savvy Cal, I can’t then put Savvy Cal on that line of, so that might be another might be, again, we’re kind of reaching here, but those could be reasons to do it. 

So thanks for that question. Hope it was helpful. Last question of the day, and looks like we’re running a bit long, but let’s tackle this one. This is about churn. The question asker says, I’m working on a startup idea involving multiple products for large and small players in a vertical market. There’s a large incumbent in this space that I’ve done some research on and identified what I’ve believed to be several vulnerabilities in their business model, one of which is that they lock their customers into annual contracts. An obvious counterpoint for me is to offer monthly pricing in offering monthly pricing. Though I can imagine what I have to offer could be attractive to some smaller customers for use cases that are by their nature time limited. Though I don’t want to plan to include these customers in my marketing efforts, nor include them in my ICP. 

They may find me anyway, and it would be remiss of me to discourage or refuse these customers as a small business. These customers would necessarily drive up customer churn as they sign up to use my product for a specific situation and then cancel once their use case has concluded. My question is, should I be concerned about this kind of churn? Is there such a thing as good churn and bad churn? Should I at some point discourage such businesses say, depending on business size or use case, all churn is bad churn. But yeah, lemme just say that right off the bat, but let’s talk about this. What do you think about this?  

Derrick Reimer:
Yeah, I think it’s actually a really good question. I do too, because I remember thinking early on when you’re just fighting for survival and you’re just like, anybody pay me money for anything? I’ll take anybody. That’s sort of your natural inclination. You’re just trying to survive. And I guess it depends at an early stage, maybe you have the funnel wide open because you’re just trying to learn who am I going to be able to build for and achieve product-market fit with? And maybe it’s in the early stages, it’s unknown. Is this going to attract smaller companies? What’s it going to be and who am I going to enjoy serving the most? So you could think of it at that stage as sort of an experimental thing where you are taking in customers that fit different profiles and you’re trying to see which ones you enjoy serving the most, which ones you’re able to serve, who sticks around the longest, where’s the churn for each of these cohorts. 

And so you could think of it from that experimental point of view. I think ideally you would get to the place where you have identified who your ideal customer is. It sounds like he has sort of defined that, I don’t know with how much certainty, but has a pretty clear picture of who the ideal customer is and then is considering serving people who he knows Don doesn’t fit with where the product’s headed. And I would say, I guess in general, it kind of depends on what you’re hoping to do. If you’re hoping to build a business with healthy metrics that you might be able to sell one day, for example, then ideally you’ll have strong filters up where you’re trying to just attract and onboard people who match the vision of what you’re building for and you’ll exclude those who don’t totally fit. I think the risk is that, one, your churn metrics will look bad, and two, that it come without a cost on your whole business. 

If you have people in the product every day that are using it, but it’s not quite a great fit for them and they don’t see the new features moving in a direction that serves them, they’re going to eventually become dissatisfied. They’re going to hit up your support channels, especially if they’re lower paying. The less they pay, the more they’re going to hit up support. It’s just how it works. There’s some law out there about that, I think. And then they’re going to go write public reviews and they’re going to say, yeah, this service was not great, dah, dah, dah. So it’s just going to muddy things up if you, you’re keeping the door open for people that are not in alignment with where you’re taking the business, and you’re going to feel the weight of that too. I think if you’re trying to do your job of listening to customers and you’re just hearing this drumbeat of the smaller customers that aren’t a great fit, requesting things that you don’t plan on building and you have to keep turning ’em down and people start building cases for why you should maybe build some of this stuff and now it’s a distraction from your core business. 

I think just a lot of it can put a real strain on a company to not have clarity.  

Rob Walling:
I kind of feel like I’m in the same boat where it’s like, if I was super early, I might use this as a tactic because an Achilles heel, but I would not be betting on this in the long term because I think it makes a real crappy business to double down on this. So I think you and I are in alignment of kind of like, am I doing the short term and in the longer term I’d be looking to filter it out. The challenge of having high churn with these kind of, they’re more one-timer project based users, raising funding and exiting are both going to be severely impacted by that because the metrics look bad. So what you could do is be like, well, there are more these project-based users and they churn at this rate, and then these other people, everybody else churn at this rate, which probably means they need their own plan. 

So that started getting me thinking, could you have a pay as you go plan or a, it’s kind of a one-time use plan. So if the projects are a month long, then they can pay your annual only or they can pay for one month, but it costs like three months where it’s a quarter of the annual plan or something like that. Or if it’s two week projects, you get the idea, you make it expensive and there’s no churn. You consider it a one-time fee, and so you just funnel those people into that plan and you keep your ideal ICP of people who need to use it longer term. And I think examples of this are old SEO keyword tools or just any SEO keyword tool. It’s like an SEO agency needs an SEO keyword tool every month forever, and a small bootstrap startup needs an SEO keyword tool once and then they need it again six months later because you do a bunch of research and you forgot the keywords and you attack ’em and then you get the results, blah, blah, blah, and then you need it again six months later, and that means it’s not the best business model for SaaS, at least if you’re serving that non-ideal customer, the one-time use. 

So do you just turn them away? Yeah, longer term probably. Or do you have this other pricing tier that is more of a one-time thing pay as you go, either one. With all that said, I have seen multiple companies bootstrapped and mostly bootstrap companies do what I just said with the pricing tier, and almost all of them have eventually killed it because they’ve been like, it’s such a headache. To your point, it’s a headache because those are not best fit customers. I’m not building a one-time payment product. I’m building SaaS and I want subscriptions and as much as Derek, as much as your proponent of once.com, I just have to disagree with you. That once is great for customers maybe, but it’s in long term. I don’t even know that it is, but for us as bootstrap SaaS founders, it’s not good. So that’s where it’s like, ooh, in the near term, maybe I do this if I really thought that was my only competitive advantage, but boy, I do not want to build a business for customers like that. I don’t want to build a tool that really has a significant number of project-based customers.  

Derrick Reimer:
Yeah, I think that’s a good point. I would be deliberate about it. I think you kind of talked about how given the fact that he might offer monthly pricing instead of annual contract, it might just incidentally look attractive to smaller companies. They will be less turned off by that and it’s like you don’t want to attract them. Incidentally, you want to be deliberate about it if you’re going to do it, I think is the big takeaway.  

Rob Walling:
In a perfect world, your competitor is annual and you offer annual and monthly, but the monthly is sticky. The product is sticky enough that there are no project based folks. I mean, I think of Drip as when you and I, Chad, I often do because we offered monthly and our competitors, a lot of ’em were annual only, but Drip was super sticky. The churn was net negative, and so we didn’t have this particular issue and it allowed us to kind of outmaneuver and outcompete based on that pricing model a little bit cheaper and monthly and that was a big, big win for us, but it didn’t come at the cost of having this segment of the user base that is churning constantly. I do want to call back to what you said five minutes ago of like, it takes a toll on you. It takes a toll on the business, the support and the cues and the muddiness, and if you get a team, you start getting 5, 6, 7 people in there. 

They don’t know not to listen to those people. No matter how much you tell it. The onetime use are not our ideal best fit customers, but if that’s what’s hitting support, it’s tough and it takes a toll on you as a founder to sit there and watch that churn and to watch. Every time you think about your CAC and you’re like, I’m paid to acquire these customers, and then they come through and they turn after three minutes, it’s hard on you. You need more wins. So that’s where it’s at. I think you and I land on a kind of, it depends on this. I think in a perfect world, if you had, let’s say you had raised some funding or you were just in a spot where you didn’t need to grow and maximize revenue quickly and you could kind of be patient, take your time, I would turn ’em away. I would literally not allow, I think in the long term that’s the right decision, but the big question is it depends when you’re bootstrapping sometimes trying to get to five KA month or eight K to quit your day job, as you said, you just take whatever revenue you can get and so in that case you just deal with the headache of it.  

Derrick Reimer:
Right? Yep.  

Rob Walling:
Derek Rimer, thanks for joining me for your 21st appearance. I need to now go back and ask chat GBT if this actually, because I counted it, I paged through search results and stuff, but we’ll see if this is it.  

Derrick Reimer:
That’s awesome.  

Rob Walling:
You are Derek Reimer on X Twitter, and if folks want to see the best scheduling link on the internet, of course, that is savvy cal.com. Indeed. Thanks again for joining me,  

Derrick Reimer:
Man. Thanks for having me.  

Rob Walling:
Thanks again to Derek for spending time and joining me on today’s show and giving back to the community by answering your questions. Again, feel free to hit startups For the Rest Of Us dot com if you have a question for the show. Thanks for joining me for yet another episode of Startups. For the Rest Of Us, this is Rob Walling signing off from episode 801.  

Rob Walling:
Welcome to a very special episode of Startups For the Rest Of Us. I’m your host, Rob Walling. On this podcast, we believe that startups are not just about growth at all costs. They’re about building a business that creates and supports the life that you want to live, and that retaining control and independence, whether you raise money or not, is such a powerful way to stay in line with your values. You can build an incredible life-changing business, hopefully without burning out and without moving to a major startup hub or begging venture capitalists for money. Since this show started more than 15 years ago, it’s been about helping founders like you build sustainable, profitable, sane companies. And the mission of this show plus my books plus MicroConf TinySeed and everything else that I do is to multiply the world’s population of independent self-sustaining startups. I mentioned at the top that this is a special episode and I’m going to keep that as a spoiler. 

If you stick around to the end, I’ll let you know why I feel that In this episode, I’m going to dive into the 12 Commandments of Startups For the Rest Of Us. Before I do that, I want to let you know that early bird tickets from MicroConf US 2026 are on sale. The event is in Portland, Oregon, April 12th through the 14th. Right now, ticket prices are as low as they ever will be, and we have sold out our last three or four events. Ticket prices will go up on October 22nd or when the first a hundred tickets have sold. If you’re planning to come, should get your ticket. MicroConf dot com slash us use promo code Rob 50 for $50 off. 

So let’s talk about the 12 commandments of startups For the Rest Of Us. I originally started thinking about is there a list of rules of thumb rules, ideas, thoughts that folks can take away as they bootstrap or mostly bootstrap their companies? I considered calling them the X Commandments of bootstrapping or the X Commandments of SaaS, but none of that really captured it because bootstrapping can be building a great little lifestyle business or it can mean being an ambitious founder trying to get to seven figures and to talk about SaaS is too broad because isn’t there venture-backed SaaS and there’s HubSpot and then there’s an Indie Hacker project doing five grand a month. So I noodled on this for a while and I realized, you know what, these X Commandments and I didn’t know how many there would be when I started, are really more of a distillation of things that I’ve said on this podcast, certainly over the past six or seven years since I’ve been solo on it. 

But even before then, you can hear the belief behind why we do the show. And so today I want to go through these 12 ideas, these thoughts, these rules of thumb, these commandments as I’m calling them. And I think over time I will wind up adding to this. This is not a complete list. Even as I created this list for this episode, I thought to myself, what am I leaving out? And I know there are a few things that are certainly being left out. Also, I don’t think anyone wants to listen to a 60 minute episode of me running through these. So without further ado, let’s dive in to my first of 12 commandments. Number one is nuance beats absolutes. And the idea behind each of these is it’s either a way to improve your thinking as a founder or to measure how you think or its advice to help you increase your chance of success as you build that bootstrapped or mostly bootstrapped startup. 

So again, number one is nuance beats absolutes. There’s a temptation online, especially in founder circles, and frankly, there’s a temptation in politics, certainly in the US and I think in most of the world right now, to think in these extremes, to think in absolutes, to use words like always do this, never do that. Venture capital is always bad. Bootstrapping is always the best or the worst. Marketing doesn’t work. Marketing is tricking people. You should never do marketing, you should always do marketing. But in reality, the truth is more complicated. It’s much more helpful to think in nuance than in extremes. It is very, very rare that an answer is extremely black and white. And I say this as someone who is a left brain software engineer who got two engineering degrees, and when I came into the startup game, I wanted to really believe that there were absolute truths that I had to adhere to or if I adhered to these truths and if I followed these steps and these blueprints that people were trying to sell me, that I would have success with an online business. 

But in fact, the truth is more complicated and there are rules of thumb. You hear me say them on this podcast, you hear me jokingly say, don’t do B2C. Now, do I really mean that there are zero B2C companies that have ever survived or that you should never, ever, ever do them? No. What I mean is you are decreasing your chance of success by bootstrapping B2C, a two-sided marketplace, et cetera, et cetera. Well, we’re going to touch on some of my don’ts a little later. So on this podcast, I’m pretty careful not to say always and never, but to often say, eh, 95% of the time, 95 times out of 198 times out of a hundred, I think this is a good rule of thumb and look, this same goes for pricing strategies and feature decisions and hiring. Learning to think with nuance and seeing spectrums instead of binaries can make you a better founder and honestly, a better human. 

The real world is actually shades of gray and the startup space and bootstrapping is no different. So the next time you hear someone say, oh, you should never take funding because it’s just not true, and I’ve disproven that with TinySeed that the funding is actually founder friendly and every founder you hear talk about TinySeed says, wow, funding. It’s not evil. Who would’ve thought even though there has been a narrative with Bootstrappers that I mean really in 20, was it 17? I think it was 2017, maybe 2018 when I started talking about funding and how fund strapping at the time was becoming a thing. I got real pushback at MicroConf of people saying, oh, no funding, it’s bad, it’s bad, and I didn’t believe it then, right? My book Start small, stay small in 2010 has a paragraph that’s like I’m not anti venture capital. I think it’s a great tool. 

It’s like a shovel. You’ve heard me use this an analogy. If you needed dig a whole, then use it, and if you don’t, then don’t. But I’ve just always been against the narrative that funding of any kind is the only way to accomplish these things. Anytime you hear someone talk about product-market fit as I’ve hid it or I haven’t, or do you have it? It’s helpful to think of it with nuance to think of it as a spectrum instead of a binary commandment. Number two is learn how to make hard decisions with incomplete information. You’ve heard this one before. If you’re a long time listener, I couldn’t have a list of advice without touching on a few of the classics. I promise not all of them will be things you’ve heard me say over and over, but the idea behind this thought is that things will never be as clear as you want them to be. 

You’ll almost never have 100% of the data you wish you had. In fact, this is maybe what I’ll say, never. I don’t think I’ve ever had a hundred percent of the data I wish I had when I’m making a decision as a founder in an early stage startup, if you work for a Fortune 500 company and you have a million customers and you can survey them and get statistically significant opinions, maybe you’ll have a hundred percent that I don’t know. I’ve never been in that situation. And founders who wait for certainty wind up paralyzed while your competitors ship. The competitors who are making hard decisions within complete information and moving quickly will outpace you. So being able to make hard calls in the face of incomplete or messy information or mixed signals is a core founder skill that you need to embody for those nerds listening. 

You can think of it like bey and updates. You gather what you can, you make the best decision possible, then you course correct as you learn more because progress beats perfection every time. Learn how to make hard decisions with incomplete information. It is a skill that you will have to practice. You’ll have to hone your founder gut. I talk about how to do this in the mindset chapter at the end of the SaaS playbook, but the high level is be around founders who generally make good decisions, see how they think about them, get their advice. This can be in a mastermind or an advisor or an investor or a co-founder. I have run into people over the years that just made better decisions than I did, and I didn’t understand why founders specifically and I observed them. A lot of these folks I’ve had on this podcast, and when you hear their thought process, it’s enlightening and you can start to learn how they think, not just about the end result, not just the decisions they make, but what goes on in their head. 

And that’s part of why I interview founders, successful founders on this show is so you can hear that that’s partly why I come up with frameworks or I talk about my own internal thought processes so that you can potentially learn from someone who may be a bit ahead of you. The third commandment is to avoid the classic traps. These are the classic mistakes I’ve laid out on this podcast and I’ve put eight of them under this one bullet point. I cheated just a little bit, but if you recall, I had an episode that was seven things you should never Do. It was spurred on by a question from Dan Andrews of the tropical MBA podcast, and then a couple episodes later I added an eighth, and when I say never, you know what I mean? You can break the rules, but it’s learn the rules and get good enough at them that you learn when and how you should break them. 

So very quickly, what are my eight classic mistakes? I’ll probably add to these over time too, but the total number of these have stayed at eight since I recorded those episodes a year or two ago. Number one is don’t bootstrap a two-sided marketplace unless you already have one. Side number two is don’t start a B2C app when you are leaning towards bootstrapping or mostly bootstrapping SaaS. Number three is don’t build a second product just because the first one stopped growing and that one has a bit more nuance. Ruben and I recorded an entire episode about, well, there are exceptions, and there are some TinySeed companies that have convinced me that they should in fact build a second product. So is this correct? 95% of the time? Yeah, probably, but there are some exceptions as with all of these things. Number four is don’t try to define a new category of software from scratch. 

And you just heard an example of someone who did this, Colin from status skater was on just a few episodes ago and they have succeeded at it, but if you listen to him, he says, don’t do it. It was very, very hard and it took them like 11 years to get to the success that they potentially could have achieved much earlier on. The same thing holds with bootstrapping two set of marketplaces. Don’t start a B2C app. Every time I talk about these on X Twitter, on YouTube, on this podcast, a few people comment and say, well, that’s all I know. And then a bunch of people say, yeah, tried it. It was like eating glass. That was actually a quote from someone who’s like, I successfully did this, and I said, oh, was it easy? Would you do it again? And the response was, it was like eating glass. 

So what does that tell you about this list? Without knowing the rules and knowing when you should break them, probably a good idea to think about staying within the lines for now. Number five is don’t translate your app into multiple languages too early. Usually it’s, oh, I’ve stopped growing, so I’m going to translate to Spanish, German, and French, and that’s usually not the reason that you stop growing. Number six is don’t stop at surface level fixes. Dig deeper into root causes. Don’t just say, oh, my churn is high, therefore I’m going to use some churn reduction tactics. Usually the deeper root causes that you haven’t built something people want and churn reduction tactics are just going to mask that. And again, I spent a full episode talking about these in episode 6 85 came out Halloween of 2023 if you want to hear the full discussion. 

Number seven is don’t use a portfolio launch strategy, meaning spraying multiple products at once to see what sticks. Number eight is, don’t take outside funding and then start a bunch of side projects. So this was one commandment with eight traps and my hope is that you’re avoiding these and saving yourself months or years of wasted energy commandment Number four is don’t build without evidence. I phrased this very carefully. I could say never build without validating, but I find that this term validating, he puts in air quotes, makes people think that there is a way to get to 100% confidence that you’ve validated that this idea will be successful and that’s not the case. What validation is, or in this case evidence because I said don’t build without evidence. It’s evidence that says if you build this, it might be something people want and it points you in the direction of solving a problem that people slash businesses are willing to pay for. 

Evidence does not mean you have iron clad proof, but it’s better than nothing. So evidence includes things like customer conversations. It includes things like putting a landing page up and seeing how many emails you can acquire and then talking to those folks. It might include pre-selling, it might not. Folks who say validation don’t work and then spend two or three months nights and weekends or frankly full-time and then launch something to crickets and then post on Reddit, hacker News X Twitter and say, oh, I build something. How do I market it catastrophic and it pains me to see this over and over and over. There’s a reason that I came up with the 2 2200 framework you’ve heard me talk about. It’s exactly for this bullet. It’s two hours of research. Then if you make it past that point, you have some evidence that there’s some demand. 

Then you do 20 hours of a smoke test customer conversations and you let it, is there good evidence? Is there evidence for or against it? And then the 200 hours is building an MVP, whether that’s with no code with AI help or you’re just coding something. Or even with human automation, you have a VA on the backend who is doing the actual work instead of the code. That’s the point of that framework and whether you follow any framework I come up with or someone else’s framework, don’t build without evidence. The successful serial entrepreneurs that I see succeeding over and over, they usually start with a gut feel and then they gather evidence through conversations, landing pages, et cetera, et cetera. You saw Jason Cohen do this with WP Engine. You saw Ruben Gomez do this with Sewell. You saw Derek Reimer doing it with SAVI Cal, you saw me do it with Drip. 

You saw on and on and on probably every TinySeed or frankly every founder that I’ve interviewed on startups For the Rest Of Us, almost without exception either at a minimum had the themselves and I would say, if you have the problem yourself, your customer is zero. Now go out and find out, does anyone else have this problem and is anyone else willing to pay for it? Those are the questions you’re trying to answer, and most of the folks who come on the show did something upfront, not all, but most of them gathered some evidence instead of just purely going on a gut feel, spraying and praying Commandment number five is that marketing beats product. I know it’s a tough sell to talk to a bunch of builders and let them know that your skillset is actually less important in entrepreneurial success than learning how to market and sell. 

This was a very hard pill for me to swallow as a software developer, say 20 years ago, 22 years ago, trying to get out of my day job launching side projects because I’d spent so much time developing this skill writing code since I was eight years old. I thought that was the hard part, but it feels like no matter how many times I say this or any other successful founder says it about, Hey, distribution is more important than the code, right? Marketing and selling is more important than what you build. It seems like there’s always going to be developers posting on social media, okay, I built it now do I market it? Or worse yet, I’m a non-technical founder and I paid an agency $30,000 to build this. Now how do I market it? And that’s really tough. We’ve all seen really shitty products that are making millions, tens of millions, hundreds of millions of dollars. 

When people say, wow, man, have you seen Salesforce? It’s such a catastrophe, man. HubSpot is so tough to use. It’s so complicated. So you’re kind of saying it’s not a great product, right? Maybe it does a lot, but it’s not well architected or the UX or whatever it is that you’re saying in that sentence, and yet it’s a successful product. And why is that? They marketed really well. They sold really well. One could also say they were early. I mean depending on Salesforce or whatever, but even these days, new products that come out of the gate and succeed quickly usually have someone who really knows how to market and sell behind. It is extremely, extremely rare and extremely, extremely lucky for someone to build a legit like seven or eight figure business without marketing or sales acumen. Beyond that, there’s this old quote and I always misattribute it, but it’s from an advertising, one of the Mad Men advertising execs in the fifties and sixties. 

It might be Eugene Schwartz, it might be David Ogilvy, but the quote is, good marketing will make a bad product fail faster. And in terms of SaaS, obviously we see bad products that are actually poorly designed, but I mean more that a bad product is probably something that no one wants. You have a solution to a problem that no one really cares about, and even if you then have good marketing, it’s still not going to save that. I saw that in the early days of Drip. We actually did have a good product. It was very well constructed and a decent marketing acumen, but even those two things, if you don’t find product-market fit, that’s what those words mean, right? Is that you have built something that businesses want and are willing to pay for. If you don’t have it, then even being a good builder and a good marketer, you can then still fail. 

And so that’s why SaaS is so tough is that you need to learn to market and sell and you should know how to build or frankly be able to co-found or hire someone to do these things with. I won’t go into how hard it is to hire folks to write good code and market, but it is definitely a balance and a challenge. Bottom line is if you don’t know how to market beyond social media tweeting about your launch and putting it on product hunt, you’re damn near doomed. You’re going to wind up selling to people who want to follow your entrepreneurial journey. So it’s like other aspiring entrepreneurs who tend to be super price sensitive, high churn, just want to check out new tools, not an ideal customer base to build any type of sustainable business around. To summarize this one, there are just about 20 B2B SaaS marketing approaches. 

I’ve listed ’em in the SaaS playbook, understanding which ones fit, which business models, how to prioritize them, learning how to execute on one of them, two of them, three of them, and then building business that use those skills. It’s an incredible advantage that will pay dividends for years if not decades, on your founder journey. Marketing beats product, learn how to do it commandment number six is to have fewer customers, better customers. There is a myth with venture capital if you’re listening to venture capitalists who want to scale to hundreds of millions or billions in revenue, but there’s also a myth among, I don’t know, it’s the B2C founders who want to charge five bucks, 10 bucks, 20 bucks a month. There’s a myth that you need massive scale to succeed, but the math on SaaS doesn’t really support that. You want to be thinking about building a product that is high priced enough, and this is if you’re doing a step three business, well, you know this third step approach, step one, businesses that only need to scale to two grand, five grand, 10 grand a month. 

Obviously you can be lower priced, but if you really want to build a seven or eight figure SaaS company with net negative churn, you want to think about having higher pricing and you want to think about having a few hundred high value happy customers that you can build into a multimillion dollar business. 10,000 customers sounds sexy, but it is a nightmare for support. It is a nightmare if you don’t have the process or the resources to be ready for it. More customers means more support, it means more churn, and it usually means more stress. I want to be careful here, and I’m not saying you can only build a successful business by charging a hundred, 200, $300 a month and up. That’s just not true even with SaaS, even with bootstrapping, but the idea here is try to think about how to solve a pain point that will keep people sticking around that can potentially lower your customer count rather than increase it and then focus on those customers, your ideal customer profile. 

These are the right customers, rather than just going for volume and getting caught up in that idea of how can I serve as many customers as possible? Of course you always want to do that, but also how can I choose customers who are going to really need and really love this product? And the problem it solves? Commandment number seven is to respect the platform, but fear the platform. Platform risk is tough and you shouldn’t necessarily avoid it. Whole hog, there are I think seven or eight levels of platform risk that I defined on this very show episode 735. So it’s not as if sending email through SendGrid or hosting on AWS is the same amount of platform risk as having a Shopify app where all of your new customers come from Shopify, all of your existing customers are on Shopify, and they can kick you out of the app store or just decide to charge you a 50% cut of your revenue off the top because they decide to. 

Those are different levels of platform risk. So respect the platform. Fear the platform involves educating yourself on which levels of platform risk you have. Do you have customer concentration risk? Do you have new incoming customer risks? Do you have the ability to be shut down? Is that your risk? What’s the switching cost? Is there kind of an equivalent that you could switch to? These are all things that you want to understand about platform risk, and again, I don’t say avoid platform risk. It’s very, very difficult if not almost impossible to totally avoid platform risk. And again, you’ll hear it in that episode 7 35 where I’m talking about hosting your own web server in your closet and your own email server and maintaining all that. That’s the way to avoid platform risk. And even then, aren’t you reliant on your home internet service? You kind of are. 

So the idea here is know what you’re getting into. Much like someone who says, I will never raise funding. Know what you’re getting into. Much like someone who says, I don’t want to work more than 20 hours a week. I never want to hire employees. I don’t want to do marketing or sales. Just know what you’re getting into by saying those things. Know that you are potentially and almost inevitably limiting growth or with platform risk that you are taking on some risk. That’s okay. We are nuanced thinkers on this podcast, so we can say, oh, it is okay to have some platform risk and to realize that if I have all my code on an EC2 instance with Amazon and I have written and maintained all that code, that there is of course some Amazon platform risk, but that risk is not equivalent to if I have built an app in no code on Bubble or Airtable, and this is where having a nuanced view can help you know what you’re getting into. 

When I talk about stair stepping, I don’t mind even heavy levels of platform risk with step one and step two businesses because I know that those are a little more squishy and maybe even a little more disposable because these are not designed to be seven or eight figure companies. They’re designed to be great little lifestyle businesses that can do two grand, five grand, 10, 20 grand a month, and so I’m willing to take a little more risk with them in order to get the upside because there are advantages to being on a platform, but whatever you do with the platform, learn the risks, respect the platform, fear the platform commandment number eight should sound familiar. Build your network, not your audience. An audience gives you reach, but a network gives you leverage so your audience might retweet you, whereas your network might introduce you to your first 10 customers or help you find your first hire, or if you decide to go down this route, you’re first investor, the relationships that you build in your network will outlast any audience, any social platform, your email list algorithm changes. 

There are folks out there who say, if you want to start a SaaS, just build an audience on social media, and that is some of the worst advice that I hear in our space. Don’t get me wrong, an audience is helpful. It really is, but it’s not worth the time that it takes to build it, not for SaaS. If you want to sell info products, if you want to sell courses, if you want to sell memberships, if you want to sell consulting, I do think an audience is extremely helpful, but with SaaS, folks want to use a tool and even with an audience, as Jason Cohen said of, I forget what he’s 20 or 30,000 email subscribers or our SaaS subscribers, he got two customers when he announced WP Engine to his audience, even with my audience of 20 or 30,000 at the time when we launched Drip, we got up to seven or 8,000 MRR and then plateaued hard with high churn and look, seven or 8,000 was good, but that’s as far as your audience takes. 

Nathan Barry saw this when he launched ConvertKit and he got ConvertKit up to about, I think it was like $1,500 of MRR and just couldn’t get past it with the audience. The way that all of us got past it was iterating, focusing, finding product-market fit, and then using our network of people that we have met at events online and that we have built relationships with two wave relationships, not an audience, not, Hey, here’s a tweet by this thing, but can I text you? Can I Slack you? Can I drop you an email and say, Hey, would you be willing to have me on your podcast? Would you be willing to promote me on your social account? Would you be willing to be a customer to switch away from your current provider to use my tool? Would you be willing to vouch for me and refer this tool to other people? 

I’ve done entire episodes on this show and on YouTube of how to build your network. Then that’s the next question. Well, how do I build a network? And I’ve gone through all that. I’m not going to go through it here. If you’re going to build SaaS, build your network, not your audience. Commandment number nine is that overnight success takes a decade. So back in episode 700 of this show talked about playing long ball and playing long ball can work. Most of the overnight successes you see in tech or in our communities, the founders who’ve been grinding and learning and focusing and failing for years and years, often a decade or more, the compounding effect of small wins, and whether that’s MRR growth over time, whether it’s skills that you learn marketing and selling or the credibility you earn, the network you build, these can help you eventually break through. 

They build momentum. If you’re looking for success in six months, you’re probably going to quit. If you give yourself a few years, maybe five, maybe 10, the odds are more in your favor. Folks have asked me how long from the day you launched Drip did it take until you sold it, and it’s two and a half years, so it’s very quick and people often say, wow, overnight success, right? Well, it was three and a half from the time we started building it, and it was six and a half from the time that we started this podcast and started building my network, building my audience. It was five and a half or six and a half since we started MicroConf that helped me build my network and audience. It was 11 years from the time that I made my first revenue online from products with Do net invoice, and it was 13, 14 years from the time that I launched my first websites and online product ideas where I was trying to make things work, and I guess technically I did make a few dollars here and there a hundred dollars a month or something back then, but the idea is that the story sounds like a Cinderella story, like two and a half years. 

That’s all you did. No, it was depending on how you count six and a half or 11 years or 13 or 14. If you give yourself a few months, you’re going to be disappointed. Don’t believe folks who are telling you that you can do this in months, but that doesn’t mean it’s not worth doing Overnight. Success often takes a decade. Commandment number 10 of 12 is to stack small wins. If you try to launch a large complicated SaaS app into a competitive space on day one, when you are a new and aspiring founder, the odds are that you are going to fail. You don’t have the experience, you don’t have the skills, you don’t have the cash, you don’t have the confidence, you don’t have the credibility, you don’t have the network and you probably don’t have the support of, I dunno, if you have a significant other or a spouse launching something small and getting some kind of traction and some wins along the way. 

They build momentum, they build experience, they build confidence, they build some revenue, they build some credibility, a network, they build confidence from your spouse. All of that carries into your next effort and your next effort, and you might recognize this entire premise of small wins as being the basis of the stair step method of entrepreneurship. I’m not saying that the only way to become an entrepreneur is stair step, and I’m not saying the stair step is the only or the best way to stack small wins. Stack small wins to me is this umbrella concept of make a bet, follow it through, try to get some experience and some revenue under your belt. Take that as far as it can go, and then build on that, and maybe that means you acquire another small thing or maybe that means you then start a bigger effort. The idea that building momentum is so important as an entrepreneur, and it’s not just momentum in the early days. 

It’s all the things I’ve said. Experience, confidence, revenue, credibility, network, and it’s really hard to do that when you bite off something that takes you 12 months to build and launch and you just run out of motivation. I’ve often said that funded startups fail when they run out of money and bootstraps. Startups fail when the founder runs out of motivation, and motivation is so driven by momentum, and momentum is so driven by small wins along the way. And look, I can take this and apply it to building a step three business building a full blown SaaS application. Imagine you launch it and you get to V one, you get a small win, but then you need to learn, you need to iterate, you need to fight those headwinds, and you launch more and more and more features and then you get to V two. That’s a small win. 

You celebrate that you’ve gained some experience, some skills, some confidence, hopefully some revenue, and then you keep doing and you iterate and each step compounds into the next, whether you’re doing separate little apps like the stair step method, whether you’re doing a larger effort, like a full-blown SaaS app. Commandment number 11 is the one I’ve talked about on the show before. Be careful who you listen to. I went off on an entire episode rant here just two, three episodes ago, so I won’t belabor this one, but the idea is that there are so many folks online who are good at building audiences and good at selling courses and good at selling a dream to folks who follow them, but they are really vague about how to do it, and they frankly are pretty vague about what they’ve actually accomplished, and these folks have strong opinions about what it takes to be successful, but have often never had a real success themselves. 

Or maybe they had one that was a small success and hello, I’m an exited founder when they sold something for a few hundred thousand dollars and it’s just different or they’ve done it once and they got lucky and they really don’t know how to do it again. So now they’re selling courses because that’s easier. There are definitely knowledgeable founders out there, many of whom you’ll hear on this show or on the MicroConf stage because we carefully curate those voices. We want people with actual experience, a proven track record and the judgment that comes with it, the good solid founder gut that comes with that, so you’ll always hear me throw out names like Jason Cohen, Ruben Gomez, heat and Shah. I mean the list is pretty long in terms of founders that are knowledgeable and that have accomplished things. The challenge is a lot of those folks aren’t building audiences, and so you do have to find them on podcasts like this one or others. 

The danger is if someone is telling you that all you have to do is eat ice cream to lose weight, you should be skeptical. Be skeptical of that message. Be skeptical of the source and dig in a little further and ask, what has this person actually done? The people who tell you only what you want to hear are usually doing it because they want to sell you something, and that’s the easiest way to do it. It’s not because they want to help you succeed. The 12th and final commandment is the most difficult battles will be in your own head. The biggest threat to your company isn’t going to be competition. It’s going to be you. The potential for burnout, self-doubt, loss of motivation, destroying your relationships, mental health, these things kill more companies I think, than any external force. Again, this comes back to the bootstrapped companies go out of business when the founder runs out of motivation, and it’s easy to do that because it’s such a long journey. 

Protecting your headspace is as critical as any other element of your business. And look, my wife, Dr. Sherry Walling, and I wrote an entire book on this called The Entrepreneur’s Guide to Keeping Your Together. We talk about it at MicroConf. I’ve had Dr. Sherry on this podcast. It’s things like sleep and mental health and boundaries. These are not luxuries. How often do we see a founder come on Twitter and just say, I’m completely burned out. How many tragic founder suicides have we seen in the venture capital community? It’s easy to go into this journey and think I’ll be able to figure it out, and you might, but don’t underestimate how hard the journey’s going to be. Not to mention if you ever go to sell your company. We wrote a whole book about the psychology of that as well called exit strategy, really learning how to manage your own psychology and not be completely decimated by people’s opinions of you, what they say about you online and to not link your mental health to your MRR growth. 

It’s a real skillset, and it’s one that I personally wished I had learned sooner. Almost every founder I’ve talked with in our spaces, every founder I’ve interviewed has talked about having some type of major challenge or obstacle over the years, and for some people it’s something like depression, and for some folks it’s maybe always being overly cautious and some folks it’s high anxiety and stress and that they’re naturally just in a stress day. Some folks, they work too hard and they burn out. They have self-doubt, they have imposter syndrome. There’s all this stuff that can hit you, and knowing as you’re going into this that one of the most difficult battles will be in your head I think can be really helpful. I said at the top of this episode that it’s a special one. If you hadn’t guessed by now, it’s episode 800 and throughout these 800 episodes of this show, no matter the format, the core message hasn’t changed. 

You don’t have to chase vanity metrics. You don’t have to build the next unicorn to win. You can build a company that gives you freedom, purpose, and healthy relationships and a life that you don’t want to escape from. These commandments I’ve given in this episode are not about rules being carved in stone. There are lessons forged from being in the trenches myself, as well as talking to thousands and thousands of founders around the world through this podcast, my books, my blog, MicroConf TinySeed, and on and on, and I think of these as reminders of what actually matters when the work gets hard. However you apply them, I hope they help you keep building on your own terms. Thanks for listening. Whether it’s been for eight or 800 episodes, I show up every week, 52 weeks a year because you listen and because you write ’em with questions and you tell me that the advice and the stories and the strategies and the inspiration that come out of this show matter to you, and that they help you build a better life. And if I can continue to multiply the world’s population of independent self-sustaining startups, one episode at a time, and one founder at a time, I’m living my best life. This is Rob Walling signing off from episode 800.  

Rob Walling:
It’s the sixth and final episode of TinySeed Tales season five, where we’ve followed Harris Kenny’s journey as he’s had incredible results growing outbound sink. If you’re interested in investing in founders like Harris and diversifying your portfolio away from public markets or wherever you might have that money parked, you can join TinySeed Fund three to invest in early stage bootstrapped B2B SaaS companies. To learn more about our thesis, you can add to TinySeed dot com slash invest, and if you fill out the form on that page, it goes directly to a r, my co-founders inbox. If you want to keep up with everything we’re doing at TinySeed, head to TinySeed dot com and drop your email in the footer. I promise we will not spam you. We only send occasional updates about what’s going on in the world of ambitious, mostly bootstrap founders. Let’s dive into this sixth and final episode of this season.  

Harris Kenny:
There’s a light at the end of the tunnel, which I haven’t felt for a long time. If anything, it felt like the light was getting dimmer. I was on a little train thing, but the train was on a hill and it was rolling backwards, so now I found the hand crank and I’m like kind of cranking towards the light.  

Rob Walling:
Welcome back to TinySeed Tails. This is the final episode of season five, and we’re following Harris Kenney’s journey from agency owner to SaaS founder. When we started this series, Harris was juggling his agency while building outbound sync. Over five episodes, we’ve watched him go all in, navigate the ups and downs of early growth, achieve profitability, and faced the tough decisions that come with success. In our last episode, he was about to take off on a vacation where he was planning to mull over the decision on whether or not he should raise an additional round, so I wanted to check up on him to see how it went. So Harris, it’s been about 12 weeks since we last chatted. Bring us up to speed on where the business is at and whether you took a really nice vacation over the summer or whether you’ve been hitting the gas.  

Harris Kenny:
So yes, took a nice vacation but was not restful vacation in terms of we traveled to Europe with two children under five, did a lot more intense hiking. I liked to hike and I loved being in the mountains, but I don’t think I was fully prepared for the physical amount of effort that was going to go on that trip. So it wasn’t restful, but it was time away and I was able to take the closest to a vacation that I’ve been able to take since I started working myself in 2019. So that was cool. Feeling the difference of having a SaaS company versus having a consultancy or an agency. I just worked 30 minutes or something like that, a day. I used it to kickstart some things, but the good news is that the business is going. And then I’ve also made some personal health changes as well since then. 

So we passed that 500 KARR. We’re actually well past that now at the time that we’re talking right now. So we kind of blew through that pretty quickly, so we hit that big number. And then personally, I’ve also made a huge change for my own health. So I used the trip and the time zone adjustment to, I started exercising early in the mornings, so I’ve been getting up at like four 30 is my alarm time, which is early and it’s required me to go to bed earlier. And I’m not saying everybody should do this, but for me, I’ve been doing that. And so I’ve worked out, this is like 81 days in a row now, no days off now. I will do more relaxed days sometimes, or sometimes I will. I hit snooze a couple of times, but every day I get up and then I’m trying to just eat better. I have really sick kind of simple rules because in the past I’ve yo-yo a little bit over the last years of this journey and I simplified it a lot and I’m not measuring tons of things. I’m not going sort of over the top of it. And anyway, that’s going really, really well. So I’ve lost quite a bit of weight and I’m just a feeling much, much better. So anyway, a lot has changed in the last few months, but it’s more of the same just sinking data, working with agencies and growing the thing.  

Rob Walling:
Well, and more of the same. Is growth really been the theme for this season of TinySeed Tails is that you have grown the out of this business man, and it’s like, Hey, I am super happy for you. In terms of the physical health, I know that’s something you had brought up earlier in this season, having concerns about it and it’s hard balance to do that and requires a lot of discipline to give that some time when you have a spouse and two young kids and a startup that kind of takes a lot of your attention. And B, I’m stoked over the moon for you to have passed 500 KARR. I mean, it’s obviously pretty incredible growth from where we started. How does it feel to you looking back and how does it feel to you today to think? I bet two, three years ago you thought, man, if someday I could ever have a SaaS that did 20 KA month, 30 KA month, you have these numbers in your head and I’m wondering if you’re past all those numbers that you dreamed about at one point.  

Harris Kenny:
Honestly, it feels really good. I mean, I’m really proud of the company right now. I think I got a few big things and have worked really hard and I’ve gotten a little lucky too. But it feels great when I think about our customers and when I think about our agency partners, I really feel like we are building something together and people are changing how they work. And my company and app on sync is part of that. And so it’s cool to be on the winning side of that. I spent years helping other people grow their companies trying to running campaigns, doing these other things, and I think that the thing that I’ve realized the most that it was those big directional things that I got right early, explain a lot of the growth here. I’m not spending time optimizing a landing page. I’m not sweating over the pricing this or that. 

I’m not chasing down if there’s a missed payment, I’m not going and chasing that payment back. I’ll just kind of let a lot of little things slide that I think in the past I’ve thought about, or even when I was working with clients trying to help them like, Hey, okay, well, let’s optimize a little bit here or there. So yeah, it feels good, and I think it’s because of a few big things and a few working hard and a few lucky breaks and stuff like that that it’s kind of come together. But I mean, this is totally my best of all possible worlds, but this is kind of where I think I could have hoped to have landed and where we’re going next, this next chapter, I think I actually think we are going to potentially start growing faster soon because of some of the stuff we’re working on. So yeah, I’m really grateful for where we are today for sure.  

Rob Walling:
As part of that growth, Harris was eyeing conferences as his next marketing channel, but he wasn’t interested in boring hotel, happy hours. He wanted to do something that would get the entire industry talking.  

Harris Kenny:
I’ve been trying to let myself have fun a little bit because everything is very stodgy and everyone takes themselves very seriously, especially in this enterprise sales go to market space. And so I’ve just been kind of posting funny, or at least what I think is funny stuff on LinkedIn, and we had this decision of what do we do with events? Travel is really tough because my family stuff at this point, it’s really tough to leave the house for multiple days at a time, let alone multiple trips a year. And our budget and the company’s budget’s tight. So I was like, I’m going to pick one event this fall, and in sales tech B2B SaaS, it’s like September, October, that’s kind of event season. And in the past I’d gone to Inbound, which is Hotspot’s big conference. I thought about going to Dreamforce, which is obviously Salesforce’s big conference, but Clay, there was a wind of clay having an event. 

And so I started planning months in advance that we were going to do something around Clay’s event, and I was talking with our agency buddies and anyway, kind of landed on this idea of doing laser tag. And people were like, oh my God, that’s awesome. That’s awesome. Is the word that kept coming up, or if you did that, I would totally go. And I was like, oh, okay. So if we really focus on this ICP, and if we focus on we help winners win and we can do things differently. We don’t have to follow the same rules as everybody else. We don’t have to actually do a boring happy hour at a hotel restaurant next to the venue, which is fine that people do that, whatever, but we don’t have to do that. And so I said, let’s do it. So I talked to a few of our partners and I said, listen, we’re doing laser tag, it’s going to be awesome. 

I’m covering the venue and this is a flat fee that we’re going to charge per sponsor. We need buses. And I got two companies to sign up for buses for charter buses, and then Word got out and then another company signed up for lunch. And so then I was like, okay, we’ve got a venue 5,000 square foot venue outside of San Francisco. We’ve got two buses, we’ve got lunch covered. Now I need to start getting some of our top people excited. And so they were like, okay, we’re in. We’re coming. I’ll be. So then I used them to get other people into it. And anyway, it sort of snowballed. Now we’ve got, I think probably 90 people RSVP’d to come to a laser tag venue the day before Clay’s event. More and more sponsors kept kind of wanting to get involved. So we’re going to have a 360 degree photo booth, we’re going to have a professional photographer, videographer, we’re going to have trophies. 

I mean, it has gotten totally out of control. It has made me so much appreciate Sonia at MicroConf and what she does. It has been so much work, but I’ve been happy to do it because everybody is so excited about it. And it’s a very elite group. It’s invite only, we haven’t posted it publicly. Anybody can’t just sign up. And so it’s kind of an if you know thing, and it feels like it’s really consistent with the product we’re trying to build. It’s for experts, it’s for people who know what they’re doing. And this is an event where you can be with other people like that and just having such a blast with it and it’s going to be kind of a hot ticket event. So yeah, I’m jazzed about laser tag. Hopefully nobody tears their ACL or something like that, but I think it’s going to be great. 

And I helped a few people get visas approved. So we’re going to have people coming from the Philippines, from Macedonia, I mean literally from all over the world are coming for the clay event and also for laser tag. So that’s been all in progress the last few months, but when I decided to commit to the strategy of focus on where things are working, this makes more sense than saying, oh, well now I’m going to make a new landing page and try to convert an extra one person a month or whatever. It just, well, I could be doing that or I could be doing this. And so leaning into the parts of the business that are working are allowing me to have way more fun. So I’m in this stage of the business now where I’m starting to have more fun and kind of do silly things, and that’s a huge emotional relief. It’s been pretty heavy at times, to be honest. Yeah, it’s felt like a labor of love. Definitely.  

Rob Walling:
Yeah. Yeah. Well, I mean, you’ve talked about how financially it has been stressful, and I appreciate that you are taking this time to allow yourself to celebrate it in a way. The laser tech feels to me, it’s just something I have the luxury to do right now. And someone might question whether it’s the optimal business move, as you said, I think it’s a great move for your space and for getting your name out there and for all the reasons, especially since you’re doing enterprise and relational sales. If you were product-led growth and it was like we drive traffic with SEO and then we convert it on the website, it still might be okay, but harder to justify. But I think this is going to reap huge rewards for you, and you get to have fun. It’s designing at a certain point, designing swag. Someone people would rag on whoever Malechi or something. 

It’s like, man, they have a lot of T-shirts. And man, they have those hat, those knit hats, and man, they have a lot of swag, and you know what they earned. Ben Chestnut earned the luxury of being able to do whatever the hell he wanted and that was what he wanted to do. And so in a way, while you’re not at MailChimp level yet, you are at a place where you can take a breath and do maybe a little bit more of what you want and a little less of the grind. And there’s still grind, there’s still grind ahead, but you’re not hand to mouth eight KMRR burning money every month anymore. And so this is a really neat way to be able to celebrate that in a way that fits you. It kind of fits your brand. And in a way, outbound sync is going to reflect who you are as a founder, and all companies should not have the same feel to them. And you get to decide that for yourself.  

Harris Kenny:
I definitely think what you said is right. I’m definitely trying to have fun with it. I’m trying to embrace this, do something that wouldn’t get through a committee. People are like, well, it’s far. How are they going to get there? But enough people are excited about it. I’m like, let’s just try it. It’s so different though. Let’s just try it. Founder mode,  

Rob Walling:
You’re in founder mode, which is just, no, I just do shit. This is what I just get stuff done because I don’t have to ask for permission. That’s what I like about being a founder. When we last spoke, Harris was wrestling with a big decision whether to raise additional funding while the business was thriving two and a half months later. I was curious to see how that played out.  

Harris Kenny:
So there were these external opportunities that were coming in where people were like, I was getting on a call with someone and they would a big platform and they would say, Hey, we’re interested in outing, kind of like as an ipa, we as a big company want to use your pipes, which is different than us selling to a company running their own outbound, but at scale they would have tens of thousands of customers that would use outbound sync infrastructure. And so in my head I’m like, well, that’s going to be really capital intensive, but every single one of those opportunities moved slower or didn’t materialize at all than I thought they would. And then in parallel, we have grown faster than I thought we would. And so everything changed the thing that I was anxious about and then I decided this was probably financially, if you did remember a summit, if you did a probabilistic forecasting model of what is the number of times that you ran this simulation where this was a good idea. 

Maybe most of the time this was a bad idea, but I had decided in June to tell our recruiter to start looking for another engineer, even though our runway was getting shorter and shorter. I said, look, in case everything goes right, I think we might need another engineer just start looking. And it took ’em about two months to find somebody, but they found somebody that they were really excited about. So anyway, brought him on. He’s focusing on B2B social, so a hey reach integration, which is for LinkedIn and for LinkedIn outreach. He’s done great. And we’re now moving that into beta. Basically. We finished that in about a month and it was a huge lift, but because we had the extra firepower, we could do it. And so that was like, well, I thought I needed an investor to potentially more capital to build that out. 

But we got it done in a month and our revenue kept growing naturally. And now when this comes out, I think we’re going to get, I think September is going to be the biggest month we’ve ever had by a lot. When this comes out, we could talk about more about that, but that was a risky, as things were getting a little more stable, I put more chips in anyway because of that combination of factors. Now I’m like, well, I can get more money in from this new channel faster than I can get money in from investors, so I should just do this. This is a guaranteed capital in no equity exchange, not a distraction. And then if I works and we get to seven 50 or something, I can go into those investor conversations with way more confidence and comfort level and have a way different conversation with them and now have just run this experiment of when we added a whole new channel, this is what it did to revenue. It’s not like a never thing, but those are the reasons why I decided not to move forward with that at this time.  

Rob Walling:
Not right now. So I mean, as we were talking about it, you grew revenue to where you now have infinite runway. That means your break even are profitable, and in your case, you’re profitable and you’re still growing. So I’m wondering what new problems have shown up always the next problem in a startup, right? It’s not like that fixes, that was your number one thing is cashflow. Cashflow. There’s personal, there is business, you’re trying to get to 30 5K and you’ve made it. So what else is starting to go wrong, I guess, or what problems have arisen?  

Harris Kenny:
Definitely. So our tech stack didn’t really make sense. It was for a company too big. I sort came to grips with we’re essentially an SB. We were like three people, now four, I’m doing all the growth stuff, all the marketing, all the sales. I was clicking all of these fields in, I don’t want to say which CRM we’re using, but it was just like, this is too much work. Who am I doing this for? Who am I filling these fields out for? Who am I enriching this data for? It’s just me. The hell’s the point. So it was like just trim it down, just trim it, trim it, trim it way, way down, and then pick some more purpose-built tools. So part of what’s been driving this growth is we’ve freed up time because we picked a better support tool that better integrates with Slack because that’s where all of our customers are. 

We picked A CRM that requires way less rules for us to automate things. So that is, I always thought like, oh, we have a tech stack that can scale. Scaling will never be a problem. But the tech stack we had was really for companies at scale. It was not for companies that were at our stage. It was like, I can’t afford to hire a fractional rev ops person to get all this stuff to talk to each other. And so it’s not working. And so it’s taking me 10 minutes to send a stripe link, get the payment back, close the deal, create the onboarding plan. This shouldn’t take 10 minutes, it should take one or it should be automated. So that was a thing that we’ve been ripping stuff out to handle that better. Also, kind of dealing with, I don’t want to say haters, but there’s been some negative interactions with some people. 

Then we got to target on our back a little bit. Right now I’ve got someone scraping every one of my LinkedIn posts and then emailing every single one of those people saying, Hey, we built something that’s better than out bouncing for this, which no harm, no foul, no hard feelings. It’s not personal. But a year ago, nobody cared. And even a year ago somebody did try to smother us in the crib when they requested a demo of app on sync, took the recording, sent it to a developer and said, rebuild this for me for 2000 bucks, which I dunno if I ever talked about this on the show, but we talked about a lot in the TinySeed founder Slack. But that was a whole thing. So I had some threats early on, but now I have, it’s a different nature that has escalated as we’ve gotten more traction, which I didn’t, I dunno, I just didn’t anticipate. I sort of always thought I’m toiling an obscurity here, but then you realize all of a sudden like, oh, we kind of have a brand actually, and that’s the market, but it’s weird when that crossover happens. So that’s been a little unexpected and I think that’s going to get a lot worse.  

Rob Walling:
You’ve heard Harris mention the quote end of the beginning a couple of times this season, so it seems fair to ask now what’s next?  

Harris Kenny:
I know what the next chapter is, and that’s adding this new channel of social B2B social. It’s adding hate reach, it’s changing the company. And I know what the next chapter after this is going to be. It’s going to be adding phones. We had all this uncertainty of other CRMs and we could be doing more with the data. And I feel a lot of conviction. We’re a Salesforce and HubSpot app. That’s what we have built. So we’re a HubSpot app, Salesforce app, if you use one of those CRMs work for you, and now we’re adding these new channels. So that’s definitely the next, finishing this current chapter is adding hey reach, which is social, and then going to be adding dialers phone tools. Haven’t decided which ones yet, but examples would be like Orum or Nooks or Sales Affinity or phone burner, these calling tools because it’s the same problem over and over again. 

And when we add a new channel, the feedback I’m getting from people over the last month is like, dude, this is a totally different product than we talked about a few months ago. I had some kind of slow sales that weren’t converting or whatever because it’s like one plus one is three. I can get data from this channel and from this channel and I can get these two channels to work together. And the combined value of that is much more than just the individual value of each individual channel being in my CRM. And so when we add a third one, one plus one and plus one is five.  

Rob Walling:
Harris has been candid about how the financial stress of building outbound sink was affecting his family life. Now that he’s reached profitability. I’ve wanted to know if that pressure had finally lifted.  

Harris Kenny:
Well, I haven’t been able to change my compensation yet, so no, yes and no. I feel less stressed because I feel better. I physically feel better in my body just moving around doing parenting stuff. I am excited by the stuff that we’re shipping, and so I feel challenged by that, but I also feel this edge chip on my shoulder a little bit as I’ve been seeing my little SaaS go out in the world and get bullied at lunch. And so that is a change. So I’m going to have a conversation with my accountant next week to be like, Hey, look, we need to, let’s look at how we’re doing now. We’ve had multiple cashflow positive months. I haven’t changed my compensation. Let’s come up with a roadmap to do that so that I can continue to reinvest money in the business. Because the long term bet is that AUN becomes a bigger company, multimillion dollar a RR business. That is still the goal. It’s not to squeeze every dollar out of it. And we will talk through that next week and kind of see what options are around, what are some milestones, what’s a reasonable way to do this so that I’m reinvesting the business and reinvesting in the team, retaining the team. We’ve got awesome people. So they also have bills and they also have responsibilities, and they also have aspirations for their lives. And so it’s not just me that has these things that I’m thinking about too.  

Rob Walling:
As Harris was looking forward, I wanted to see what he was most excited about next.  

Harris Kenny:
Yeah, so for the next six months, it’s hammer down. I think that I’ve seen what’s happening upmarket. I feel like it’s, we’ve had this, the emperor has no close moment. I think we have a really good thesis on what’s happening, and I look at what’s happening with these bigger companies in the space, and I think there’s totally a lane for us. So I want to double our MRR. I want to hit 1 million ARR by the end of the year. So we have four months basically to double. I think that if adding these new channels accelerates revenue, I think it will. I think it’s a reasonable goal. I mean, our compound annual growth rate, if you just project it out anyway, it’s a reasonable goal to hit. And I think that we’re going to bend that curve up. So I mean, I’m excited to make the changes on the personal side, financial as the business has more resources to relieve a little bit of personal pressure and also distribute some of that to the team too. I want everyone on the team to feel like they’re participating in the success of the company. I want to drive that revenue up by adding new channels and really turning this thing from a connector app into something much more, which we’ve been slowly getting there.  

Rob Walling:
Harris had just outlined some aggressive goals doubling revenue in four months to hit a million in a RR. It struck me that his confidence seemed different now more focused TinySeed markets itself as the accelerator for ambitious Bootstrappers. And I was curious how Harris’s relationship with that ambition evolved since he’d first applied more than a year ago.  

Harris Kenny:
Everything about this is kind of hard. I mean, this is a hard thing. And so I think when I think about ambition and channeling being an ambitious founder and wanting to build something cool, it’s just like you got to choose what’s hard about it. And I think what TinySeed allowed me to do is focus on higher value things that are hard because there’s stuff you just got to get through, and it’s a lot easier to get SOC to when you can just sign up for the platform and just sign the contract with the auditor and just move on to the next thing that is going to grow the business. So I think that anybody that wants to start their own company has plenty of scoops of ambition in there and plenty of stuff they’re trying to do. But I think when I think about the impact of TinySeed, for me, it’s like, okay, but where are you going to channel that energy? 

And it allowed me to get some basic things out of the way so I can focus on the harder things, which have fueled the growth of the business. And it definitely has stoked the ambition and aspiration and hope for what I wanted to build and what I want to build. I definitely don’t see myself being cool lifestyle business check. I’m going to bump up my salary and take off eight weeks a year or whatever. I mean, I still feel like we’ve got a lot of work to do, and so that’s the same, but I just didn’t realize how nice it’d be to get some of that stuff off my plate. And then once it was off my plate, I was like, oh, wow, that was, thank God. That’s over with.  

Rob Walling:
As we wrap up your season of TinySeed Tails, what final thoughts do you have for a founder who’s listening to this and there’s thousands? No, there’s tens of thousands of folks just like you listening to this episode right now, and a lot of ’em are wondering if they can make the leap. What do you think? What thoughts do you have for ’em?  

Harris Kenny:
There’s no cavalry coming. I mean, if you want to do this, you have to sit down with yourself and potentially with other people in your life, what going on? And you just got to decide that you want to do it knowing that statistically it’s probably not going to work, but that if it does work, it would be worth it. I mean, I think that that was a gut check moment that I even just had a few months ago around my own physical health. It’s like, you just got to get up, lace ’em up. I’m like, let’s go. I think that when you make that decision and you continuously re-up that decision, because every day you can quit multiple times a day, you can quit and nobody’s going to make you keep going, but you just have to keep doing it. It’s like you’re exploring a map, but the map is unknown, and so you have to keep going and pushing forward and pushing forward and pushing through the fog to to discover the map, and maybe you run out of map. I don’t know.  

Rob Walling:
I love that map analogy. Business requires risk going off the beaten path and trying new things. Success will never be guaranteed, but when it works out, it’s one hell of a feeling. As we moved into wrapping up our final recording session together, I wanted to thank him for the honesty he’d brought to this entire season, and Harris’s response reminded me exactly why these conversations matter. Thanks so much, man, for taking the time to jump on the mic with me every couple months and the feedback that we get. I know you’ve already received some feedback because most of the season has aired. For folks who don’t know, we’re recording this as I think episode four already aired, and so this is very much up to date as of September of 2025, and you’ve been getting feedback and the feedback we receive about all of the TinySeed tails episodes or that they’re really inspiring and whether you have a great success or you don’t quite make it off the landing pad. Hearing other founder journeys I think can help people help normalize it a bit. It always feels like, am I doing this right? Am I doing this wrong? Am I the only one that feels this? And then you’re like, oh, no, people who are quite successful feel and go through the same shit that I am or that I was. And I think it’s a real gift that you’ve given by giving this much of your time to be willing to record this season. So thank you.  

Harris Kenny:
Yeah, yeah, yeah. Happy to do it. So yeah, it’s been great. And remember, just context for me, technically, I had, you could argue a failed consultancy, a failed agency for failed SaaS ideas. None of those materialized into amazing outcomes. So technically, this is kind of my seventh idea in almost seven years. So you just kind of got to keep going, and it just depends on how you think about it. And I’m happy to share the story, and if it helps one person do something cool, or at least take a chance time more than well spent. So thanks for the opportunity, man.  

Rob Walling:
I hope you enjoyed this episode. If you’ve ever wondered what it’s really like inside TinySeed and want to hear a raw, candid coaching conversation between Harris and I, we put together something special for you at TinySeed dot com slash bonus. You should check it out. I’ve never released anything like this before. I hope you enjoy it. It’s at TinySeed dot com slash bonus. 

Rob Walling:
If your goal was to listen to an episode of Startups For the Rest Of Us, you’re in the right place. I’m your host, Rob Walling, and in this episode I talk with Colin Bartlett about his long journey. It’s actually just over 10 years building, growing, and scaling status skater from just an idea back in 2014 to seven figures of a RR. Today, you’ll hear some really interesting learnings that Colin and his co-founder have taken away over the years, and we cover some of those during the episode. And then a nice recap at the end of just some things he learned and would recommend other founders do as well. Before we get into that conversation, TinySeed Fund one has now returned more than 100% of our invested capital, including all fees to our limited partners, and we’re not stopping there. We’ve raised most of fund three, but there’s still a bit of room for investors who are interested in backing ambitious B2B SaaS founders, much like Status Skater, who you’ll hear from in this episode. 

If you’d like to diversify your portfolio out of public markets and index across dozens, if not more than a hundred early stage B2B SaaS companies, reach out to my partner Einar Vollset at EIAR TinySeed dot com to check out our thesis and learn more about our results to date, head to TinySeed dot com slash invest, and if you’ll be at MicroConf, you’re up next week, you can chat with him there. In addition, I wanted to remind you that MicroConf Mastermind matching applications are open. I’ve talked a lot on this podcast about how important masterminds have been to my entrepreneurial success, but finding the right founders to join up with can be really hard. So over the past several years, my team has successfully hand matched over a thousand founders into mastermind groups by looking at their revenue team size, strengths, goals, and a few other data points to make sure your peer group is the right fit. And once you’re matched, you’ll have access to our mentorship series, an eight week program where you can connect with some great minds in sales, biz dev marketing and more. If you’re looking for accountability, honest feedback about your business and the opportunity to make new friends that care about your business, you should apply at MicroConf dot com slash masterminds. Applications are only open until September 24th, so make sure you sign up before then. That’s MicroConf dot com slash masterminds. And with that, let’s dive into my conversation with Colin. 

Colin Bartlett, welcome to Startups For the Rest Of Us.  

Colin Bartlett:
Thanks for having me.  

Rob Walling:
Do I recall correctly that you’ve been a longtime listener of the show?  

Colin Bartlett:
Yes, I have been at least five, six years, seven years maybe. Yeah, for sure.  

Rob Walling:
Very nice. Well, it’s good to finally have you on here as a guest. You’re building status skater with your co-founder, Andy status skater.com. H one is early outage alerts for every app you rely on. You have hundreds of integration slash status pages and you get early alerts. Someone listening to this might be thinking, what is it? How do you get early alerts?  

Colin Bartlett:
Good question. Well, we basically detect when there are outages with providers because people come to our site and look for the status of a service. So hundreds or thousands of people might come to our site. Yesterday, there was a big Google meet outage, had a huge influx of traffic, people searching for the status of Google Meet. Just the fact that they come to our site looking for that is an indicator to us, but also they report outages to us. They tell us about those, and so we essentially say, okay, something’s going on with Google Meet because there’s all of these people looking for the status of Google Meet.  

Rob Walling:
Got it. So Google Meet is when Microsoft Teams Google Chat, discord, slack, WebEx,  

Colin Bartlett:
6,000 services. Yeah.  

Rob Walling:
You have 6,000 services. And so you have this interesting advantage. Let’s say I were to try to build a competitor to you today. You must have a huge SEO Google footprint to be able to  

Colin Bartlett:
Yes, there’s a lot of programmatic SEO. Exactly. Yeah.  

Rob Walling:
Okay, got it.  

Colin Bartlett:
We also pull in their official outages as well. We can tell, okay, there’s nothing on their official status page yet, but something’s going on because all these people are interested in the status of that service. And that was the actual original idea behind Status Gator. The status aggregator was that it was collecting this official status. And so for that, we have over 350 different connectors or checkers we call them, where we pull in this official status data as well.  

Rob Walling:
Got it. And that’s where it started. And then today you’ve added in all, I mean, would you call, I’d call it crowdsourced data in a way?  

Colin Bartlett:
Yeah, exactly what we say crowdsourced. Yeah. So we say you’ll get both official outage alerts and crowdsource, we call them early warning signals. So these are often before the providers acknowledge ’em. And some providers don’t have status pages at all, and we still list them on our platform, and people still report outages about them. Yeah,  

Rob Walling:
Yeah. And so folks actually should follow you on LinkedIn, your Colin Bartlett, and I don’t know, it seems once or twice a week I see a post come up from you that basically says, Google whatever has been out or is down. And we knew it 30 minutes before they announced it. That’s crazy.  

Colin Bartlett:
Yeah, that’s been a game changer for us in terms of marketing or selling our products. It’s really turned it from a vitamin into a painkiller, as they say. Knowing that a service is down is useful, but knowing before anyone else is much more useful. Is it me or is it everyone? That sort of thing.  

Rob Walling:
That’s cool. And give us an idea where the company stands today, maybe in terms of revenue and team size.  

Colin Bartlett:
Sure. Yeah. We’re low seven figures a RR, and we have six full-time employees, including myself and my business partner.  

Rob Walling:
Very nice. And we exchanged notes and kind of a timeline before this interview. And one note, I’ll probably read a few quotes. You had some really, really choice quotes in there, but one of the first things you said is the story of status skater is just one of perseverance more than anything else, because 11 years ago, summer of 2014, you had this idea while you were a contract software engineer. You want to tell folks about the initial spark of that idea and then maybe what it looked like because you launched it, I guess you launched it in March of 2015, so it took you about nine months-ish to build it and get it live. Talk us through that. Early days.  

Colin Bartlett:
I think I did the first commit in December of 2014. That’s when I call it originally born. And our first paying customer was spring of 2015. But this idea was something that I had when I was consulting, I’m a contractor as a software development contractor, and one of my clients had basically assigned me a ticket to say, figure out why this isn’t working on the site. And I spent a whole day build them, whatever, a thousand dollars. Turns out it wasn’t anything with the software at all. It was a Facebook API issue, and not even a serious one, but sort of like an intermittent issue they were having. And it was on the Facebook status page, but I didn’t even know that status page existed. I didn’t think the check there. I just thought, shouldn’t there be some place that I can aggregate all these different APIs because this product connected to a lot of different APIs. Just see the status of this in one place. There are official incidents and outages, and that’s how it was born. I just built it for myself. I really wanted it.  

Rob Walling:
So you didn’t do any validation. Who does the market want this? Is there SEO traffic? Is there any of that? Did you have conversations before you built it or did you sit down and start coding?  

Colin Bartlett:
Absolutely. I mean, I basically built the first version just as a little script on my computer first, and I used it myself and then started talking to all my developer friends. I mean, the original idea was this, it was a developer tool. I was telling this to developers, kind of a mistake in retrospect, but the idea was I was talking to developers and asking, would you use this? Would this be useful to you? And I got a lot of good feedback. I was like, wow, yeah, this would be awesome. Especially now we’ve got a lot of cloud services, everything’s moving to the cloud. How can we get all this on one screen?  

Rob Walling:
And you just said something in passing that I want to dig into, which is I was talking to a lot of developers in retrospect that turned out to be a mistake. What was the mistake there?  

Colin Bartlett:
Well, mistake is developers don’t have money to buy products at a company. I mean, maybe some do, but at an enterprise, it’s not the developer that makes a purchasing decision. That’s not to say there aren’t tons of products that go from the bottom up and get sold into organizations through developers, but in retrospect, that’s not really who’s benefiting most from our product. And the product’s evolved quite a lot, which I’m sure we’ll get into, but it is more of an executive level product or a manager level product. And so it’s not so much developers that are going out there looking for this as it is the people who have the checkbook.  

Rob Walling:
So these days, who would you say your ICP is that actually maybe makes the purchase or finds you or is it a mix?  

Colin Bartlett:
It’s a good question because the product has evolved. It’s been around for 11 years, and we don’t kick people off the platform. So there is a lot of different people using it for a lot of different use cases. Even some really strange ones like competitive intelligence, like looking at when their competitors go down or sales sending email outreach when competitors go down. Right?  

Rob Walling:
Oh my gosh. Wow.  

Colin Bartlett:
But the primary one I would say is IT directors, IT managers, somebody who is trying to primarily reduce support tickets across the organization. So when Google Meet goes down, if you are a large enterprise, you are getting a lot of tickets to your help desk saying, I can’t get into Google Meet. Can someone come fix my computer? Well, not only is it not your computer, there’s nothing you can do about it. So you don’t want 500 tickets about Google Meet. What you want to do is show everyone before they submit a ticket that there is an outage with this service. And that is, I would say, the strongest fit use case for Status Gator. You get one page, you can share it out with your entire team, your entire company, sometimes thousands of employees, and they can see what’s going on with all of these services before they submit a ticket. That I would say is our ICP that we focus on now, but there are still smaller startups and DevOps teams and people who are using it for all kinds of other things as well.  

Rob Walling:
And it’s so interesting. So I talk on the show about horizontal SaaS and vertical SaaS, right? Verticals focuses on an industry, and then I coined this term orthogonal, I think it was last year, about it’s horizontal that can be used by any industry, and that’s your tool, but it goes after a specific title or role in a company. And that’s what you’re saying is it’s like the head of IT or the it, I suppose it could be a VP of engineering or something at a SaaS company, right?  

Colin Bartlett:
Yeah. Sometimes is that role. And I think the thing that we’ve found that has the most commonality among the verticals that we do well in is that they have a high number of, perhaps unsophisticated is a diplomatic way to say it, users. So education is a big market for us. Not so much terms in revenue, but in terms of customer count, things like financial services and legal services, they often tend to have rooms and rooms and rooms full of employees who might not be the most sophisticated people compared to developers who in meets down, they know meets down, they know it’s their problem. And so when you have these industries or these verticals with a lot of people to support, that’s where static GA can be super helpful, especially with the early outage alerts when you get that indicator right away that something’s going on. Yeah.  

Rob Walling:
Got it. So it is ideal for less, you said less sophisticated, but I think you mean less technical.  

Colin Bartlett:
Yeah, basically.  

Rob Walling:
Technically sophisticated, right,  

Colin Bartlett:
Exactly. Yeah.  

Rob Walling:
Alright. And I do want to talk about the evolution of the product the same, but it’s different is how it feels. It’s evolved over the 11 years, and I want to get into that here or a little bit later. But for now, I want to ask you about the early days and how you were not a believer in SEO that you actually thought SEO was a scam. And this is a common sentiment, especially among developers. Now, you and your co-founder are both developers, is that right?  

Colin Bartlett:
Yeah. Yep.  

Rob Walling:
Yeah. And so you have two developer, and you’re back here in 2015, and you have this, well, your co-founder. When did Andy join? Actually, he came in and 2018. 2018, yeah. So at this point, it’s just you’re a dev, you launched this side project in essence, right? It’s not full-time income and you’re trying to get it in front of people. You don’t believe in SEO, but you changed your mind. What happened there?  

Colin Bartlett:
Yeah, I would say the very first early users came from guest blog posts that I did. I did some posts on some other sites, and that maybe is a form of SEO, but I wasn’t really involved in any of that. I just knew that I was getting traffic from these posts, and that was very helpful to gain early traction and get conversations going. And then, I don’t even know where the idea came from, but I decided to publish a page on the site for each service that I was monitoring, which was like 50 pages at the time. And I had them all listed on the homepage, Google Meetup, GitHub down, whatever. And when you click through that page, it would say GitHub up. And over time, this evolved into a very useful page with tons of metrics and information and outage history and all this stuff. But it just occurred to me to put that on the site to make it more full fledged for people who hadn’t sign in so they could maybe see what was on the site. And then I started getting traffic to those pages, people searching for things like, is GitHub down? Is Microsoft Teams up? This kind of stuff. And that turned into basically our number one acquisition channel. I would say 90% of our growth comes from people searching for services online.  

Rob Walling:
So you stumbled into it a little bit by accident, but I, I’m guessing you heard about programmatic SEO from, I dunno, a podcast or Patrick of McKenzie.  

Colin Bartlett:
I don’t know if I ever heard that term. I just sort of felt like, well, this is actually working. Maybe if I created a second page for each one targeting different keywords. And at the time it just felt like a cat and mouse game that was never ending. You choose something that helps and then Google changes the algorithm. And to some extent it is. But if you do those things, you can see incredible results. And that’s the thing we found.  

Rob Walling:
And so SEO sounds like it’s been your main channel for these years, and that was 2015 when you did the landing pages. You have a few years, 2016 to 18 labeled as your stagnant side project era. And what was that? Is it just what it sounded like? You just kind of were like, eh, there’s this thing I’m going to let it grow on its own. Didn’t focus much time or energy on it  

Colin Bartlett:
Basically. Yes. I launched it with payment right away, payment processing right away. I did not want to have another non monetized side project. I’d done 10 or 20 of those, and I got people very quickly enough to cover the Heroku bill. So it was profitable, so to speak, not by my time, of course, but it was profitable and I used it and loved it. So I wanted to keep it going. And I was contracting and consulting and I ended up taking a full-time job from one of my customers. And I dunno, that just monopolized my time basically. And it just wasn’t, wasn’t something I focused on. It was something that I put time into at least every week for sure, responding to customers, fixing bugs, adding services. But it wasn’t something that I focused on and I wasn’t really sure what the potential was still at that point. It definitely just felt like something that was useful to me, useful to others. Who knows where this will go? Let’s keep it alive.  

Rob Walling:
And so what changed for you then? Because in May of 2018, you joined forces with Andy, and as you put it, you built a new company that builds multiple products. You wanted to have a lot of different SaaS products. So what changed for you to suddenly be like, oh, I want to invest in this path?  

Colin Bartlett:
Well, that gig that I had full-time gig kind of went away. Andy was also working with me there. We were both sort of contracting. Again, here it is opportunity to maybe have more time to put into this thing. And I’ve known Andy for 20, 30 years, maybe we’ve had other businesses together too, and it just thought there’s something here, but I don’t know if this is the product that is going to make it happen. There’s a lot of ideas that we have. We’ve always been idea people and had lots of things we wanted to build, and we thought like, let’s work on some of those ideas. Let’s see if we can apply what we learned on Status Gator to some other projects, and let’s see if we can grow a company that grows products.  

Rob Walling:
How do you feel about multi-product approaches now that you’ve done it? It doesn’t sound like it worked out so well for you.  

Colin Bartlett:
Yeah, didn’t a big distraction, honestly. I mean, certainly in the early days when none of them really had any traction, maybe it’s fine. But once Status Gator started gaining some traction, so around 2020, I would say, honestly, during the pandemic is when things kind of clicked for us. Everything was going remote. A lot of people were dependent on cloud services more than ever before. There was definitely more interest in this stuff. There was starting to actually be a market for the product that’s already been around five years. And I think the other ones were either had no revenue or very little revenue, and we just thought, what are we doing? Let’s just focus on this one thing. We didn’t shut anything down. We kept all those alive for a long time, but we just focused on the one that was actually making money. We’re like, we got to stop this multi-product stuff. We’ve got the focus on the thing that’s actually working because it is working.  

Rob Walling:
No, that makes a lot of sense. That’s the entire thesis of TinySeed, of course, is to get people to focus. And we don’t allow folks in who are going to bring in multiple products unless the products are an ecosystem, right? Or highly related to each other, but just scattered kind of the indie hacker collection of ideas. It just doesn’t do it. So then by early 2019, you and Andy are still, you’re kind of doing freelance consulting contracting work during the day, and you have this Nimble Industries, I believe is what the company is called. So by January you’re doing 1100 MRR collective across everything. By January, 2020, you doubled that to 2200 MRR. And then you did something that almost no one ever pulls off, which is you brought in a marketing growth consultant and they actually delivered. This is the key, the first part, developers do over and over and over and over, and I say, I don’t know, maybe 49 out of 50 times, it just doesn’t work. They’re not very good. Zero to one marketing is also really hard, and it often takes founder activation energy. And there’s been a couple, like Derek Rimer brought in, Corey Haynes to help him with early Savvy House stuff,  

Colin Bartlett:
Legendary.  

Rob Walling:
And there are some marketers out there that do it, but your marketing growth consultant sounds like he was instrumental in kick-starting your growth. Yeah. Talk us through  

Colin Bartlett:
That. Absolutely. And I probably left off the part where we did hire someone else who was a dud and delivered nothing basically, which is the norm, but that was short-lived. Yep. We came to Max because now we’re a EO believers, and we started looking more at like, well, okay, this traffic that’s coming to us is great, but they’re not really our ideal profile. They’re people who are searching is Google Meet Down? They’re not people searching for, how do I monitor Google Meet? And so we started to think about content marketing and writing blog posts and doing this content stuff to actually target our ICP. And so we posted on one of those freelance websites, say, can you write some articles for us? And this guy, max replied and said, I can, but that’s not the article you should be writing. You should be doing this stuff instead. 

Here’s a whole bunch of suggestions. I wrote this deck for you. Do you have time to go over it? Which is a great lead gen idea for him. And it was mind blowing to us that he had so much knowledge as to like, oh, don’t do what you want me to do. I’ll do something else instead. Yeah, and we’re still working with Max to this day. The role has evolved over time, and he technically is separate. He has an agency and he has other customers, but he’s been really instrumental in just helping us with experiments and trying things out and seeing what works and the whole SEO and especially the technical side of SEO is really his expertise.  

Rob Walling:
Very nice. And you found one of the good ones. It sounds like not that the other folks aren’t good, but it is very hard to bring in someone to do founder, it sounds like. Who’s doing founder level zero to one marketing, and that’s pretty exceptional. You’ve probably heard that chat. GPT can do all of your marketing, but that’s bullshit. Unless your strategy is blindly following tired, recycled, outdated strategies. If you care about systematically creating a marketing engine that converts, not just throwing spaghetti at the wall to see what sticks you need real humans who actually understand positioning, persuasion and modern customer acquisition playbooks. That’s conversion factory. They’re a SaaS marketing and design agency that have worked with over 50 startups, including several TinySeed companies. Book a call@conversionfactory.co and mention this podcast for a thousand dollars off your first month. And if you’re at MicroComp, you’re up next week, make sure to connect with Cory Haynes in the hallway track. 

So as we bounce through into 2021, January, 2021, you’re at seven K of MRR, and then by fall of 22, you’re at 25 KMRR, and you applied to TinySeed and you got in to TinySeed. The reason we’re telling this story in this way is that it started, this is eight years after you started it, or I guess 2015. So it’s like seven years after launch. You’re finally at 25 KMRR. Some of these things can take a while, especially if you’re not focused on them not putting the, it’s often a lot of iteration and thinking and time. It doesn’t just magically happen on its own. If it had magically happened on its own, it would’ve happened in 20 16, 17, 18, 19 when you mothballed it. And this is something I really want listeners to take home. I harp on this all the time on this podcast, throwing a bunch of ideas at the wall and seeing what grows on its own. It’s not a good approach. You would not be where you are with a seven figure, mostly bootstrap SaaS company if you hadn’t at some point decided we’re going to focus on this.  

Colin Bartlett:
And I think TinySeed was a big driver of that as well, because I would say even going into that, I would not say we were focused entirely on status Gator. First of all, we saw jobs. I mean, 25 KMRR sounds like a lot, but with two founders and families to support, it doesn’t go all the way. So we still had jobs or consulting and we never wanted to take money, never the VC treadmill never interested us at all of us have worked at startups, and it’s just very dreadful idea to me honestly. But we have long time listeners, first time caller, but we just loved the idea of TinySeed not being a high pressure VC engine. It seemed like something that if we were to ever take money from somebody like diluting money, this would be the one to do. And I saw the call for submissions and we were on our weekly call. Andy and I had been doing weekly calls for a long time, and we said, let’s just apply. Let’s just do it right now. And we just did it. And I dunno, two days later you’re emailing me saying, let’s have an interview. It was blowing my mind.  

Rob Walling:
That’s super cool. That’s the thing I seem to remember. And during the interview you saying, we’re not taking money from you or no one. And that was one of the early moments that I realized that the brand we had built with TinySeed or this podcast or MicroConf for me or whatever you want to say, I was like, oh, that’s a very high compliment. You know what I mean? That you would feel that way of like, oh, TinySeed or nothing. What did you expect? What did you think you would get out of TinySeed? I know you applied on a whim, so I was going to ask you why did you apply? And it was like, because when in doubt, fill it out, right? That’s what Rob says. But going in, what did you think you would get out of it?  

Colin Bartlett:
I would say the number one thing is just validation, honestly, that somebody else outside our ecosystem, as you say, your original investor is your spouse. So our spouses believed in us, but outside that, no one ever said like, oh, we believe after eight years or however long it had been that this can be a big enough thing that I would smack down money on the table for it. And for you to say that was just huge. And I think it changed our minds. Maybe it even changed our spouse’s minds even more to say like, okay, there’s really something here. I will hope to get that out for sure. And got that just by having a conversation with you and getting in. But also the money was huge. I mean, we were generating money and not taking a ton of it out. Of course, we had other gigs, but we certainly weren’t going to hire a bunch of people or even contractors without some idea that we would be able to pay them for a while. And it was very scary to us to actually spend the money in the bank account until yours landed. We were like, okay, now we can do it.  

Rob Walling:
And that’s an interesting part of a lot of TinySeed founder stories is a lot of folks say, I don’t actually need the money. What I want is the guidance, the mentorship, the community. But then they wind up, the money comes in and they’re like, no, this is really nice to have low six figures in my bank account and be able to do it. It’s almost this unexpected boon. What did you wind up spending most of the TinySeed money on?  

Colin Bartlett:
Some growth experiments that were maybe too cost prohibitive to run, but mostly contractors to rebuild our site. So I had designed all the various versions myself, and I’m not a designer. And this time we hired an actual UX designer to think about the product from beginning to end and redesign the whole thing. And then we bought in a bunch of front end and rails, back end people just to rebuild the whole thing, which was massive success. I mean, still one of the greatest engineering achievements of my life to completely redo this site while it was still live, it was a big deal. And the product is way, way better from a UX perspective than it ever was before.  

Rob Walling:
And I know you raised prices in fall of 2023. Was that based on our TinySeed urging raise charge more? It’s kind of our  

Colin Bartlett:
Yeah, definitely. Absolutely. TinySeed provided a lot of validation to things that we already knew we should be doing, and I think that’s what I got most out of the mentor calls and playbook calls, we would hear these things and we would have these conversations say, we should probably be doing X, we should probably be doing Y. But then to have the experts who actually have some skin in the game tell us, you should be doing these things, it was like that’s what we needed. So we had raised prices many, many times on new customers starting at $10 a month in 2015 to now $79 a month is our lowest tier plan, but we had never gone back through it’s, it was very scary to go back through and charge that to existing customers, but that was a game changer. Got rid of a lot of dead weight people that weren’t good fits big time game changer. That’s the only little, not even a hockey stick, but it’s the only bump in the graph if you look there.  

Rob Walling:
And raising prices is scary even to do it for new customers. You don’t want to break your funnel, but to go back and to potentially piss off people who’ve been paying you for years, it’s much more of an emotional ride than I think people realize. You need reassurance from other folks.  

Colin Bartlett:
Yeah, I think the second or third customer, whoever paid me money, canceled during that upgrade and it hurt me. I was like, this guy believed in me at $10 a month for many, many years and now canceled, but all for the better.  

Rob Walling:
And so let’s talk now about, I want to continue with this story and get into 24 and 25 and such, but I want to hear how the product has evolved and how you and Andy made the decision to evolve the product. And I’m phrasing it in this way because everyone says, listen to your customers, talk to your customers. The problem is your customers give you, if you get a hundred data points, it’s a big cloud. And it’s like how do you know what to do and which customers are saying the right thing or it’s like a big mess and you got to compile it, put it into your own founder intuition and basically say, this is the direction we’re headed. Right? And your product has significantly evolved from what it was in 2014. So you want to walk us through that journey a bit?  

Colin Bartlett:
Yeah, I would say it was originally very focused on the notification aspect of it, like getting an alert when a service goes down. And we just started to see that some people turned that off entirely and were just using the, I’ll call it single pane of glass, just that single list of all the services. When something goes wrong, they go there and to check it. So looking at the data and talking to customers and saying, look, I don’t really want a lot of alerts. Some of them are noisy and not helpful. I want to just have a place to go. Then we started hearing people saying, well, I want to actually share this out with my company. I don’t want just a dashboard that’s private to my login. I want a public dashboard. We evolved it into a public dashboard and then no one really knew what a public dashboard was. 

So we started calling it a status page, and then we started seeing that people were really using this as an internal team status page, talking to people. They were saying, I want to have a status page for my company. I want to have a status page for my team. So went in that angle and then we started getting sales objections that were more like, well, this is cool. It’s nice, but it’s not like killer because I still have to wait until they update their status page for it to show on that screen. And for me to wait an hour for Google to acknowledge that, it is just not that helpful. And that’s where we started doubling down on this sort of early outage alerts, early warning signals. And that’s been just game changer. I mean, it has completely changed the marketing. I remember, I’m 90% sure it was on this podcast that I heard someone say, you need to have an opinionated angle to your marketing better to have a strong opinion to your outbound marketing or your advertising. And we didn’t have that. We were very much like, okay, well if they take a long time to update their status page, nothing we can do. But now we can say, listen, status pages lie. Everyone knows they lie. They’re very slow. We have a solution for that. And it much resonates much more with people. That’s where you focus now. Yeah, that’s the H one now,  

Rob Walling:
And that’s the thing is this, I was talking to a founder the other day and they have this great tool, but it is essentially a commodity. I can go to 20 other tools and get basically the same result. And so I’ve said it on this podcast and I said it to them in a coaching call the other day was you have to figure out a differentiator and position yourself as we are the corner of the market that does this, right? And so Drip originally was an ESP, and there’s a bunch of ESPs and we were marketing automation, aren’t there a bunch of ’em? And it was like we were lightweight marketing automation. That doesn’t suck, that implies everyone else sucks. And our positioning was, we are so easy to use, we’re a little less expensive, blah, blah, blah. That’s just one way to position yourself. 

You can also position yourself in a vertical. You could say, and this wouldn’t work for status Gator, it wouldn’t make sense, but you can say, well, we’re a CRM and there’s 20 well fricking 500 other CRMs. We’re going to be the best CRM for realtors or the best CRM for Canadian realtors or something. You just pick that vertical. That’s one way to do it. But there are other ways, right? It’s exactly what you’ve kind of, I’ll say, stumbled into that doesn’t give you as much credit. It’s not like it was pure luck. It was knowing you were smart, you and Andy were smart enough to know that you were getting a little lucky is what it is, right? It’s like there were signals and you’re like, oh, I’m going to try this next thing. I’m going to try this next thing. And it just goes to show the iterative path that it can often take to find that unique angle and to figure out how to position that unique angle and communicate it.  

Colin Bartlett:
Yeah, and I think we’re still evolving to this day mean still even this is only a year old, this feature, and we’ve started this angle of really being opinionated and almost adversarial with the people that we’re monitoring. And I think we need to quite frankly exploit that even more than we are already doing more ads, more videos, just more comparing us to what the alternative is, which is just sitting on your hands and waiting for Google or GitHub to update their status page.  

Rob Walling:
And folks go to your site, they can check out your pricing and you have a free forever plan that’s pretty limited starter. I guess these are annual prices, but it’s like 72 bucks a month for starter, 137 for teams, 2 75 for corporate, and then you have an enterprise plan at 800 and up. And when you joined TinySeed, your pricing was, I’ll say relatively low. It wasn’t catastrophic, but it was not as high as it is now. But in addition to that, I believe you started seeing more enterprise deals come in, or at least mid-level deals, right? 5, 10, 15, KACV 20 k, I don’t know what your biggest deals are now, but how did that come about? Because that’s what this dual funnel is what I’m getting at, right? You kind have a dual funnel, you have a self-serve, you’re free in your $72 a month plan. I don’t think you’re doing a big sales process for those, but then for 10, 20, 30 KA year, I think you’re doing a sales process. So that’s what folks will recognize that as the patented Rob Walling dual funnel. That’s an incredible asset to build that, but it’s really hard and not every business can do it. So how did you get there?  

Colin Bartlett:
Slowly with a lot of iteration, I would say. We do have this dual funnel and we do a lot of sales demos and this funnel up to the enterprise plan for sure. I think what we saw early on was that there were companies with very deep pockets who really valued the service and were sort of blown away with how cheap it was at two or $3,000 a year. The hard part was you can’t just tell people, well, you have more money, please pay us more. You need to find something that they just can’t live without. And that took a lot of iteration on the plans and pricing side. And I think especially after a couple of mentor calls and talking to people who did have sort of experience in this, we did get a set of features that was like, okay, you talk to them and you say, well, that’s all well and good, but in order to get X, Y and Z, you have to go to the enterprise plan. They just say, okay, sure. That’s the one we want. And that has really changed the A CV dramatically. I mean that and also just removing things from lower tier plans for sure and raising prices, but getting that right set of features on the enterprise plan so to speak, has been a game changer for us.  

Rob Walling:
And tell me about the free plan. My typical take is, hey, when you’re first starting out, by default you shouldn’t do a free plan, but free plans can work if you know what you’re doing and you have data and you’re looking at stuff. And so I’m curious from your perspective, if you still have a free plan, I’m assuming it’s working for you.  

Colin Bartlett:
It is working. I would say the biggest reason we keep the free plan is it’s very hard to deliver a aha moment in a 14 day free trial with a service that is dependent on other providers going down. And so people sometimes, if they just want a single pane of glass to see all of this stuff, they love it. They sign up in that 14 day trial, great. But if they’re really more interested in the alerting especially, or getting those alerts early, I can’t guarantee that Google’s going to go down in 14 days during that trial. So we keep it around so that people can monitor a few things and stay on it. And then sometimes six months, a year later they’re like, wow, this is so helpful. I just got an alert before that status page. We need to get everything monitored in here. I pass this up to my boss and he wants to get on the enterprise plan. We just did an enterprise deal with a customer who’s been on the platform on the free plan for three years. To me, it just makes it all worth it.  

Rob Walling:
Yeah, I like that. And similarly, you put in the notes, if we smash cut to 2025, you’re the early warning signal status page. Now you can predict outages. But you said it’s essentially turned us into a two-sided marketplace, which as everyone knows, don’t bootstrap a two-sided marketplace unless you already have one side. That’s what I say. So you did already have one side.  

Colin Bartlett:
We did have one side,  

Rob Walling:
And you were doing hundreds of thousands if not low seven figures in revenue as you decided to make this pivot, but not even a pivot, but just as you adjusted that thing two-sided marketplace is working and is it a headache as well?  

Colin Bartlett:
Yes and yes. I mean, the reality is we basically sell data from visitors to our site to enterprise customers. That’s the two sides of the market. People visit our site report an outage for free. They don’t, doesn’t cost you to report an outage. That’s one side of the marketplace. And the other marketplace is people come to us to buy the service, buy those alerts. So we have to cultivate both of those angles. We have to spend energy on SEO. That has nothing to do with targeting our ICP. It has only to do with ranking for keywords like is GitHub down? And that’s exhausting because it’s hard enough to do one SEO angle, but to do two across 6,000 services is a lot of work. And yeah, it’s annoying. I wish that it didn’t have to be, but unfortunately this has been a game changer for us. So now we now probably put a disproportionate amount of time and energy into that other side of the market, and most of the growth from the other side is just organic and kind of referral and natural.  

Rob Walling:
So you are a begrudging two-sided marketplace operator versus all the people who used to write into this podcast before. I just said flat out, I’m not answering two-sided marketplace questions. Who really want to do it? Yeah, don’t do. It’s the thing unless it makes sense. You guys made that very deliberate decision to do it with all this data. And again, a SIM figure or SaaS, that’s a different position. And I have an idea to connect people who cut hair with their dog, people who own dogs, and such as we wrap up, I loved that I asked you to send over your timeline so that we could tell the story and at the end you just put lessons learned. And I want to walk through those real quickly. The first one you said is talk to as many people as you can about your product idea. Beg for feedback. This is the number one thing I recommend to all early founders. So some type of validation in quotes. It doesn’t have to be this prescriptive, oh, I follow exactly what Rob Walling says in cess Launchpad, right? The steps, or I follow exactly what Eric re said in Lean Startup, but there’s some research, some conversations that should probably be had before you go sit in a basement and code.  

Colin Bartlett:
Yeah, absolutely. I think the most valuable ones were things that we had with real customers or even real prospective customers. Even to this day, we all pitch in on support tickets here and there, and then when I reply to a ticket for sure, I always say, I handled that for you. By the way, house status Gate are working out for you. And you would be shocked at how many people open up them with just that simple question like, oh, it’s great. We love it. Here’s a nice tidbit for your website, a nice little quote. But also, here’s the thing I think could be improved. You get a lot more valuable feedback from interactions like that than you do asking someone in a bar whether you think this is a good idea to build, because they’re going to say yes. It is just way more natural. And so we just literally, at every chance we can in every email, just ask people, literally beg them for their feedback. I would love to hear feedback. It’s really important to me. We’re a small company. Please let me know what you think. And yeah, it’s very hard to filter through all that, but through those things, you get the pieces that are useful.  

Rob Walling:
The second thing you said is charge more in general, which is like, all right, I don’t think we need to belabor that. Third one is we invented a product category. Big mistake. Didn’t really intend to do that. You were just trying to solve a problem you had. Maybe that’s why it’s taken 11 years. Well, I mean I guess there was a kind of the highest mothball, but it has been kind of a wandery implies a negative thing, but it’s taken a lot of trial and error to get there. I think perhaps because you did invent a product category.  

Colin Bartlett:
Yeah, status page aggregator didn’t exist and we made that up. We could say we invented that. The reality is that is our number one keyword now that people search for. We dominate that keyword because we have first mover advantage there. But no one was searching for that in 2015. No one even thought about that. It reminds me a lot of just status pages in general. Atlassian acquired status page IO many years ago, and when status page IO came around, they kind of invented the status page idea, and I think it took a long time before everyone had to have a status page. Now everyone has a status page. Soon everyone will need a status page aggregator as well.  

Rob Walling:
Next one is a multi-product company is a fool’s errand. To some extent we still are, but we are far more focused than ever before because you have,  

Colin Bartlett:
We do have another monitoring tool that we acquired and kind of a plan to merge and never did, but it’s a very, very minor piece of our business.  

Rob Walling:
And we talked about this earlier about multi-product. And lastly, you said being focused on a narrow ICP has huge benefits and I want to call out to listeners. You’re not saying you need to have a narrow focus on a single ICP to succeed, or you must or anything. You’re just saying it has huge benefits and maybe I can just toss it to you of what are some of those benefits that you’ve experienced?  

Colin Bartlett:
Yeah, I think the challenge with us is because the product has evolved so much from just that early alerting tool in the beginning or just alerting tool in general to now single pane of glass status page aggregator, there’s a lot of people with different roles and titles and use cases. The idea for us is that it’s really hard to abandon those people now and just decide on one and remove all the features that those people depend on. It’s really hard to focus at this point because we were evolving for so long, but if I were starting over, I would definitely focus on a single use case. And for us, the primary use case and the best fit is this IT support angle. People seeing the status of all of these services in one place that is our ICP, but it is still spread out among a lot of different roles and titles and it is difficult.  

Rob Walling:
Colin Bartlett, it’s been a pleasure having you on. If folks want to keep up with you, you’re on the LinkedIn and someone can Google Colin Bartlett LinkedIn status skater, you’re the first result, or we’ll link it up in our show notes and if they want to see the best status page aggregator on the internet, status skater.com. Thanks again for joining me, man.  

Colin Bartlett:
Thanks for having me.  

Rob Walling:
Thanks again to Colin for coming on the show. Thanks to you for listening this week and every week. This is Rob Walling signing off from episode 798.  

Rob Walling:
It’s Thursday morning here at Startups of the Rest of S hq, which means we’re back with TinySeed Tails season five. In this season, we’re following Harris Kenny as he grows outbound sync. This is episode five, it’s the penultimate episode. During his time at TinySeed, Harris has had to work through some tough decisions and he’s relied on the mentorship support and community that the TinySeed Accelerator offers to early stage founders. But if your SaaS company has already hit its stride with over a million dollars a year in revenue, and you’re not looking for funding, but you still want access to top tier advice and mentorship and a strong founder community, that’s where the TinySeed SaaS Institute comes in. The SaaS Institute offers mentorship advice, mastermind groups, one-on-one coaching. It is a premium coaching program for folks doing seven and eight figures of a RR focuses on B2B and some B2C SaaS, and we have an amazing roster of mentors as well as three incredible and accomplished coaches who are ready to work with you. If you feel like you could use some community mentorship and support, get all the details and apply to find out if you’re a good fit at TinySeed dot com slash institute. Now, let’s dive into this episode.  

Harris Kenny:
It’s a old Churchill quote, but this is not the end. It’s not even the beginning of the end, but perhaps it’s the end of the beginning and that’s kind of my mindset right now. I feel like it’s like the end of the beginning.  

Rob Walling:
Welcome back to Tiny Sea Tales, a series where I follow a founder through the rollercoaster of building their startup. I’m your host, Rob Walling, a serial entrepreneur and co-founder of TinySeed, the startup accelerator for ambitious SaaS Bootstrappers. Here in season five, we’ve been talking to Harris Kenny, founder of Outbound Sync. During our journey with Harris, he’s continued to grow his company from zeroing in on niche clients to signing big contracts to recently hitting $35,000 of MRR. Outbound Sync is showing all the signs of a healthy business and he now has infinite runway. While he’s gaining momentum, Harris is still a bit unsure of what his new phase has in store. Last time we talked to you, you had just hit 20 K and you were like, I need to get to, I believe in that episode you said I need to get to 30 K to break even, but it became 35.  

Harris Kenny:
Yeah, my damn accountant, that guy. It’s definitely him. It’s not the numbers. No, I mean it was basically we had some annual costs that I wasn’t thinking about. In a normal month it is 30, but we had our SOC two both payments to the auditor hit and a couple other things that are, we don’t have that many annual contracts, but we have literally three of ’em, but they all hit in Q1, so he was like, so we moved the number up to 35.  

Rob Walling:
Got it. And it’s only been a few months since then, right? Three maybe since you were at 20 K. So you’ve grown 75%, I mean that’s 15 K of MRR almost doubled. MRR. What is working? What moved the needle for you?  

Harris Kenny:
Two big things. Adding integrations for other platforms we added instantly has been a really big one for us. And then continuing to make Salesforce better, there’s been certain features that as soon as we ship it, we’ve unlocked revenue where people say, we have to have the lead object. If you don’t have a lead object, we can’t use your integration. And then as soon as we ship it, they get started. So that’s been one part of it. One part of This’s like motion. And then the other one has been focusing more on partners. I actually brought on a sales coach and I actually cut my pay to cover it because I was like, I just got to get to profitability. So focusing on the growth part of the business that’s working and I can talk about bringing on the coach, why did that and the insights that we’ve had there and how every 24 hours, I’m wanting to cut that expense. But I think probably because it’s a good thing, just like I don’t feel like stretching before I run. So those are the two things. I think integrations and partners  

Rob Walling:
Are partners. Are these agencies? What is a partner?  

Harris Kenny:
They’re growth agencies. It’s a very specific kind of outbound agency that’s typically using a tool called Clay, which I’m sure we’ve talked about in past episodes. But sequencing tools like Smart Lead and instantly and email bison as well. We have not found success with traditional CRM partner shops. There’s like 7,000 HubSpot partners, there’s who knows how many Salesforce partners. And even though I consider us a HubSpot app, a Salesforce app that has actually not at all been a successful agency, I can count on one hand the number of ones that we have that fit that description, but for this other kind of growth agency, it’s really, really successful.  

Rob Walling:
Has SOC two landed some of these deals or made Impossible? Totally, totally been worth it. Then  

Harris Kenny:
We’re cruising through security reviews. We’ve been through multiple of ’em. I give them access, they approve it, and it’s so worth it. And I really leveled up, I dunno, you take these, a little points of pride in these random things, but I am really proud of our trust center, which is where we have our report, and I looked at some other companies and how they did it and I added some more documents and stuff, so it looks really legit. And so there’s this initial screener that I think people go through in their head and we’re passing that. And then when they look at the report, we worked with a good auditor and so that’s totally, totally been worth it for sure, and it’s made us better, made us better too. We’re catching bugs better. We are building a better product because of it. Because I’m a non-technical founder, I think that it has made us put some practices in that our engineer was probably like, ah, we don’t have to do that. And he’s right. We didn’t have to do it, but as we’ve added them, it’s made us better. And it kind of covered a blind spot for me, I think as a non-technical founder. So I don’t know how much that would apply to other people, but for me it’s been good.  

Rob Walling:
Harris has hit the magical milestone. I like to call infinite Runway by getting to breakeven. He has enough cash to keep going for the foreseeable future, and this is a huge deal. And even though Harris isn’t all that big on celebrating milestones, he’s feeling pretty good about this one.  

Harris Kenny:
It feels really good, for sure. My timeline was right, so I joined TinySeed Spring 24 batch. We went to San Diego in May, which was awesome. At that time when I left, I thought to myself, I want to be profitable a year from now, which was June 25. I thought the number was 30, it was 35, but we were on schedule. So it did kind of work out because these last couple of months we’ve really been ripping. I mean, we just keep growing 10 to 20% every month, but because the number keeps getting bigger, the dollar amount is going up, 15% growth in May and June is 5,000 bucks.  

Rob Walling:
Yeah, that’s hard. 

It’s really hard to do that. Usually it’s an absolute dollar amount at best, right? It’s where it’s like, oh, we’re growing $2,500 a month every month, and even that is really cool for a bootstrapper. But then the percentage goes down over time as MRR goes up because that’s how math works. But to truly grow a fixed percentage or in the venture space, they actually want that percentage, the rate of growth to be accelerating. That’s like, oh boy, all right. I mean, it’s great, but it’s very, very hard to do. Even just maintaining a static percentage is way harder than most people realize. It’s crazy. You’re executing on the right things. This doesn’t happen by accident. I don’t want someone listening to this think like, oh man, Harris got really lucky, or This is how all successful companies happen like this. They don’t. You are hitting some really, you shot a gap in a need. You saw the need, you built it, you went with your gut, you transitioned, you’ve done all these things, but it just feels to me you really know how to focus on the right things. Does that feel like that to you? Do you think about that?  

Harris Kenny:
Yeah, I’m saying no all the time. All the time. I mean personally as well. Yeah, no,  

Rob Walling:
We’ll get to that.  

Harris Kenny:
Should we trying to brush your teeth, we need to go to bed. No, we can’t have donuts for whatever. 

So I feel like I’m constantly saying no to things. So being a parent of young children and being a bootstrapper, you just feel like you’re constantly saying no to things. But I’m like, I can’t. People ask for things and I’m like, they ask for integrations with other tools, tools that I like, and I’m like, sorry, I can’t do it. I just have to do, we have very limited bandwidth, and so this is all we can do right now. I do think I’m making good choices. I think I’m listening to people really well. Our partners, I really believe in the growth agencies we work with. I mean, I really love these guys and girls, these folks. I really consider them friends, and I do feel like we’re doing it together and we’re building the tools that are unlocking new deals for them to move up market.  

Rob Walling:
Do you have an internal dialogue when you’re making these big decisions or is it, I’m trying to get to your process of does it just feel right? You have all these things in any given day, there’s five, 10. In any given week, there’s 20 or 30 things. What should we build next? What should we focus on? What right? It’s all coming at you and yet based on your growth, you’re making generally right decisions most of the time. So how is that, how are you doing that? Does it come to you and you’re just like, it just feels right and I head in that direction? Or is it a back and forth? Is there a conversation with anybody or is it an internal conversation of I’m really wrestling with this and I’m just going to lean?  

Harris Kenny:
I mean, I do think that we have at this point a pretty good track record. So if I go back to our first month of revenue, which was October, 2023, we have been between 10 and 20% growth on average throughout that whole time. There’s a couple exceptions. The third month was a down month, and then right after we joined TinySeed, there was actually two down months as we were metabolizing the capital, but then we have other months where the growth was over 50%. So I do think that I am consistently making good calls so far. Why or how am I doing that? I mean, I think I’m trying to really focus on value. So I mean, I ran an agency for three and a half years and I ran a HubSpot agency and we were also doing outbound. And so what I’m trying to root, what we do is in results. 

So it’s in the outbound world, that’s meetings and that’s deals and it’s booking them and then proving that you booked them and then the block list part of our product. And also not stepping on meetings and deals by emailing the wrong people. And so that I try to be our true north of is this going to help people book more meetings and deals? Is this feature going to allow them to route the data inside of Salesforce so that a sales rep can make a call or, okay, well that’s a good feature and we should build that. Or do we just have to fall on the sword and build something to account for an issue with data that we’re receiving from one of the upstream partners because they have weird inconsistencies sometimes. And I just think if we fix this, will it help our customer close another deal? 

Yes. Do they care that it’s not our fault? No. They just say, Aon sync, your job is to put this data in the CRM, and so I could wait for the provider to fix it, or we can provide something in the middle to fix it. And I try to be really accountable to them. I mean, I have to credit our CSM also, he has freed up a huge amount of mental space for me to be able to focus on this stuff. No, I mean you were, early on, you were like, dude, this is a no brainer. Bring the dev on full time and get a CSM. And both of those were just massively. Correct.  

Rob Walling:
Awesome. That’s good. That’s pattern matching. Well, no, that was my gut feel, right? Well, Rob, how did you make that decision to give you that advice? And it’s like it felt right, it just made sense at this stage of the business. So sometimes that’s it decision  

Harris Kenny:
Making. Well, that 220 companies,  

Rob Walling:
That helps, but you’re doing it without 220 companies and yet you’re doing it well.  

Harris Kenny:
Yeah. So those things I, those investments in people were really important. So I think that that’s in general, my North Star is I think that in a perfect world outbound sync, we’re helping winners win. We’re helping people who are generating meetings, who are doing the work, do that job better. It’s not for meetings. It’s not to impress people internally. It’s not to post on social media people that have rolled their sleeves and part of the lunch pail crew of doing cool stuff, and that’s who I feel like we’re building for and who I like getting on calls with and talking to. And so I think that that is what I try to ultimately orient back on. And then sometimes I just make a fast decision. I don’t know. And so I just make a decision and we move on.  

Rob Walling:
But you do have a North Star. I like  

Harris Kenny:
What you just said, but that’s the guiding thing.  

Rob Walling:
In the last episode, Harris mentioned that he didn’t want to raise any more money, but over the last few weeks he’s been mulling over that decision. He and I had a few conversations, one of which we recorded and released it as a secret episode. If you go to TinySeed dot com slash bonus, it’s kind of a behind the scenes of what it’s really like to be in TinySeed as a startup founder. Harris also talked to a R, my partner in TinySeed, and the conversation surprised him a bit.  

Harris Kenny:
This is the most unsure I’ve been of what to do next. As we talked about it, you were neutral, but you said, look, from your perspective, you were like, if I were in your shoes, I think I might raise based on everything that’s going on in the business. Talked to Einar, and of course he was like, what? No, you should never raise, don’t  

Rob Walling:
Raise. This is the best. When you talk to two people and they tell you the opposite and you’re like, but I trust both of you, which exactly why did he, because I’m actually surprised by that. Usually Ann’s like, Hey, if the fire’s going, add more to it. But what was his logic?  

Harris Kenny:
He was like, you’re growing fast enough. He was like, basically, you haven’t exhausted your options if one of these partnerships can get you some non-dilutive capital into the business so you can accelerate engineering. He’s like, you need to chase that down, and if you’re not chasing that down, then you should be basically, he’s like, I don’t see you at a point where you have no other choice. He’s like, so you should just see how that materializes, which I think you would agree with too. And so that was kind of where he left off. We hit 35 faster than I thought. I didn’t think I was going to hit it this quickly. And we have a family trip coming at the end of the month, so I’m going to try to only work 30 minutes to an hour in the morning. Everybody gets up just to make sure nothing’s on fire because there’s a lot of things that do depend on me. 

Still, unfortunately in the business, there’s just too many things that are path dependent on me, but get mostly relax and then get back in July and let these partnerships, conversations simmer a little bit. So I’ve gone back and forth. I listened to our conversation. I asked if we could record it just so I could re-listen to it, and I listened to it probably four times, and I felt really conviction to go out and raise. Then I’m like, oh, all of these hot opportunities, I thought they’re not developing as quickly as I thought they would initially. So maybe I don’t have to rush, but then have another conversation and I go, oh, well, this is happening fast again. And then it kind of simmers because what’s happening now is we built for teams. Then we realized Andy at Rado in San Diego, at as soon as I announced that I was moving away from my agency, some of my old agency buddies were like, Hey, I want to use outbound sync now. 

And I remember meeting with Andy before breakfast and we sat in the lobby of that hotel and he was like, dude, just figure out a basic way to just sell something to him and just let it play out. And that was a huge piece of advice from him. And so anyway, then we built for agencies that has now a huge engine for the business, but now there’s this third platform revenue play and it requires more engineering and higher level of execution. And I just don’t want to miss an opportunity because we are in a really unusual spot right now. We’re building something that nobody else wants to build. Nobody wants to build these pipes, but there’s all these AI applications and the AI needs data, and we’re in the job of categorizing it and filtering it and processing it and putting it in the right places. 

Really boring stuff that nobody wants to do. And so when I have these conversations with platforms that say, well, we want to integrate that data, and these are some really big companies that have raised over a hundred million dollars, I think we need to be ready. So anyway, as you could tell, I’m still not sure. I didn’t think I was going to be in this position. This is going better than I thought it would. As hard as it’s been as stressed as I’ve been about money, as much as I wish I were exercising more in general, this has gone better than I thought. And so I’m surprised and a little unsure of what to do with where we are today. I feel like a plane is going up, but it’s not pressurized or whatever. I’m feeling altitude a little, so that’s a little weird because for the last two years, I’ve known exactly everything to do.  

Rob Walling:
I love that. When I invited you, I said, Hey, let’s record tomorrow before I leave for a trip. And you said, well, if you want a confused drunk walk of this decision, I said, that sounds perfect. Why, man? Because most of the listeners listening to this are thinking to themselves, I’ve been in a place where I had to make a big decision like this. Whether it’s fundraising or not is not the point. It’s like the agony. And it feels good to know that other people experience this, even someone as successful as you, because even at the point you’re at, again, having grown 75% in the past three months, you’re a model for success. A lot. A lot of bootstrappers would aspire to get where you are.  

Harris Kenny:
Thanks. I appreciate you saying that. It does feel weird to be here having been a student of it for so long, starting listening to startup through restaurant and walking around the park in 2020. So it is weird. It is weird to be here for sure. And also feel like I have a quote on my phone. It’s old Churchill quote, but this is not the end. It’s not even the beginning of the end, but perhaps it’s the end of the beginning. And that’s kind of my mindset right now. I feel like it’s the end of the beginning. It’s like the prologue is over and now what? So that’s really on my mind. It’s kind of cheesy. I kind of feel like I’m a Pinterest dad or something, but every few months I change the wallpaper on my phone to, and that’s my current mindset.  

Rob Walling:
You should stitch that on a pillow and put it on your pad. It’d be really cool. No, I love it.  

Harris Kenny:
There’s a little live laugh, love back there.  

Rob Walling:
Oh, yeah, exactly. And turned the quote. No, but I talk about first you build a product, then you build a business, then you build a company, and then it goes even beyond that and you build multiple orgs within a company as big as it gets. But it’s like you definitely what building a product is, and that’s when you get to five KA month, maybe 10 KA month, and then now you’re like, oh, business, there’s stuff coming in and out. Do we need payroll? You hire a couple people, you make your first hire, and it’s like, all right, now it’s a business and we’re going to try to get to break even usually, or we’re going to raise funding, whatever. And so whether that happens 20, 30, 40 k, then you start rolling into building a company where it’s like, oh boy, okay, I need to hire more people. I need to hire Potentially not yet, but let’s say 50 K, more a hundred K. You’re looking at hiring leads and managers. You’re looking at getting even company culture docs in place, which is totally outside what we’re talking about now because that’s not the most important thing. But you are in this transition period of, I think from business to start thinking more about company building.  

Harris Kenny:
Yeah, I think that’s right. I think that’s right. For sure. I mean, there’s so many things that are so inefficient right now that I’ve just been like, I will sacrifice anything on the altar of MRR growth with the exception of my relationship with my children and my wife and stuff like that,  

Rob Walling:
And your assets. It’s just been morals.  

Harris Kenny:
Hey, yeah, this is a dumb thing within the context of B2B SaaS, but this is a dumb thing. I got to click a button 10 times, but just do it. We’re still sending Stripe payment links to people. We don’t even have billing integrated into the app yet. We don’t  

Rob Walling:
Need it. Need, you’re going to hit half a million a RR, and it’s just like, yeah, we’re still figuring it out. Totally. Not even figuring out, we still have these loose ends and it just doesn’t  

Harris Kenny:
Matter. Yeah. So I think about that and I think like, oh man, it’s so stereotypical, but people are like, we’re just getting started now. I feel like that I have the freedom to not be as anxious about money that we’re about to go full tilt because I think that there’s some stuff that we have this flywheel of we’re connecting these multiple tools horizontally, but if we connected them vertically where your email tool could talk to, your LinkedIn tool, could talk to your dialer, and they’re all these on the edge best point solutions, you start talking about something that’s really interesting. And then if people want to pay to tap the pipe basically to be able to pull those insights out. So then I get excited about it and I think like, oh, this actually, this is an interesting company and this isn’t just a connector app lifestyle business. 

And I will say, I don’t feel like in a position to give a lot of advice, but from my experience, swing at the pitch. If you think you’re getting a good pitch swing, I definitely think going all in on this has been, there’s not a version of this where I went halfway and it worked because I know multiple people that run agencies who had built almost identical versions of what we had built, and none of them have gone anywhere with their products. So I actually have a pretty good AB test, and it’s like only by saying I’m going to do it without saying I’m going to give away the whole company, but just saying, I’m going to focus. I’m going to raise enough money just enough, just barely enough, and I’m going to focus on this thing. Did we get here and I just don’t have a path or a mapping in my head of what’s next,  

Rob Walling:
But in your head, what are the main reasons to do it and what are the main things that are like, Ugh, I don’t want to do this.  

Harris Kenny:
I feel comfortable with you and with TinySeed, and I felt comfortable of what the bet that TinySeed was placing on me when I raised that money. And I thought this trade is so fair. If I, they’re helping me shut down my agency, I am happy to give away this slice of my company for that. No hesitation on that, the mentorship, the community, all that stuff. It was like, yeah, dude, you get in, do it. But from here it’s like, well, what’s the value of each additional bit of equity in the business? What are the expectations With that? You kind of threw me through a loop because you were, in my head, it was like you either you do the TinySeed thing and then you bootstrap forever, or you do the TinySeed thing or not, and then you end up on the venture wheel, but you were like, look, because of the network that you have and because of the growth, you could maybe raise up to half a million dollars in safes at a reasonable valuation and you might be able to raise that faster than you think. 

And that was a whole third door I wasn’t even aware of. And so that has what has scrambled my radar because in my mind it was like, there’s two doors and I’ve walked through the first door and let’s do this thing. But now it’s like, oh, and why would I do it? Why would I raise the money? Every time we ship an integration, we make more money. I’ve got 30 people that I could convert into MRR right now. If I had that LinkedIn integration, I know it. There’s other CRMs, Pipedrive close, there’s calling tools. I have calls every day with people who are like, oh, yeah, I’m really frustrated with how my unicorn dialing tool doesn’t talk to this other thing. And they’re spending literally six or seven figures on their go-to-market when you include their people and their tools and stuff. So it’s like there’s just a lot of money in there, and that’s in my head of big opportunity. 

And then when I have calls with the really interesting people that are interested in what I’m doing, that’s kind of like a signal to me that I’m onto something. When I first decided to go in on outbound sync is I would have a call with a really big company and they asked me about SOC two, and I was like, sir, this is a Wendy’s. Like all this is a make.com scenario at the moment. But they were so big that they were interested in it. It said to me that there’s something here, and that’s what I’m feeling again, but I don’t know how to interpret it. Is it just stay on the path. You’re doing the right thing. The reason why you’re successful is because you’re focused, or is it like, okay, if you look at the chart, after we joined TinySeed, we didn’t just keep growing. We grew faster. And so it’s like, oh, is this the opportunity to do the same thing again? And I’ve never been here before, so I don’t know.  

Rob Walling:
It’s a big decision. You have time before you need to make it. It’s nice that you do have that time because with big decisions like this, I have to sit with them. I can’t make snap decisions because I will go back and forth one day I am four, one day I’m against. And eventually I just start feeling which is the right one. Sometimes I need more data and sometimes I just need time to kind of let it out. Being a founder means juggling a lot, especially when you’re considering something as big as raising funding. But even as Harris weighs his options, he’s not taking his foot off the gas when it comes to sales. In fact, he’s ramping things up.  

Harris Kenny:
So I had been talking to Daniel Hebert, so his company is Sales MVP lab. He’s worked with multiple TinySeed founders. He’s really focused on founder led sales. And I’d been talking to him for a bit, and I was getting frustrated because deals were stalling that I felt like should have been closing. And I mean, the last time I was a quota carrying rep was in 2013, but I was like, look, I’m rusty and I’m talking too long and I’m making some mistakes on these calls. I shouldn’t be losing as many of these as I’m losing. So I made a decision that I think in hindsight, I’m not sure was the right one. I cut my pay to cover the cost of the coach. I didn’t want to affect the burn on the business, and that really stressed me out more. I think probably in hindsight, I wouldn’t have done that. 

I think it definitely negatively affected my mindset and it a little bit tainted my mindset going into the coaching. I was a little resentful of it, like, well, this is costing me money. This is literally personally essentially coming out of my pocket, so this better be good. Which isn’t the best growth mindset probably that one could have. But I’ve stuck with him doing a great job. And the biggest, most valuable thing that he emphasized is he was some good positioning things coming to terms with like, look, we compete with Zapier and low code tools. Say it out loud, confront that, and then come up with positioning against that because everyone knows it and everyone’s thinking about it. Do I need to buy a dedicated tool for this? Or can I use Zapier and eight N or Make? And I wasn’t doing a good enough job of that, I think. 

So he helped me with that, and then he helped me with, look, if a go to market, I should know this. How many literally hundreds of episodes have I listened to of your podcast, but double down on the growth channel that’s working. He was like, if agencies are easy, just do more of that. And I was just making this mindset mistake of like, okay, well this part’s so underperforming. If I could just lift up these direct deals, then I would be growing faster. But he was like, yeah, but these other ones are going so great. You should just focus there. And so those two insights for him were really, really, I think, critical to the fact that why these last two months were so good. He understands the mindset of what it’s like to work with a founder who’s trying to grow their company in a way that is really unusual. And so I’m sticking with it, and I think it’s been a good investment for sure.  

Rob Walling:
While the investment in a sales coach seems to be paying off, it’s easy to get stuck in a loop of constantly second guessing these types of decisions. These challenges often spill over into your personal life. And for most founders, I know it’s tough to truly switch off work at the end of the day. So I wanted to ask Harris, how he’s handling it all. Are you able to compartmentalize that stress from and shield your family from it, or do you feel like it bleeds in  

Harris Kenny:
Sometimes? It bleeds in for sure. Yeah, for sure. I mean, sometimes I just have less energy. I’m just tired and my brain chemistry is off. I only slept for five hours and the two hours before bed I was working and the two hours after I woke up, I was working. So it’s like, yeah, well, how ready are you going to be to try to get someone to school in that biological state? Probably not. So I get a little frustrated for sure sometimes. I mean, I’m not going to sugarcoat it. I’m not going to lie. Definitely there’s times where I’m not like my best self, nothing I would be ashamed of, but it’s not something I’m proud of, I guess, if that makes sense. There’s a little middle line of like, yeah, this isn’t that big of a deal, dude, you could chill out. It’s okay if you’re a minute late.  

Rob Walling:
It never ceases to amaze me that when we are at the age that we have younger kids, we are also trying to build startups because look, my kids are 15 and 19 now. I could totally build a startup now, and it would be 10 times easier because they just need a little less from me these days. And yet, I don’t want to build a startup now because I’m too old. I’m not too old, but I don’t want to, I wanted to do it 20 years ago. You know what I mean? And so it’s like, why does all this have to happen at once? Why do I have young kids and a startup? No, no, no. Can I do these out of order? Can I build a startup before the kids? Can I do the kids before the startup? It’s not fair. It’s not great, but it’s what we power through  

Harris Kenny:
Too many dependents. That’s why I’ve said no dog  

Rob Walling:
Balancing family and startups never gets easier. But Harris is making it work one decision at a time with every step forward, new challenges and questions emerge. Will his focus on sales and careful timing help him keep up the momentum and how will he handle the inevitable trade-offs that come with growth? We’ll dig into all that and more next time on Tiny Sea Detailss. Hope you enjoyed this episode. If you’ve ever wondered what it’s really like inside TinySeed and want to hear a raw candid coaching conversation between Harris and I, we put together something special for you at TinySeed dot com slash bonus. You should check it out. I’ve never released anything like this before. I hope you enjoy it. It’s at TinySeed dot com slash bonus. 

Rob Walling :
Welcome to another episode of Startups For the Rest Of Us. I’m your host, Rob Walling, and in this episode I fly solo to cover topics ranging from how outsiders don’t understand how complicated many topics are. It’s called the Dunning Kruger Effect. We’ll dive into that. Another one is answering the question of isn’t marketing just convincing someone to buy the stuff I’ve built? I’m going to talk a bit about how the idea that there’s no one right answer for how to grow your company is a flawed and potentially dangerous statement and might even get into another topic or two depending on time. Before we dive into the episode, MicroConf Europe has sold out. We have sold out all of our events for the past few years, and I’m looking forward to being in Istanbul in less than two weeks with everyone who decided to buy a ticket. 

If you want to get notified when tickets for our next event goes live, head to MicroConf dot com slash events and get on our mailing list. So you’re the first to know when tickets are available. I expect our events to continue selling out, so if you want to join me in a couple hundred of your favorite bootstrapped SaaS founder, friends, head to MicroConf dot com slash events. In addition, MicroConf mastermind matching applications are open. If you’re tired of tackling big challenges and making critical decisions alone, imagine having a hand-selected group of peers who really get it. These are people who understand the highs, the lows, and the late nights of being a founder because they’re living it too Together, you push each other forward, keep each other accountable, and you share honest feedback you won’t find anywhere else. That’s what you get with MicroConf Mastermind matching. Our team has successfully hand matched over 1000 founders into groups by looking at your revenue team size, strengths and goals to make sure your peer group is the right fit. In addition to matching. We provide an eight week curriculum to help you get started because those first few meetings can be awkward. If you’re ready to find your tribe, get unstuck and make real progress in your business, apply now at MicroConf from masterminds.com. Applications close September 24th. And with that, let’s dive into our first topic. 

My first topic for today is how from the outside before you understand most topics, you think they’re simpler than they really are. The biggest mistake I see a lot of developer founders make is they assume marketing is just something that you can learn in a weekend, or they assume it’s posting on Twitter or they assume it’s something I can read a book and suddenly I’m an expert in it. The thing I want you to think about is how long did it take for you to become a junior developer and a mid-level developer and a senior developer, and whatever level you’re at now, look back 2, 3, 5 years and think how much better you are today than you were a few years ago. Marketing is not the same as development, but the progression is similar. An entry level marketer with zero to, I dunno, six to 12 months of experience is comparable to an entry level software engineer with six to 12 months of experience. 

Now, think about that engineer even with AI and how dangerous they can be to your code base, how much they don’t yet understand because they don’t have the experience, they don’t know what they don’t know. That’s the same with marketing and sales, any type of motion that gets your product into the hands of your customers and gets them to buy. And this phenomenon of looking at a topic and assuming it’s simpler than it is just because you’ve never done it is called the Dunning Kruger effect. And it’s a cognitive bias where people with low knowledge or skill in a domain tend to overestimate their competence while those with higher competence are more likely to underestimate their relative ability because they know how complex it really is. I remember writing code when I was eight years old and I stopped around 13 probably when girls and sports caught my attention, but then when I took a coding class in college, I remember thinking, oh, I’m really good at this because I did it for all those years. 

I had no idea how complicated, not just writing code is, but software engineering and architecture and maintainability, scalability, security, all the things you don’t think about when you’re hacking away speaking basic to your apple. In a 700 line piece of spaghetti code, there’s a graph that’s often used to illustrate the Dunning Kruger effect. And there are a couple points on it that are named, it’s kind of funny. The first is the peak of mount stupid, and this is where early learners I was when I was 13 or maybe taking that first course in college. Early learners feel overconfident because they know a little and they feel like they know all of it. Early software engineers feel this way. Senior developers who look at marketing feel this way and maybe these days, senior marketers who look at software development feel that way because of ai, I’m not sure or know code or whatever, that they are overconfident that it’s just not that complicated. 

I mean, I do think a lot of people come into the SaaS world and they come in with this assumption of like, well, I’ve sold products before. I used to sell info products, therefore I can start a SaaS. And there’s a reason that I talk about how SaaS is one of the best business models, but it is one of the hardest company types to start because just building a SaaS and maintaining and hosting it, making it secure, making it performant, making it mostly bug free, building something that people want and are willing to pay for, all of that is five or 10 times harder than in any other sphere that I know of. And maybe that’s my own dunning Kruger effect because have I launched a consumer packaged good, a toothpaste that would go on the shelf at Target? No, I have not. But I do know that one of the mistakes I see of folks entering the SaaS space who have had success in other realms is they overestimate how easy it’s going to be. 

SaaS is just another product, right? If I used to sell eBooks and courses and I made a million dollars doing that, I mean it’s going to be easy. SaaS is subscription. Write some code, hire a developer to do some stuff and then sell that. That’s not how it works. You’re going to be at the peak of Mount stupid. And then the second step is the valley of despair where deeper learnings reveal the complexity leading to doubt. And finally, the slope of enlightenment slope that slowly goes up into the right, gradual increase in confidence as true competence builds. So the Dunning Kruger effect is fairly well known and it’s been studied and is well documented. And so marketing is complicated and it’s likely going to take you years to learn. You can’t just build something and then ask, how do I market this? Especially if you’ve never done it, it fucking drives me insane to be on X Twitter and Reddit and to see over and ing over. 

Are you kidding me? Developers posting, saying, I built this thing, now how do I market it? Or I built this thing and no one’s buying it. What do I do now? Or how do, I’m a developer, how do I learn to market? Can you just read any of the prior art on this? Read the SaaS playbook, listen to this podcast, follow arvid call, listen to things. Reuben Gomez says, follow Derek Reimer. Listen to Jason Cohen Heat and Shaw Dharmesh Shaw. There’s a lot of folks. Look at almost any Microcom speaker who’s been a founder, and they’re saying things like, yeah, this is hard. Learn how to do it or find a co-founder who knows how to do it. This is again, not something you can necessarily hire out very easily, if at all. Similar to how Derek Rimer and I talked just a few episodes ago about how hard it is to be a non-technical founder in SaaS. 

It’s also challenging to not have marketing background, but it is surmountable at TinySeed and across MicroComp and startups. For the Rest Of Us, we do see solo technical founders who can make it work, and usually they learn one marketing approach well enough to get themselves where they need to go. And that may not get them to millions in a RR, but if you’re a solo founder and you build something and maybe get a little lucky with marketing or maybe you know how to write articles and they catch in in chat GPT or in Google, then can you get to 10 k, 20 k 30 KA month? Yeah, you can, but that doesn’t necessarily mean marketing. It means that you have learned one tool on the tool belt. I have to describe my early days of learning how to market and sell software as being highly technical founder who had, what did I have? 

Seven years of professional development experience. So I was considered a senior engineer, and I didn’t know anything about marketing or sales. And slowly I learned it. I learned at one piece at a time. At first it was at content and SEO, and then it was pay-per-click ads. And then I did display ads and I learned, well, I learned copywriting in that certain point. I learned audience building. I slowly built out the tool belt, and each one of those took me at least a year to learn. And so as a developer or as someone maybe who, even if you’re not a developer or someone who was thinking about building, launching, growing a SaaS, you do need multiple skill sets. And I talked a while back about the hierarchy of skills in being successful in SaaS, and I actually don’t remember what my exact order, but coming up with it again, let’s see if I match. 

This is a test to see if I match. I think number one and two were like marketing and sales. Number three was product. Product might’ve been two actually. And then the bottom one was actually writing the code. And can be tough to hear when you’re a developer and you’re like, well, it’s SaaS. I know how to build a SaaS, but do you know what to build? Do you know what to build to get people to use it and to pay for it and to stick around that product is a skillset. Being a product manager, product owner is also skillset. Now that’s more adjacent to software development than marketing is, but each of these things are things that you will have to master. And that’s one of the reasons why launching a SaaS is hard. A lot of hard decisions with incomplete information, and you just should not assume that marketing or product are easy just because you don’t understand how complicated they are. 

And as a final note, marketing being difficult is really why I coined the stair step method, right? It’s why I came up with that whole framework also because SaaS is complicated. So it’s both of those things. SaaS being is technically complicated and the marketing is complicated. It’s the worst of both worlds. That’s why it’s hard. That’s why it’s so valuable, because it’s hard to do. And if you stair step your way up by being in an app ecosystem and we list 70 something of those, just go to Google and type in MicroConf SaaS, app ecosystems, SaaS app marketplaces, it’ll get you there. It’s the first result and we have 70 something of them. And what that does for you is if you can get it to one marketing channel where you’re just in the app store and you’re getting your flow from there. So maybe it’s the iOS app store, maybe it’s Shopify, maybe it’s Heroku. 

You can for now just learn all the other stuff around SaaS and you don’t have to build a standalone SaaS app. You can write a much simpler add-on or extension of an ecosystem so you don’t have to start from scratch and do all the complicated scaly security. All the things of building an app from scratch, a standalone SaaS app and marketing it as standalone, you’re doing it on hard mode and I’ve done it. People do it. A lot of tiny companies do wind up doing it, but if you’ve never done it and you really don’t have much experience with it, it’s definitely an uphill battle. My second topic is a quote, and this is a bit of a, it’s a straw man. No one has actually said this quote, but I see this sentiment online. Maybe it’s indie hackers or developers who want to build stuff but don’t want to market it. 

And this quote is, even if marketing is hard, isn’t it just convincing someone to buy the stuff that I’ve built? I’m going to build a thing and then just convince people to buy it? No, no, it’s not. And you’re starting backwards if you’re going to do that, especially if you’re doing SaaS. Here’s the thing, if I was going to launch a toothpaste brand, well, right now it’s a commodity, and so I’m going to build a brand around toothpaste or if I’m going to start a gin brand or mezcal, I’m going to go to some famous person because that’s what seems to work these days. But you’re going to build a brand around that because with those products, these consumer packaged goods, it’s really about making people talk about it. It’s about pitching it to the bars and then it’s about getting on the shelves. And those things are hard, but we know that people are going to use toothpaste and consume gin and mezcal. 

If you go off and build a SaaS tool that is a new thing that you had an idea about that connects these two things into, you don’t know if anyone needs that. You don’t know if anyone wants it. And even if they do, you don’t know if anyone will pay for it. Good marketing will just make a bad product fail faster. And that’s a bastardization of a quote that I believe is either from Ogilvy or from Eugene Schwartz who are two advertising folks there, kind of the Mad men of 1950s and sixties. Good marketing will only make a bad product fail faster and bad product doesn’t necessarily mean the quality is bad. It might just mean it’s a product that no one cares about and no one wants. Especially with SaaS, you can have an audience and market really well and get a lot of people using your product, and if you haven’t solved a desperate pain point and you do not have product-market fit, they will bleed out and churn will kill your product and you will plateau very early. 

This is exactly what happened with Drip in the early days when all Drip was an email capture widget and a email sequence, and that’s all it did. And we were trying to charge $50 a month for it, and people were like, I can cobble this together with other tools, and we plateaued, and I put all my marketing energy behind it, hit the audience, hit the Facebook ads, hit all the places, and got it up to, it was about eight grand a month of MRR, which hey, that’s not bad. But then it plateaued and churn was very high. It was 12 to 15%, and we just sat there because we hadn’t built something people want, and my good marketing had just made a bad product fail faster, plateau faster. To me, that was a failure. I did not want to build another product to eight KA month. 

I wanted this to be a hundred K, 200 KA month at lease product. I still want it to be a lifestyle business. At that point, I was not even thinking about growing it and that it had the potential to do what it did, but realize that marketing a product no one wants isn’t helpful. And trying to add marketing as an afterthought is like trying to add virality as an afterthought. It doesn’t work. Now, the confusion comes about because with consumer packaged goods that can work with e-com stores that can work. You can be drop shipping, funky lamps, and you can run ads on Facebook or meta whatever, and you can make money that way. You can put ’em on Amazon. There’s the Amazon FBA fulfillment Amazon crowd where you can just figure that out. It’s just marketing a thing that already exists with info products. 

It is, right? As long as you pick a topic, maybe you have an audience, ideally you have an audience, but maybe you don’t and maybe you write a book about how to do X, how to become a dental technician or how to make money online, God forbid, please don’t do that. Well, then you can just sprinkle marketing on and be like, I’m going to try make people find this. So I’m going to go into Amazon, I’m going to set up a website, I’m going to put it on Gumroad. I’m going to do SEO, I’m going to try to get people to find this thing. And if they buy it, that’s all there is. But with SaaS, that’s not the way it is because people can churn, they can cancel, and people don’t stay with tools. They don’t keep paying for tools that they’re not using. 

And with info products, a huge percentage, let’s say 80 plus percent of folks who buy your info product, they never use it and it doesn’t matter and you never hear about it. Now that sucks, but it’s the reality. If someone’s not using your SaaS, they cancel. And that’s why so many people, these founders, these aspiring founders, the indie hackers, the folks who are trying to just build what they want, scratch their own itch, not do validation, not think at all about marketing until every line of code is written. That’s why they’re wasting their time and they’re not having success with SaaS. You have to build something people want and are willing to pay for. You can’t just promise a result. I’ve seen some info products courses that are 99% marketing and 1% product, and it just doesn’t work with SaaS. So in conclusion, marketing in SaaS is not just convincing someone to buy the stuff that you’ve built. 

You have to start with the marketing. You have to start and think about which channels might work. Have you heard of the 2 2200 idea validation framework, the 5:00 PM framework? There’s a reason I’ve developed those. It’s not to hear myself talk. It’s not so that I sound smart. It’s because those are the ways to maximize your chance of success. Now doesn’t mean that a hundred percent of the time you use them, you’ll be successful. No, absolutely not. Does it mean that there are no other ways to do it and be successful? No, it doesn’t. But I’ve baked into those two frameworks, the best practices and the most likely success scenarios for the vast majority of founders. And if instead of wanting to look at the SEO potential, the number of people who are searching for something, instead of trying to gauge some demand, instead of trying to see how you can enter an existing category and maybe tweak it and pick a position to where you are the leader or figuring out where the demand is, how many people want this actually doing some work that this sounds boring, doesn’t it? 

It sounds boring, it sounds grindy. And guess what? When you don’t do that, you just build a bunch of stuff and you build 10 tools and you launch ’em to crickets, and then you wonder why you don’t have success with it, and maybe you get lucky on one of them, and that can almost be worse for you because then you feel like you’re doing the right thing or then you feel like you’re good at this. But no, you’re not. You haven’t learned anything because you didn’t follow any of these things through to fruition. You just kind of threw a bunch of dice against a wall and one of them came up as a six. Let’s consider that success in this case. So we have six side to die, throw 10 of ’em against a wall. All of ’em are one through fives, one is a six, and now you’re like, oh, see how good I am? 

It’s like, are you good or are you lucky? And when you’re lucky, you just don’t learn very much. So the next time you throw those 10 dice against the wall, which let’s be honest, how many months or years of your time is it to get 10 more at bats? And if each time you’re not progressing from the time before, that’s a real travesty. And so I guess to state it even a different way, I know the validation is not foolproof, but validation. The validation is to do some research upfront and to think about marketing before you build that product rather than just cracking open an editor and starting to code and figuring, I’ll figure all this out later because then there you’re on Twitter saying, Hey, I’m not good at marketing. Can someone help me with that? And it’s like I couldn’t step in. I’m pretty good at marketing. I’m not the best, but I’m decent. I couldn’t step in and save a product that no one wants. It takes forethought to not waste your time. 

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And you know what? Inevitably do whatever fits your style because there are no right answers. There’s no one right answer that is a dangerous and catastrophic conclusion to draw. So again, that statement on its own, there’s no one right answer for how to grow your company. That’s true. But I tell you what, let’s say there are a thousand possible paths to grow your company. There’s probably five or 10 that are really, really good. Maybe even less than that. There’s probably three that are optimal, and there’s probably another five to seven that’ll do an okay job. And then there’s probably 990 that will get you nowhere. And you can see this pretty plainly by going on social media and seeing how many people are failing all the time and they’re failing in different ways. There’s a lot of ways to fail. There are only a few ways to succeed, and there are even fewer ways to say catch lightning in a bottle. 

So to have great success, to have that Cinderella story where things grow very quickly. And so why is it important to understand the subtlety of this? Because I don’t want you, dear listener of startups For the Rest Of Us to be under the illusion that A, since there’s no right answer, I can just do whatever I want and whatever fits my style. The whole thing about validation, yeah, talking to customers and thinking about demand and I dunno, seeing one idea through to fruition, even though Rob and Jason Cohen and Laura Rotor Heat and Shaw, Ruben Gomez, other successful founders, even though they say that’s pretty much the way to do it, there is probably 98% of the time that’s the right way to do it. And throwing a bunch of things at the wall and seeing what sticks is pretty catastrophic and you don’t learn from it and it’s just unlikely to actually bring success even though they say that that just doesn’t fit my style, that doesn’t fit my style of the way I want to work. 

I think you’re doing yourself a disservice if you believe that and if you invest your time in that, because each of us not only has so many minutes on this earth, but we all have opportunity cost. It’s not just about the time. It’s about what else could you be doing with that time? Could you be spending it with your significant other, your good friends, your kids? Could you be walking the wall around Dubrovnik and gazing out at the Adriatic scene having an amazing time instead of hacking away on your ninth idea that you’re going to throw at the wall? Because you don’t want to shift your own mindset in how these companies can be successful. It’s interesting, I’m in a few private founder groups that go way back. I mean a handful of them. And I will sometimes see a founder struggling with a decision and they will ask for feedback about, Hey, should I do this or that, or is there another option? 

And oftentimes there is a general consensus. It’s not everyone saying the same thing, but I’ll see, frankly, the more successful founders generally agree on, you should probably go with A, and if you go with B, here’s the pers and cons, blah, blah, blah. It’s not that everyone thinks the same way. It’s not that all successful founders got there through the same path, but the more you do this and the more you pattern match it to success and failure, the more you do get a sense of things that generally work, it becomes that gut instinct. And there are outliers with this. I mean, I’ll be honest, Jason Cohen, for example, will come in, he’s not in these groups, but I’ll hear him weigh in on the topic and be like, oh, that was actually a pretty unique and insightful take. He has a very unique perspective having now grown. 

I think it’s three companies and sold two for cash. Two are unicorns, two are north of a billion. Yeah, he’s next level and he’s the one that’ll seek up with really unique insights and questions. But generally, a lot of us who have found success will kind of agree on this is the right direction for you to head. And then of course it’s up to that founder who asked it take that advice or not. But what you don’t see is someone ask for advice, and if there’s 10 successful people, there be 10 different completely different answers because there’s no one right way to grow your company. You won’t see that. You will see, again, a general consensus of a direction that’s usually like, yeah, if we have a hundred or a thousand ways to do it, there’s probably three that they generally agree on. Maybe two, and this is an added sentiment I think of be careful who you listen to online. 

There are some folks who have never had successes, but for some reason, some folks think that they have. There are some folks who’ve had one success, and if you look at ’em, they had 10 years of starting no success, starting failure, no success, no success, no success, and then eventually we’re successful. And oftentimes that is either because they got pretty damn lucky and they couldn’t do it again or because eventually they built up such a network and audience that it did kickstart those early days, and they finally still did get a little lucky and hit a gap of a thing that was growing at the right time. Now, I’m not taking luck away from anyone, and I think if you can manufacture luck, manufacture your own luck, but then be careful about listening to that person, unless you also are going to get lucky, then you’re not going to have the success that they do. 

I like to control the things I can, which are the hard work and the skill part of success. So I tend to follow people who have seen work hard and build up their skills and have generally good intuitions about how to do something, start a company for example, and how to do it successfully, and then how to do it again, and then maybe a third time as well. But you got to look at people’s track record when you’re listening to their advice. Just because they’ve been around a long time, or just because they have written a book or just because they put a lot of things out on the internet does not necessarily mean they know what they’re talking about. And I see this sad part is we didn’t used to have this a lot in SaaS. It was more in the info product affiliate space where there’s just a lot of sleazy stuff going on and people exaggerating making up numbers saying their net worth is more than it is saying they’ve sold more than they making a fake scarcity. 

There’s all kinds of stuff that used to happen that has crept into a lot into the indie hacker space, tiny bit into the SaaS space. But yes, there are a hundred percent people that are over, I would say, inflating their accomplishments or people who don’t even address it, they don’t overinflate, but for some reason, folks are listening to them. And that’s where I want to advise you once again, to be pretty careful. Be really careful who listen to it. Just because someone has 50,000 YouTube subscribers or a hundred thousand or 150,000 followers on X Twitter, it does not mean that they know what they’re talking about. Especially if you want to do something specific like, Hey, I want to build a SaaS company, bootstrap it, or mostly bootstrap it to one to 5 million, and I want to sell it for between 10 and $50 million. There are a lot of folks online who will say things that will not help you in that goal. 

It will seem like maybe they’re adjacent and they’re kind of a indie hacker founder person who, oh, I should, this kind of makes sense and that sounds easy. Problem is they’re feeding you ice cream. You probably need spinach, and I get that doing 2 2200 and doing validation and grinding away on SEO and marketing and learning to do that is spinach and lifting weights, right? That’s what it is. It’s the hard things. It’s not the ice cream. I would be so much more popular if I just told people, you should do B2C two-sided marketplaces. My following would be 10 times the amount, especially if I got outraged when people question that or if I just said, it’s just all luck. Just go and build and ship. Oh man, do you realize how many more followers I would have and how I could not live with myself? 

How I would not be able to sleep at night because of that? Because I would be doing, I think such a disservice to folks like yourself who are listening to this. Alright, that was a longer rate that I admitted to be. But the end cap of that is be mindful of who you are listening to and be aware that often when faced with a decision within your company, often within your personal life, within trying to grow and build an incredible business, oftentimes it’s the more difficult path. The path that has a bigger headwind and more resistance within yourself. That’s often the path that you should go rather than shy away from it. Thanks for joining me for this solo episode of Startups For the Rest Of Us. It’s been great having you here today. I love chatting with you each week. It’s been the highlight of my week since March of 2010. I laugh because that’s a long time. It’s always fun covering these topics and if you keep listening, I’ll keep recording. This is Rob Walling, signing off for episode 796. 

Rob Walling :
Welcome back to a special Thursday episode of Startups For the Rest Of Us where we continue on with TinySeed Tails season five as we follow Harris Kenny on his journey to grow outbound sync. We’ve had a great response to these episodes from founders and TinySeed investors alike. If you’re interested in diversifying your portfolio and investing in ambitious early stage B2B SaaS companies, we’re currently raising fund three for TinySeed. We recently returned more than 100% of our first TinySeed fund and frankly, we’re just getting started. If you’re interested in joining us, check out our thesis at TinySeed dot com slash invest, and if you fill out the form there, it goes directly to my co-founder a r. You can also reach out to a R directly at E-I-N-A-R at TinySeed dot com. Let’s dive in.  

Harris Kenny:
It is weird. I do wonder like, oh, is this the best idea I’m ever going to have? Maybe mean, hopefully not, but maybe this could be a really big thing. I mean, we were having calls now with pretty big companies and I do know that there’s features in Trello that if I shipped them right now, I would turn them into revenue immediately.  

Rob Walling :
Welcome back to TinySeed Tales, a series where I follow a founder through the rollercoaster of building their startup. I’m your host, Rob Walling, a serial entrepreneur and co-founder of TinySeed, the Startup accelerator for ambitious SaaS Bootstrappers. Here in season five, I’ve been talking with Harris Kenny, founder of Outbound Sync. Last time I spoke with Harris, he had just closed his biggest contract to date. Now he’s hit another impressive milestone.  

Harris Kenny:
Hey Rob, quick clip for the pod 20 K. Let’s fucking go. I dunno, I’m still sinking in, but really, really feeling a little overwhelmed. And also, what’s the next thing about hitting 20 KMRR? So yeah, hit it. Head of schedule. Had been hoping to hit this in May. That had been kind of the end of our TinySeed year, but it’s today’s February 20th, so hit it ahead of schedule and I’ve had a sheet of paper that says 20,000 sitting over my desk for, actually, I don’t remember when I put it up, but for a while. So I get to take it down and I put up the next one. Next goal is 30 k. Going to celebrate, going to get dinner with my wife just to hit the milestone. I never really celebrated getting into TinySeed. It always felt like the beginning of the next thing didn’t quite feel like a full accomplishment on its own, but I’m going to celebrate this one for sure.  

Rob Walling :
You sound excited. You should be. It’s a big fucking deal, man.  

Harris Kenny:
It was really gratifying. I mean it was so funny. Of course at the very end, I’m stuck at 19 nine for a week. Of course. It was so funny. And then finally it popped and it was like, oh yeah, totally. I mean, it is not the end, but it definitely, it was the first major, major revenue milestone and I think because it was externally validated of, yeah, this is a new, I mean the TinySeed is vested in whatever, like a hundred or two, I don’t know how many companies at this point. So it was a helpful thing of that’s a real number I should focus on. And so that was a really helpful thing for me to a really simple, really clear goal. Right? Remember so many other things going on that it’s noisy sometimes.  

Rob Walling :
Yeah. Did you celebrate?  

Harris Kenny:
Not yet.  

Rob Walling :
Okay.  

Harris Kenny:
Although I had already been getting dinner with my wife and we brought our 1-year-old. Our older kid was older, daughter was with grandma, and so my instinct was like, oh, well let’s just call this dinner that we’re already having anyway. Let’s just call this the celebration dinner, which is not the best. It’s kind of a cop out. It’s like, what’s wrong with you? Why can’t you just be happy about this and be a normal person and be like, you did it. It’s great. Go do something. Get something for yourself or do something. So that’s a thing I think I need to look in and work on. But anyway, but I was like, okay, so I’m not going to do that. That was my instinct and then I pulled back from it. So we are going to make a plan and do it and do a dinner and just get a chance to reflect on getting here because it kind of reflects, I’m not fully done. 30 is we’re profitable on the planes in the air, but 20 is big and I want to do something for it.  

Rob Walling :
You hit 20 K and then within days, you sent me this in Slack quote, I’m quoting you. Overall things are good, but I’ve also felt very anxious since hitting 20 K. Like I’m close, but not there yet. Runway’s still an issue. If I fail now, it would be excruciating. So I’m having to up prices and sell better and make harder product calls I want to play to win and not play to not lose. I really don’t want to go raise more money and I’m up against the wall in terms of personal expenses with me being the number one drain in the business due to having two young children, this is what I call the arrival fallacy or not, I call it. It just is what’s generally called. It’s like, dude, did you even celebrate for a day for 24 hours? No. You started worrying about it and it’s good. There’s a balance here. If you don’t ever worry about it, then you don’t get there. Part of the stress that Yerkes Dotson curve is that you have enough stress to make you perform at a high level and then too much stress. Eventually you collapse, you implode, right? So runway is still an issue and I can imagine that, but this is why I was asking, did you take enough time to at least say, man, 20 KI made it.  

Harris Kenny:
Yeah, I mean, no, definitely not.  

Rob Walling :
And as you think about this, if I fail now, it would be excruciating. I would agree with that. I don’t see that happening at the way you’ve, based on the way you’ve been executing so far, but 30 K feels within. It doesn’t feel easy, but it feels simple. It’s a straight path. So we get some companies to come into TinySeed where I see a straight path to some number. I think you get to be 10 KRR or I think this can even be a hundred KMRR business, but you’re not going to make it past that because of market size or some other thing. And then we talk about how are you going to actually get there? You’re going to have to pivot. You’re going to have to change strategy. You’re going to have to add more integrations. You’re going to have to do whatever you for you. I don’t see that there’s no limit right now. And so 30 K feels pretty much blocking and tackling, showing up every day and doing the same thing you’ve been doing for the past six to 12 months. That’s how I see it. How do you see it?  

Harris Kenny:
No, I think that’s right. Chat. BT thinks I’ll get there in June if I did a little CAGR thing for me. Great. Yeah, no, I think that’s right. I think that we have the right combination. I mean, there’s two decisions that I made probably six months ago around starting Salesforce and then probably three months ago around starting building for other platforms besides or in addition to Smart Lead. And I think those two decisions back then are why we are where we are now. I think if I hadn’t made those decisions now, I think I’d be in a very different position because we’re seeing, especially on the sequencer side, we’re seeing customers who had been using Smart Lead are now asking us, oh, we’re actually going to move everything over to instantly, or for all new clients, we’re going to move them over to this new platform. 

And had I not started building that back in December, I would’ve lost that revenue. We totally would’ve, I think, plateaued over the course of January, February and potentially would’ve had been down. So I think because of those decisions, I do agree. I do think now with this set of options, we’ve got enough options that we can kind of flex between that we support in terms of the integration sets on either side of where we sit, that I do think we can get to 30 K because of that. I do agree. I think it’s just getting these features out, notifying customers that they’re out posting about it on LinkedIn and YouTube and doing a little bit of co-marketing with the platforms too to help get in front of their customers.  

Rob Walling :
How much are you burning each month right  

Harris Kenny:
Now? I mean it’s around 30, right?  

Rob Walling :
30, 30 K per month that you’re  

Harris Kenny:
Reporting or spending 20, sorry, we’re negative 10 now,  

Rob Walling :
Basically.  

Harris Kenny:
Okay. So as we increment up, I am slowly extending that runway.  

Rob Walling :
How long is your runway right now?  

Harris Kenny:
Right now I would say it’s probably six months now. And that’s assuming no prepaid. Most, almost all of our customers are month to month right now, so that’s assuming no prepaid, although I do have one annual that’s supposed to come in at some point. It’s like a net 45, so I kind of forgot about it, but yeah, so six months at that rate, it could go around 60 k the bank right now, and there are levers I could pull with my own personal finances if I had to before having to go out and do a raise money conversation or whatever. So right now I’m trying to increment up on prices, figure out the things that we have to do to get Salesforce, new Salesforce customers because asking for very specific things and then I’m having to sell better. I get on a call and I say, oh, it’s 800 bucks a month now. 

Whereas the first couple of Salesforce seats I sold, I did for one 50, which I knew was low, but it was just like, I’ve got to get some revenue on this. I’ve just been spending engineering months on it. I need somebody to use it. So that was a calculated, maybe bad but calculated choice, but now I have to follow up and I’m using a digital sales room and I’m like, Hey, you talked about these two things being important. Are those still important to you? I’m having to sell and not just sort of pay a blab for 30 minutes on a demo and be like, do you want to pay or not? So it’s challenging a little bit. I mean it’s not that complicated, but it’s definitely, it’s harder. Increasing prices is not as easy as just increasing prices.  

Rob Walling :
That’s right. It’s a bigger lift to change the sales process.  

Harris Kenny:
Expectations change. Yeah, exactly.  

Rob Walling :
You said, I really don’t want to go raise more money and I don’t have a strong opinion, to be honest. If you were to come to me and say, I really want to raise more money, I’d be like, great, you’re going so fast and you’re in such a big space, you can do it. And I don’t think it’ll be that hard, but if you come to me and say, I really don’t want to raise money, and if you came and said that and you were about to run out of money, I’d be like, well, this is not smart. You’re making a bad decision, but you’re on the cusp there where you have six months and I think you’re going to make it. So either way you do it, it’s your choice. I’m willing to give you advice on it obviously, but I don’t have that strong, oh, 98% of the time I would do this or that in this situation. But I am curious to hear you say, I really don’t want to go raise more money. Why?  

Harris Kenny:
Yeah. I feel like when we get to 30 K, I actually would be open to having the conversation then from a position of strength of like, look, we got to this point. I did it. I mean it’s been in April, 2019, I went out on my own as I started my first company, April Fools Day accidentally on May 1st, 2019 was my first day fully on my own. About a year later I discovered stars For the Rest Of Us and I would walk around a park by our house with our then 1-year-old and I would listen to the pod. But anyway, so I’m coming up on six years since I went out on my own and I feel like we get to profitable. I will have done it. I will be a non-technical founder of a software company in 2025. I will have the schedule flexibility to spend time with my kids. 

We have our house. We live very fortunate to live in a good part of Denver. I will have, it’ll be the end of the beginning in my mind. And I think if I can get there and then I can be more strategic about like, okay, we’re going to raise money to go solve this problem or to do this faster, that feels like a very different position than we’re going to raise money because I have to get to this point. Maybe at this point there would be somebody who’d be willing to write the kind of check that TinySeed wrote for us a year ago, but there’s just not that many people out there like that. And I am watching other companies in our space in the outbound space raise that kind of money, and I’m watching how it’s affecting how they make decisions, and to me, it just feels like it would be a distraction, and I don’t think I need to do it. 

I think I just need to stay disciplined and just focus on the most important thing to do to today, this week, this month. I think if I do that, I don’t need money to do that. So that’s just kind of where my head’s at. I think it’s possible if we get there, it’s the end of the beginning. I have this company now, and then maybe from that vantage point I look out and I say, Ooh, this is kind of cool. What if we raise money to go tackle this or whatever, but I don’t know what that is yet.  

Rob Walling :
So of all, you kind of have some objections to raising money that you listed, and of all of them, the only one that I agree with is that it would be a distraction. It always is. Everything else you said, I don’t actually think is true. If you want to know the truth,  

Harris Kenny:
I do. I don’t know what I’m doing. That’s the only thing I know for sure.  

Rob Walling :
Totally. No, but you said, will I be able to find many investors that would write a check and not? I think what you’re implying is and not expect me to raise a series A in 18 months, the non venture track. And the answer is yes, you can absolutely find them and you would, you’d be able to raise this the way you’re growing and the space you’re in, you would be able to raise money. I’m not saying it’d be 48 hours to closing the deal, but you mentioned getting to profitability and feeling. I think it would be calm in your soul and then you’d be able to set sites on the next thing. Investors at this stage, you don’t need to be profitable. You’re not burning 50 KA month. You’re burning 10 KA month with six months runway. You’re in fine shape. So every objection that you have, I just want to, and again, I don’t care if you raise money or not. 

I’m not trying to convince you either way, but what I do want you to have are the facts, or at least how I view the reality of the situation. I don’t want you to have objections against something that may not be true, and those are the reasons you’re not doing it. So that’s the only reason I call it out. Someone might be listening to this thinking the same thing. And so if money really is the number one stressor in your life right now, you get to think about it of like, Hey, if I had a couple hundred grand, 2 50, 400 K in the bank, not in your personal account obviously, but in the business account, how would that change it?  

Harris Kenny:
It is weird. I do wonder, oh, is this the best idea I’m ever going to have? Maybe, I mean, hopefully not, but maybe this could be a really big thing. I mean, we are having calls now with pretty big companies, and I do know that there’s features in Trello that if I shipped them right now, I would turn them into revenue immediately. I literally have people being like, Hey, just tell me when it’s ready. There’s a version of me that, or there’s a version of this company where I see that more clearly than I’m seeing it right now, and I’m not just so focused on my current month, American Express Bill or whatever.  

Rob Walling :
In our last episode, Harris had done most of the prep work for SOC two and was entering the observation period. I wanted to follow up to see how that process was playing out.  

Harris Kenny:
I don’t give myself a ton of credit, but I think there’s a couple of big things that I got, and they’re all connected, which is that I felt like this scaled outbound kind of growth hacking approach was going to go mainstream. And if that was true, then I would have to make a few decisions. Salesforce integration and SOC two being I think the two big ones, and I do think that is true, bigger and bigger and bigger companies with more and more budget are adopting these tools or hiring agencies. And so SOC two is part of that, and I think we talked about it briefly last time, but I think it’s totally made our company better, our product better. We’re handling security issues better, and I’m really proud of that and it’ll be great to have the report and be able to put it out there, but on the sequencer side, none of the tools that we integrate with have it. 

So it’s really unique for us to get that. We’re going to start getting pulled into more procurement now, and I know that their sales team is going to be up on a call and they’re going to talk to some enterprise buyer and they’re going to be like, well, we don’t have SOC two, but if you’re using outbound sync, outbound sync is the thing that connects to your system and they have it. And so I think they’re going to start pulling us in more than they do right now. They’re being friendly and they’ve sent some stuff our way, which I’m grateful for, but I think it’s going to become more of, it’ll be in their internal wiki or Slack or whatever of Yo bring Harrison to sit on a demo so we can close this deal, I think, because otherwise they’re going to say, no, we’re not going to give you right access to our system.  

Rob Walling :
Can you tell the listeners or explain to them who this, you said they are going to bring us in? Who is they?  

Harris Kenny:
Oh, sure, sorry. Yeah, so the sales engagement platforms that we integrate with, so that would be right now smart lead instantly email, bison and SaaS mail. So since the last time we talked, those three other tools are all new  

Rob Walling :
And none of them are SOC two, but if your SOC two somehow that  

Harris Kenny:
Helps. Yeah, I think that these mid-market, so we’ve closed a couple of mid-market deals since we last talked. Like sendo is one, which is pretty cool because they’re early adopters of tools. And so if you look and see their testimonials on some of the different outbound sites, I think it’s a really good indicator that they signed up for us. They tend to pick winners. I feel like they have a really strong culture in their Go market org is like, anyway. So to me, I was like, oh, cool, we’re kind of in this club now where their team was like, yeah, we need this. But you get in this procurement process, they see a demo, they’ll look at instantly or Smart Lead and they say, yeah, this looks great. We’re landing in spam with our current approach, using our primary domain and using whatever tool we’re using, but in the next call, I’m going to bring in our Salesforce admin and they’re going to have questions, and that person is the one that kills the deal for the sequencer company. 

And so I think that’s that point where the sequencer company would say, Hey, actually, app on Sync solves this problem. Here’s a trust center if we want, you can have Harrison on a call and he can explain how we can follow your data governance requirements basically. And so it’ll become, I think, an ace in the hole for them to get those deals across the board when they’re selling direct. I’m a big, big, big believer in the value of agencies, but if this keeps mainstreaming, I think it is. I also think that some of these teams are going to buy direct from the platforms and not just ask an agency to run it for ’em, but we’re also watching our agencies move up market and they’ve told me that they’re now putting outbound sync in their decks, and I’m watching them onboard bigger and bigger companies than they were 12 months ago, and now they’re consistently saying, we got another one and we need outbound sync. And so we’re helping them move up market, which is pretty awesome.  

Rob Walling :
A lot of the stuff you describe of how you’re growing and the success you’re having might sound to someone like you happen to be at the right place at the right time. There’s a lot of right place at the right time with you. That’s not an accident and that’s not luck. There’s a little bit of luck involved in all of this, let’s be real. But I think that you have made pretty strategic bets on where the puck was going and is a chance it wouldn’t go there. But it seems like a lot of the stuff that you do, the bets you make, if they work out, they have pretty significant asymmetric upside. Would you agree with that?  

Harris Kenny:
Yeah, definitely. Best one, 2013 married my wife. That’s worked out really well. Yeah, so I’m a gambling man. No, I agree. I think that I’ve definitely, it’s funny because I’m actually, I’m not a risky person. I like being on my feet. I don’t like extreme sports. I don’t like mountain biking and things like that, but there’s certain things where I think I say to myself, you got to go for it. And so I’ve made some big bets with this company and in other parts of my life over the years where in general, I’m a pretty steady ed, not a thrill seeker, but there’s certain things where it’s like, dude, you either put chips in or just get away from the table. And this has definitely been one of those running. That agency I think gave me some insight into for three and a half years before this, I think gave me insight a little bit into what was going on. For sure.  

Rob Walling :
Another bet that Harris made was building an integration for the HubSpot app marketplace. This took a bunch of engineering time and effort, and I was wondering if it had paid off over the last few months.  

Harris Kenny:
It’s different, and so the discoverability is much lower, but I think that what it’s helped with, we’ve had a couple of people that just randomly stumble upon it and download it. I think it’s just more helped with credibility and getting through the process than anything else, because when we weren’t in it and we would go to install it, it would give this warning of this is a random app, and that goes away and that came up and people would mention it. And so I think it’s helped with that. It’s helped with SEO, so I am glad we did it. We were essentially an unlisted app for a year before we did it, and we’re going to end up doing the same thing with, although I’m starting to talk to their team now about getting into their app partner program and being an app exchange, official app exchange partner for Salesforce, which was, I think when we first talked about it, you’re like, doesn’t this take a year? 

I was sort of misunderstanding. You can be an unlisted app, whatever you want, but to be, it does take a year to be a real, they do a security review and stuff. So yeah, I think worth it, but only after we had super validated that HubSpot users had this problem in and of itself, it is not driving demand, but I think that with Salesforce, it will be different. I think when we become a Salesforce app exchange partner, I think it will mean it move the needle more for us just based on how I’m seeing it.  

Rob Walling :
Tell me about your Salesforce integration right now. You’re an unlisted app, 

And you were telling me offline that in fact, you built this integration, which I’m sure was not easy to build. I’ve seen the Salesforce API back in the day with Drip. We were going to integrate with them, and I was like, oh, no, there are things you cannot unsee. We looked at their Derek and I looked at their docs and we’re like, ah, no. So I don’t think it was the easiest thing to build. And in fact, you had asked some folks, should I build this? And they were like, no, we wouldn’t use it, or something like that. Can you tell that story of how it was completely not validated and you built it anyway, and then I want to hear was it worth it?  

Harris Kenny:
Yeah, I think that might be the highest risk engineering time I’ve spent since starting this was on Salesforce. So I went into the smart lead Slack community, which is super active, and I think at least once, but maybe twice, I asked, Hey, we’re working on Salesforce. We’re the people who made the HubSpot integration, now we’re going to Salesforce, who’s interested? And literally nobody responded, not even a reaction emoji of a rocket ship or whatever, which you, these communities, it’s like a lot of rah rah stuff. It was just nothing. It’s total lead balloon. And part of me was like, okay, literally nothing. And I asked around, and at the time, a lot of our agencies were like, oh, well, a lot of our clients aren’t using Salesforce, so I don’t know if we would need it yet. But I think this goes back to my one core thesis of this scaled outbound movement would growth hacking movement would go mainstream, and if that was true, what else would be true? 

And this fits into with that one idea, which is like, well, that means bigger companies with Salesforce will also want it. And we had one example of a prospect who was like that, and then what really clinched it for me was when we got a support ticket of a screenshot of Salesforce, and I was like, what the heck? Literally, how is our data in a Salesforce account? And they were like, oh, well, we’re actually using HubSpot’s data sync to get it in there. And a couple of other users validated that of like, oh, yeah, that’s the only reason why we bought the HubSpot integration is because we want it in Salesforce. And I was like, oh, but I didn’t know that. And so then it was like, okay, okay, okay, this is hidden masked demand. They’re  

Rob Walling :
Hacking your tool demand to a result that you could get. Oh,  

Harris Kenny:
Man. Yeah. So it’s like, oh, there is demand, actually. So then we decided to start building it, and it was definitely harder than I thought it would be. It took more time, and even as we rolled it out, I’m like, cool, we have it. We log emails to the email object, and then people are like, well, why do you log emails as emails? We want you to log the emails as tasks. And I’m like, why would I do that? And then I learned how the data model works and oh, actually tasks are really useful. So it’s like, okay, great. Now we have emails as tasks, and then they’re like, oh, well, that’s great, but whatever. So that’s why I say when we throw engineering hours at this, I know that there’s revenue there because I have literally prospects who are, as soon as you support the lead object, we will sign up, but right now we have to use accounts and contacts or whatever. 

And so we’re slowly expanding our footprint in Salesforce. I still consider it a beta. I don’t consider it fully feature complete, but I think that in a month or two, we will cover the overwhelming majority of stuff that comes up in that first call. And now I feel like I’m wearing an account executive hat. Again, going back to, I mean, literally 12 years ago when I did that, and I have qualification questions where I’m like, okay, do you do this, this or that, do this or that? And then at the end I’m like, okay, I know what implementation is going to look like. So that feels more enterprisey as well.  

Rob Walling :
Any idea when folks will start paying you to use your Salesforce integration, or is that already happening?  

Harris Kenny:
Already happening?  

Rob Walling :
It is. Okay. It’s in now, but they’re paying for it.  

Harris Kenny:
Yeah. Yeah, already happening. We had our first one, I think in December, so this is February now, and then January, February. And I mean, honestly, this is kind of weird, but I’m actually kind of enjoying building for it because it does so many things, and I think what they’re doing with Agent Force is really interesting. We play on the data context layer, and so once that’s in the crm, there’s actually a lot of stuff you can do with the outbound sync data for automation and AI stuff. And so I like what they’re doing with ai. So yeah, we have PIN customers. Santoso was another one of those. And I think I’m increasing prices now as we’re doing more, and I feel more confident on the call and I’m like, we can do this or this. I know that took time, so I’m going to make you please pay me for it. Whereas before, it was kind of like, I don’t even know if this thing is going to fully work, so if you want to take a flyer on me, we can see what happens. But now it’s like, yeah, yeah, yeah, let’s do it.  

Rob Walling :
So between now and the next time we talk, which probably be a couple months, has been our usual cadence. What are you most excited about in the business?  

Harris Kenny:
I’ve been pushing really hard on getting instantly in SaaS mail and email by Send and Salesforce, and I really just want to get them full feature parody. A lot of explaining like, oh, we don’t do that yet, but it’s coming soon. I feel like that will be, and I think we’ll also get to 30 K around that time, and that’ll feel like V, one of this is a company, it’s a legit software company that’s profitable that has a handful of really legit integrations. So I’m excited to not have to be talking in circles around like, yes, we support instantly in Salesforce, but we have one feature that’s not there yet. That’s just kind of annoying. And I know it’s annoying for our CSM too. He’s fine. It’s fine. He’s doing great. But so that, I’m excited to just be really, really objectively looking forward to that. I’m excited about MicroConf in a couple of weeks. That’ll be really fun to meet up with our cohort. So myopically focused on getting to 30 K right now. Somebody asked me like, what’s next after that? And I’m like, I honestly have no idea.  

Rob Walling :
That’s the next peak. I can’t even see beyond that.  

Harris Kenny:
Exactly.  

Rob Walling :
I got to get there and then look.  

Harris Kenny:
Yeah, exactly. So I’m just so tunnel visioned on that, and I don’t know if it’s good or bad, but I literally can’t think about, I mean, I have broad idea, but  

Rob Walling :
Well, I’ll tell you what it is. It’s 41 6 6 7, which is half 1,000,500 K, or that’s, I’ve been down this road. I know exactly. First it’s 40 K and then it’s 41 6, 6 7, and then it’s 50 K. I mean, it’s pretty easy. But the question is, do the current integrations and the current way you’re executing, does that allow you to get there? Do you have to make adjustments? Harris seems to be on a tear with a trajectory that just keeps going up, but with all that growth, hurdles are bound to show up. Will his bet on SOC two and marketplaces payoff and will he need to raise an additional round to keep up with growth? We’ll talk about that and more next time on TinySeed Tails. I hope you enjoyed this episode. If you’ve ever wondered what it’s really like inside TinySeed and want to hear a raw, candid coaching conversation between Harris and I, we’ve put together something special for you at TinySeed dot com slash bonus, you should check it out. I’ve never released anything like this before. I hope you enjoy it. It’s at TinySeed dot com slash bonus. 

Rob Walling:
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You’re listening to Startups. For the Rest Of Us, I’m Rob Walling. In this episode, I sit down with a longtime podcast listener named Zamir Khan, the founder of Vid Hug. And as you’ll hear in this episode, there have been many touch points on this very show where Zamir has sent in a voice message or I wound up chatting with him back in 2021 when I did my call for anyone going through an exit. And I’ll talk to you for 20 minutes. So you’ll hear us recount this in this episode, but it is a pretty incredible story of a founder who started a B2C SaaS company and was really struggling, struggling to get traction, was struggling to grow it, and spent years facing the headwinds that we talk about on this podcast, high Churn. It’s hard to charge a subscription. I believe it was a one-time fee at the time, and it’s just really hard to get momentum in a business where the numbers are against you. 

And then if you listen to this episode, you’ll find out what caused his revenue to explode more than 100 x per month and an eventual offer to buy the company for an amount that we don’t disclose on the show, but it’s an amount that means he never has to work again. And you, dear listener, get to hear the whole show and learn whether he took that offer or not. It’s quite a journey. And in the middle of the show, we’re going to have a clip from episode 433, which I believe was in 2018, maybe, maybe 2019. And we’ll have a six, seven minute clip of his prior voicemail. And you’ll hear me and my former co-host, Mike Taber, answer his question. And it’s all relevant. It all ties in to his story and the eventual outcome. Before we dive into Za Me’s incredible journey applications for TinySeed, my B2B SaaS close today, September 9th. If you want the right amount of funding, an incredible roster of mentors, a world class network, an instant community of some of the best B2B SaaS founders in the world, head to TinySeed dot com slash apply. And if you miss the application, head to TinySeed dot com slash apply. Enter your email to be notified when applications open in the future, or likewise if your business isn’t quite ready, but you want to stay in the loop, TinySeed dot com slash apply. And with that, let’s dive into our story.  

Zamir Khan:
Zamir, welcome to the show. Thanks, Rob. It’s a bit surreal to be here, but I’m very excited  

Rob Walling:
Still. The listeners know you and I were just talking and I knew you were a listener of the show, but you said you were listening since before I bought tail, so that’s 2011 at least. You might be an og, like 14, 15 year listener, which is a trip. So here’s the big question. Are you going to listen to this episode?  

Zamir Khan:
A hundred percent,  

Rob Walling:
Yeah. Okay.  

Zamir Khan:
Yeah, this is a bit of a bucket list thing for me. Yeah,  

Rob Walling:
Awesome. Love it, man. So I’ve obviously in the intro told people a little bit about what you built and how you changed your life through SaaS, but I want to hear firsthand from you what it felt like when you saw millions of dollars appear in a bank account through after a lot of hard work, a lot of skill, a lot of luck. You saw more money than I’m guessing you had ever seen in your account. Walk me through how that felt.  

Zamir Khan:
Yeah, I think the answer may not be what one might expect, but I think the overwhelming feeling is one of relief because having gone through a fairly lengthy process with selling vid hug and one that my sample size is one in terms of experience there, but I don’t think there are sale processes that are a hundred percent smooth, but it had its ups and downs and definitely relief that all of that time and efforts came through. And also, I think I didn’t have the time or the energy to really absorb it fully because I knew next step was let my team know what had just happened. And then my heart was with making sure that they’re feeling secure because the entire company was acquired, the team, I wanted to make sure that they knew that they still have jobs and they’re part of this journey still, and they’re needed with the product. 

So that’s where my mind was. It was seeing that number was surreal and unreal. And definitely there was a little bit of celebration happening with my wife, but then it was like, okay, that’s cool, but we got to move on and there’s still a lot of work to be done here. That was, it was over time, I think as I had the chance to transition into my new role and frankly have a lot of responsibility taken off of my shoulders by the larger company that I was now a part of that I had over time, more time to appreciate the new reality of, okay, life is different now.  

Rob Walling:
Yeah, that’s a good way to put it. I think it takes most people quite a bit of time. It took me months to realize, oh, I love what you said, life is different now. I think there was a moment for me where I bought, I don’t know, a million dollars of Vanguard Mutual Funds. You know what I mean? It was like, I need to deploy this. I’m not going to do it all at once. And I was kind of a little bit of dollar cost averaging in, but I remember being like, who does that? Who buys a million? And it’s like, well, me, I guess now it just blew my mind. And that was a moment because having money in a bank account, it’s just a number on a screen. There’s utility to it, but it doesn’t feel, but to me, owning assets investments was like, oh, this is where the rubber meets road. And that’s where I was like, oh, okay. I’m in a different place than I was a few months ago  

Zamir Khan:
For sure. And I think the question people in that situation often get is, what did you buy to what toy? And I didn’t buy a Ferrari or something like that. I wasn’t in that mindset anyway, but for us, we had actually just bought a new house that needed a lot of work to be done to it. It was an old house. And before this, we were having to make a lot of decisions of like, well, we have a certain budget and we can do A or B, but we can’t do both. And so the difference for us was like, let’s do both. That was the kind of splurge, so to speak. But I wasn’t driving a Ferrari the next week  

Rob Walling:
That came, A year later, you strike me, someone who’s very pragmatic and will not over  

Zamir Khan:
It hasn’t happened yet.  

Rob Walling:
Yeah, yeah. You’re still thinking about it. I want to read a little excerpt. I asked you to put together a timeline. It helps us kind of navigate the story. And here’s a quote from this. You said, I was an avid listener to your podcast, and I completely bought into the philosophy, and yet I found myself on a path that broke most of the rules, B2C, low cost, one-time payment, an industry in which I had no edge. I knew this. I knew I was playing on hard mode, and yet I continued to do it. And I think because someone listening to this episode might be thinking, what the fuck are you doing, Rob? Why do you have a B2C success story on here? This kind of goes against the thing that I’ve developed over the years. We used to take B2C questions, Mike and I, and then I took it for a while, and then eventually I’m just like, I just don’t have anything to say here. 

Most of the time it doesn’t work out, but I followed your story is the thing. And you not only sent us in, I think it was an email question back in maybe 2018. It was episode 433, and I want to play a little excerpt of that here. You not only sent that, but then you and I stayed in touch and to cut forward, there was a few years ago, it was during the pandemic in 2021 where a, now it’s on the podcast. Look, if you’re selling a company right now, it’s the biggest decision of your life probably. And if you need 20 or 30 minutes of my time, do it. And I did a bunch of calls, I don’t remember how many 10, 15 calls with people just to do it. We were all at home not doing anything anyways, and you and I then chatted, and that’s when you told me, I was like, how’s it going? 

What’s going on with vid hug thinking, oh, what? It’s a cute business. And you’re like, someone made me a tremendous offer for this and I was blown away and we had a good conversation then. And so that’s one of the reasons I want to bring you on here. I also, bringing on counter examples, no one’s, right a hundred percent of the time, I have my rules of thumb of when things should work and this and that, and B2B I think is the best, but you’ve kind of proven that you’re the, what is it, the exception that maybe proves those rules?  

Zamir Khan:
Yeah. Let me say first and foremost, I’m not here to say you should go out and do a solo B2C Bootstrap startup. I’m not here to say that I believe that my journey is an example of what an other worldly event you need to happen to actually help you win in that space. As a bootstrapped founder, it’s clear that the pandemic was so big for Vid H’s growth. It was everything. What I tend to say to people is the pandemic was the largest marketing campaign possible for something like Vid Hug. It’s like if we had had millions of dollars of venture funding to do marketing for Vid Hug, it still couldn’t have done what the pandemic did for it. And so I think for any founder to rely on some event like that coming along would be a little  

Rob Walling:
Foolish.  

Zamir Khan:
Yeah,  

Rob Walling:
Because it was a big swath of luck. You were right place at the right time and you were doing things in public and that created an opportunity and you created your own luck. But in essence, yeah, I think you and I talked offline, it’s like if there was no pandemic, vid hug is not the exit that you had. It’s not the product that you wanted.  

Zamir Khan:
No, and I think my email question into you and the rest of my journey is a sign that I am not going to sit here and say I knew what I was doing, and I knew that this shift would eventually happen. I didn’t. And as I put in the notes, frankly, just before the pandemic started, I was at the point of almost giving up on Vida and I parked it and decided to focus more on my consulting because I had a family. I needed to pay the bills. So I’m not going to sit here and say that I knew it was coming, but it is that old saying of luck is when preparation meets opportunity. And I believe this is a firm example of that.  

Rob Walling:
Yeah, I agree too. All right, so now I do want to roll your question, and Mike and I weighing in saying, Ooh, B2C is, oh, I don’t know that I, and I think I’m several times, so it’s a nice side project, but wouldn’t, it’s a step one busy, you know what I mean? I can say that. So we will roll that here. Our next question is about how to approach a B2C company. And this is a long email, so I’m going to summarize it. He says he’s a huge fan of the podcast, started listening about five years ago. He’s a senior developer. He’s always had the product itch, and he’s working on an app. It’s called Vid Hug, V-I-D-H-U-G, vid hug.com started as a scratch your own Itch project for his mother’s birthday. And it’s definitely B2C. It’s low LTV, it’s non-recurring revenue. He says, I feel like I have a mini rob on my shoulder most days saying, what are you even doing with this question mark? 

Exclamation point thing is, I don’t really have a counterpoint for you except for a feeling. And that feeling comes from talking to customers that are now able to do something they previously could not. The plan moving forward is to focus on growing organic channels on the B2C side through SEO and referrals, and also build a B2B side, which would bring recurring revenue. Do you think I’m crazy for even trying this? And just as a point of data, he has basically a free tier, and then he has one that is $15 and it’s a one-time thing for the B2C side. What do you think, Mike?  

Speaker 3:
Well, to answer his question directly, am I crazy for even trying? The answer is yes. It’s just a matter of how crazy we all are.  

Rob Walling:
Exactly. It’s just a spectrum,  

Speaker 3:
Huh? Just varying degrees. Yes. 

So going back to the question of are you crazy for trying something that’s B2C? I would say no. I definitely think that there are opportunities out there for people to build B2C businesses that are solid and profitable. It’s just a matter of making sure that you are methodical about how you pursue your different traffic sources and putting people on your mailing list and optimizing the product itself for revenue and getting people into it and making them happy. And if you can do those things, it doesn’t matter whether it’s B2B or B2C, you’re still going to have happy customers who are going to give you money. But that last piece of it’s the key part, they have to be happy and give you money. If they’re not giving you money, then you don’t really have a business. And I think that’s the challenge that most people run into with B2C companies is that your LTV tends to be much lower and you need a larger number of customers in order to make it work. But if you can get those viral components, and there are a lot of viral components to something like this, you can email out to a bunch of people, and if one person gets in there and they email 50 people, now you’re in front of 50 people instead of just one. That’s a huge viral aspect that a lot of things that try to do B2C don’t necessarily have, and because this has that kind of baked into it, that’s an encouraging sign. It’s not the only thing I would look at, but it’s definitely encouraging.  

Rob Walling:
Yeah, it’s tough because B2C is just hard. It’s just a different game with this customer lifetime value. You can’t run ads, you can’t pay salespeople, you can’t, there’s so many things you can’t do. So it’d literally be outreach to bloggers and offering it free to bloggers and sponsoring bloggers. And I keep saying bloggers, podcasters, whatever, people with audiences. If you got, here’s the thing, if you got a bunch of Instagrammers with huge followings, YouTubers, bloggers, podcasters, yeah, it would be possible to grow this, but it’s a completely different playbook than what we typically talk about or what you’re going to hear from MicroConf speakers, for example, or in the traction book where it really is more focused on doing a lot more B2B stuff. So you just have to ask yourself, is that what you want to do? Do you want to build those relationships with influencers? 

And it’s not going to be the core of the hrs workflow or the core of a manager’s workflow. It’s a nice to have. And I think that’s the other thing to think about is I had businesses in the early days that only made a thousand a month, 2000 a month, and frankly, I learned a lot from them. It was a stereotip approach, and I learned how to whatever, run ads and do SEO and do display ads and do AdWords and that kind of stuff. And I took that experience with me to the next thing. So in its current incarnation, do I think Vid Hug can be a mid six figure business? I don’t, and it’s just my opinion, right? It doesn’t mean I’m right or wrong, but I don’t see an angle there as it stands today. But then again, I could have said that about Drip the month it launched because it was just an email capture form, and then we kept pivoting and grinding and customer developing and slow launching and doing all the things that you heard me talk about on this podcast over the years and eventually got it into the seven figure mark. 

And so that’s the thing is as it stands today, vid Hug, it is a cool side project, and frankly, I’m impressed that you’ve gotten it to $600 a month given the price point and all that. But I think it depends on how you’re thinking about it. If you think about it as good learning and you want to build it up to a grand two, three grand a month, that to me seems doable. And it’ll be learning and it’ll be a little bit of income. I don’t know how you would ever get it passed there. Maybe you’ll eventually come to the point where you see an angle to do that. I also had a lot of businesses that never did. I had eBooks and info products, and I had e-commerce site and I had small software products, and I had one time software products and all of those topped out, and I could never get them past, let’s say between 505 grand a month. 

I had several that were in that range, and eventually I either sunsetted them or I sold them as I moved on to bigger things. And so my gut is that Vid hug will fit into that space, that role in your entrepreneurial career, and there’s certainly a time and place for those, and you just got to figure out, I think, how you were thinking about it and where you want it to take you. So yeah, obviously Mike and I were, it’s funny. I think we were right. We were right, but also wrong. Obviously, we were technically incorrect because it became something most, but we couldn’t have predicted the pandemic, where as you said, I love this phrase you used. You said, I basically got to problem solution fit, but good vibes don’t pay the bills. And C, basically the pandemic shifted the market and brought product-market fit to me. Most of the time, you have to tweak the product to fit the market, but the market basically shifted to you, which I think is a succinct and very clever way of saying it these days. Vid Hug is located@memento.com. Memories are made with Memento, and it started off as something that you built to fix a pain point that you experienced with your mom’s 70th birthday. You want to tell us that story?  

Zamir Khan:
Yeah, that’s right. So this was back in this late 2016. My mom was turning 70 years old, the milestone birthday, you want to do something special, and I come from an immigrant family. My mom’s family and friends mostly don’t live close by. They live in other continents. And so we thought, well, what if we got everybody to record a video message to mom and put that all together into one video? And my mom was turning 70, she’s the youngest of her many siblings. And so you can imagine the crowd, the audience that I was trying to get recorded videos sent to me digitally from. And so I experienced the challenge with that. I did actually put together a little webpage where they could visit it, use their webcam, record a video, and that would automatically get sent to me. And that even that, as clunky as it was, was easier than record something and put the file in Dropbox and or try to email it to me, but Gmail attachments won’t allow that kind of thing. 

Then I put them together in iMovie. It took me a long time, even though I consider myself a technical person, it’s just you want it to be good and perfect by the end of it. When I was going to show her the video, I was honestly sick of the project. I was like, I spent way too much time on this, but let’s see, let’s show it to her. And it was as I would find out again and again, and again with Vid Hug, it was one of the most impactful gifts that she’s ever received. She was speechless. She cried. She told me, especially because her generation is not as digital. She told me this one friend that you had in the video from Australia, I haven’t seen her face in 25 years because we write each other letters, but we haven’t necessarily shared selfies because we don’t do that. And so I know that’s a generational thing, but that just showed me the depth of the impact of it. And I think it was my brother’s partner, she said she knew I was techie. She knew I liked to hack on things. She said, you should build something that anyone can do this. And that just started the idea. And I was like, yeah, wouldn’t it be cool if more people did this? Because it didn’t take so long to do.  

Rob Walling:
And so you built an MVP and it seems like spare time, 20 17, 20 18 hacked something together. And did you originally give it away for free, or did you have kind of a Stripe link from the start?  

Zamir Khan:
No, the bare bones MVP was very, I had read the Lean Startup and I was trying to be good. So my MVP was simply a webpage where you could submit videos, and it was me, I moving the clips together on the background. 

And so I was doing that for family friends. I was kind of advertising it as a service just to validate, is this something other people want? And I got good feedback from that. Then I was like, I don’t want to iMovie these things. And so the technical challenge was like, can I build the video editing automation on the background? So I built that in the cloud, very rudimentary, and that’s when I first started charging for it with Stripe. And that was very basic. It just put the videos together, no background music, no audio normalization, almost no graphics of any kind. The process would succeed probably 85% of the time. And the rest I was I moving? Yeah. So then incrementally, there were newer versions after that that were faster, better graphics, more music. And actually the last incremental version that I made, which was a really big step up in terms of what the user got, was released a couple months before the pandemic.  

Rob Walling:
Wow. So just luck meets opportunity type or preparation meets opportunity in that case. So when you added a strip link to it at middle of 2018, I have in the notes, and did it make any kind of money over the next year or two? Was it this like hundreds a month?  

Zamir Khan:
Hundreds. So yeah, I wrote into the pod, I got to 600 a month, and that was because of some fortunate marketing on my parts. I was a technical person figuring out how to market. I was on Quora answering all the special occasion related questions. And at that time it was tough because not only had I picked B2C, I had picked something new that people didn’t really know was an option for them. They weren’t searching for group videos, so I had to find who were the people who really, really needed this product and were desperate for it. And so I was trying to get into communities related to, let’s say family with people deployed in the military and people in long distance relationships basically I found were the ones that really were coming to this product. So yeah, hundreds of dollars a month. It was a side project. Obviously I was still doing technical consulting work to pay the bills, but I was passionate about it because every user that came along and used it had that same reaction of like, wow, this, I only spent $15. A lot of them told me I would’ve spent a lot more had I known what the impact was.  

Rob Walling:
How much were you charging? It was a one-time fee, right?  

Zamir Khan:
Yeah. I think I started at $12 and then I increased to 15. And again, early stage, I was that founder who was like, I was putting 90% off coupons out there just to try to get people to use it, and gradually got away from that. And so you can see the mountain, you have to climb $600 a month is not a lot, but it’s a decent amount of users you have to attract. And they churn every time one time, right? One time. So  

Rob Walling:
You need 50 new people to convert and pay you every month to get to 600. And that’s where one time is difficult. That’s where B2C is difficult, the pricing is low. And so I think what we said in the podcast episode is like, you just don’t have money to market. You can’t really do much. You can’t buy ads. It has to be these free marketing approaches, which is free, which is your time, and that you did Quora and Reddit and Facebook. But here’s the thing. You went out, we talk about hard work, luck and skill. You put in hard work. You reached out and got a crucial backlink from a blogger who had a listicle about long distance gift ideas where they said video, and you’re like, Hey, can you just add a link to Vid Hug? And that was a flywheel for you, right?  

Zamir Khan:
Yes. Yeah, I love that story. So I was still listening to the pod at the time, and I knew I needed content. And so I did start a blog for Vid Hug, and I was writing my own, but I knew, again, that was a long-term thing that wasn’t going to happen right away. So I knew the terms I was interested in were related at that time to long distance relationships. And so one of the top terms for that was a listicle about long distance birthday gift ideas. And it was from somebody who had an e-commerce business where they sold birthdays in a jar basically, or a gift box, but it included birthday cake in a jar, I believe. Really a lovely idea. And they had this article of here’s the ideas, and obviously their product was in that list, but number four was make a video. 

And almost all, I remember all the 10 links or all the 10 items in the list had a link, but the fourth one didn’t, the video one. And so I thought about it and I didn’t want to just cold approach them. So I actually did a little bit of research on this founder. She was on an interview somewhere. I listened to it. And so the one, I reached out to her, I had done my research, and so it was an approach where I, I had spent some time learning about you, and I think that made her receptive to talking to me. And we actually got on a phone call together and had a good talk. She was a solo founder of an e-commerce business. I was a solo founder of Vid Hug at the time. And she just said, yeah, I’ll do that. I’ll put that link on you for there. And because of where she ranked, that was immediately like boom, one to two sales a day just from that link, which I know again, doesn’t sound like a lot, it’s not a lot of money, but for me at that time, that was a level that was a stair step for Vid Hug, and that actually gave me more motivation to keep going with it.  

Rob Walling:
And that’s the thing I like to underscore on the podcast a lot is flat revenue, no revenue, even just any type of flat revenue is really discouraging. And spending tons of time nights and weekends and having the number not go up is harder than most people realize. And so getting, as you said, one to two a day, 30 to 60 a month, that becomes, it’s not technically MRR, but it is recurring ish as long as that keeps ranking. And so that’s what you were seeing, which can really help boost your motivation for a while so that if we smashed forward, that was in 20 18, 20 19, you put the Stripe link on, you did a lot of one-time things that don’t scale, like we said, Quora and Reddit, Facebook, you get that link. And if we smash cut to February of 2020, right before the pandemic starts, you had vid hug up to a thousand dollars a month still on paper use. And so that gives people an idea of you were spending years, nights and weekends to get it from, it was at 600 I think in 2018 and then a thousand dollars a month. It’s a tough thing. And you said, I considered selling it even had interest, but didn’t complete the sale. So you were kind of just like, I don’t know if I want to keep doing this. I mean, you were kind of done with, yeah, what was the story there?  

Zamir Khan:
Yeah, so again, like you said, that’s early 2020, and as somebody who was a freelancer consultant, that’s the time that I did my annual taxes for the previous year. And 2019 was the year that I took the most time away from billable hours to work on Vid Hug. And it was easy for me because I enjoyed working on Vid Hug. Again, it was a fun project from a technical perspective, and the customers were having great experiences, so there were good vibes, but it allowed me to ignore the stuff we’ve been talking about with the low revenue numbers. And so that was staring me in the face at the time of doing taxes. It was like, whoa, okay, I’m having fun and I feel passionate about this project, but I have a wife, I have a family, and I have a mortgage. And I think anybody who’s been a freelancer consultant also knows that you don’t get promotions when you’re in that position. 

You don’t get a new job title every year, and you probably have a peer group where you’re seeing people make real tangible progressions. So that combined with like, whoa, my income was a lot less than it was in previous years, and UG is what I have to show for. It really made me examine it and think, obviously I wasn’t ready to fully step away from it, but I said, I’m going to put it on the back burner and I’m going to focus on my consulting. There was one other piece there that was making me feel that, which was, the other anecdotes is about the support that I had to do for Vid H because it’s a B2C business, low cost, and actually, I think you’ve said this before, sometimes the lower the cost, the more support you might have to do for those users. And so most of the users of the products were, I mean, almost all of them, lovely, but it’s a technical thing, and it’s attracting people who are non-technical. 

And again, I’m the solo founder. It’s a side project. It was buggy at the beginning. So I remember one time I was with my family, we were at a nice cottage in the back country, doesn’t have wifi and not good cell signal, and I’m trying to have a Help Scout conversation with a customer, and my family is inside playing board games, and I’m standing on a rocky beach holding my cell phone out to try to catch a signal until I feel my phone buzz with the next response from Help Scout. And that combined with seeing what it meant for the bottom line, it was like, this has been fun, but is it really worth it? That was kind of the feeling.  

Rob Walling:
Yeah, I’ve been in that same situation up on the coast of Maine at one point early on when I was doing everything myself, 2008 or oh nine, and I was there with the family, had a young kid, and I remember trying to get sales service to answer responses, and I also had some one-time sales stuff at the time, and it was just like, what am I doing? What is happening right now? I don’t want to be doing this. And especially for 12 or 15 bucks one time, every email you respond to is like, well, I just kind of, you know what I mean? None of this was worth it. So yeah, I could see how you’d be discouraged not only lack of growth, but the support. And then one month later to March of 2020, and I think you sent me a graph, which is awesome, but it’s like your daily active users goes from, I dunno, approximately 250 a day to 5,000 a day by the end of March. So it’s not like a 20 x increase. And obviously this has something to do with the lockdown. You want to talk us through the logic that caused that to just spike up? Was there suddenly search volume or were you being mentioned? What was the real, or was it just all direct and people were somehow, yeah, I just dunno how they were finding you.  

Zamir Khan:
Yeah, it was a crazy time. And I think the funny thing is that I think most people assume that because I was deep in this product and I understood who needed it, that I would know right away what would happen, but I feel a bit stupid. I was so focused at that time when things started locking down, when they announced that our kids wouldn’t be going back to school, I was focused on, I’m back with my consulting business. I’m moving that from the coworking space back to home. My wife and I need to watch our three kids as they’re at home and make sure that they’re still getting some education. And of course, I was watching the news and frightened about what’s going on. Vid Hug was at that time, like a Google Analytics tab that I kept open on the side. I like to see the real time, who’s on the site and how many people are using it and that kind of thing. 

And I remember trying to pay attention to my consulting work and noticing that the number of users on the site kept growing. You could watch it literally in real time. And as you saw in that graph, it just kept going. I wish I had the a hundred percent clear attribution to say what drove that. But what happened was that people couldn’t celebrate in person anymore. I knew that Vid Hug helped people celebrate who couldn’t be together in person because I knew it was used by people in long distance situations, but now everybody couldn’t celebrate in person. And so my feeling was that it was a combination of a few people found the product and knew about it probably through that link that I landed. But after that, it’s got a viral loop built into the product. That’s one of the advantages. So if somebody does a vid hug, we call them the organizer, they’re the one that’s commissioning, they’re making the video, they then invite their friends and family of the person that it’s for to participate in the video. 

Sometimes they invite 100 people, 200, sometimes 20. But a lot of people, all of those people come to vid hug and record a video. They’ve now seen the platform. They understand in a sense what it makes. And if only a handful of those people, a small percentage of them later say, oh, my mom’s birthday is coming up, or My son’s birthday is coming up and I don’t know what I’m going to do because it’s, that’s what happened. And the thing that surprised me, many things surprised me, but we would see happy second birthday videos on there. People were making birthdays for the kids, which I didn’t never thought this product would be for that because kids have birthday parties in person. And so we were seeing that. We were seeing schools use it immensely for teacher appreciation, for just staying connected with each other while they were all at home. And so from March, April, may, that growth just kept going like a freight train.  

Rob Walling:
And the viral loop, I think is a huge key to that. I talk in the SaaS playbook about SaaS virality, specifically different Facebook virality is different than SaaS virality, but within SaaS demarcated, strong virality and weak virality. So let’s do weak first. A good example of this is Savvy Cal or Sewell, Sal’s Scheduling Link. Sewell is electronic signature. I can send you a link to book me. I don’t invite you to be a user. I don’t invite you to contribute, but you’ll see Powered by iCal, and that’s what I call weak virality. Same thing with electronic signature. You’ll see, oh, he’s sending documents through Sewell. Cool. Strong virality is when I invite you, virality is Slack, where I’m the tech lead on my five person dev team, and I invite my four other people. They create an account and they do stuff, and they interact with it more deeply than just clicking a link or clicking a thing. 

And so Vid Hug has, at least by my arbitrary definition, strong SaaS virality, even though you still weren’t SaaS, you were still one time, but it drove the attention. And once people have used it, then they get the idea, oh, well, I could send this to my friends and my family and all that. And so you hit milestones. I love that you listed this. I hit milestones. More revenue in one hour, then usual in a day, more revenue in one day than usual in a month, more revenue in one day than all of 2019. Then you started working seven days a week, 14 hours a day. And so your wife must have, I mean, she was just on taking care of three kids duty. You had no time to do anything. What was your time spent doing? Was it mostly support or was it scaling and bug fixes?  

Zamir Khan:
All of the above. There was a lot of supports, and again, when we plot out the metrics of how many users that used Bid Hug actually needed support, that percentage is very low. But because a single customer brings 100, 200 people to the platform, people who record videos would still come in to support and say, often they’d have a webcam issue that wasn’t our problem, but they’re on Vid Hug using it. And so we would support them through that. Or somebody who’s being sent the video, I, I’m trying to watch the video, but my old Windows machine doesn’t have the right codex on it, that kind of thing. So yeah, even though it was a low percentage of the number of active users that needed support, my Help Scout inbox was just full. And so I was doing all of that. Luckily, I had, again, this is preparation meets opportunity. 

I built Vid Hug with a serverless backend using the serverless framework. So it was using microservices on the API side. And that actually scaled fairly well. I had some minor hiccups there, but I do feel like if I had it running on, and I’m not advocating this as a reason, because again, this is such a one-off, but if I had running on a small server, it would’ve completely just, it would’ve been trouble fallen over. So there was little things. It was all in AWS, but definitely had to tweak some things there. And also if people remember during that time, even large services were having trouble because everybody was moving to work from home. Everybody was going remote. The internet was just under strain. So a lot of the issues that we ended up having were larger third party services that we relied on going down. We had an AWS outage. We had at one point in time, vid Hug was using Digital Ocean and they had an issue. So those kind of things, but of course, your users don’t know that. That’s, to them, that’s a vid hug issue, and that’s fair. There was that and yeah, bug fixing, because at that time, I’d never had so many people with so many different devices and browsers, recording videos in the browser has come a long way. At that time, it was still device dependent, browser dependent, lots of those things.  

Rob Walling:
And to give people an idea, I had said, you went from 250 actives a day up to 5,000 a day by the end of March, and by the end of April, you’re at almost 80,000. So it just, I mean, talk about exponential. And in April, again, we talked about you were at a thousand dollars a month plateaued in April. You did six figures of revenue. And I remember you emailing me during this time, you could probably pull it up, but I remember you were extremely stressed and you were like, this is brutal. And in the notes here, you sent me, it sounds ridiculous to say that I experienced trauma from a wildly successful growing business, but I did. You were staying up till 3:30 AM at one point because there was this service in Romania that went down and they were asleep. And the downside of Vid Hug is quoting you. The downside of Vid Hug being so special to users was that when it didn’t work, you were responsible for ruining someone’s birthday or anniversary. Every single user was truly there for a special occasion. So this sounds like not fun at all.  

Zamir Khan:
Yeah, yeah, absolutely. So it’s the upside of experiencing the user’s joy when their occasion comes off. But you get to experience the downside of that too. So in that time was again, a third party service to have our videos recorded in the browser and then transcoded and sent to our servers. We used a third party service by some bootstrap founders who were in Romania, and they built a great product, frankly, and for the most part it did work. But like I said, that early stage of the pandemic was not really a good time for many services. And so they did have some downtime when they basically got, my understanding is they got DDoS by one of their other customers, another customer who didn’t realize that they were going to have so much volume. And so that meant that nobody could submit a video to Vid Hug during that time. And I think I have this in the notes too, just to give you a picture. At our peak in May, a video was being submitted to Vid Hug every second incredible  

Rob Walling:
Volume.  

Zamir Khan:
So every second, or maybe a little bit less than that, somebody was not able to submit a video to Vid Hug. And these people were, I’ve been invited to be part of my friend’s birthday, and now they’re not going to get my video because it’s not working for me. Or I remember talking to someone like, I’ve been working on this video for my husband for weeks and it’s birthday is tomorrow, and I want to surprise him with it, surprise him with it, but it’s not ready because the rendering platform isn’t working. And while those times were rare, my heart was so intertwined with this product as its creator, as its founder, that I soaked in when the products worked well, and I loved that, but I felt heartbroken when this happened to users. And I remember that night, I remember, I want to say I remember it well, but it was not enjoyable. 

I was exhausted, and I remember just sobbing with my wife next to me. She was kind of comforting me and frankly saying to her, I don’t know if I have it in me to keep going. And I did. It sounds crazy to say when you say the revenue numbers, I thought about pulling the plug, thought about putting up a static page and saying, sorry, folks, I just can’t do it anymore. And I’m happy that I was able to connect with some advisors and hire some help and dig out of that place. But I almost got to that place where it wasn’t worth it to me no matter how much money it was making.  

Rob Walling:
And that’s a really weird place to be, huh? Because as an entrepreneur or an aspiring founder, when you’re doing it nights and weekends for years and years and years, all you want is success and sometimes success, even when it doesn’t come this quickly, it can still be extremely stressful. I can certainly speak to experiencing that with Drip, which again, didn’t grow nearly exponentially like this, but I remember thinking, shouldn’t I be happier? Is this what I’ve wanted for 10, 15 years and now I’m here? And it’s like, this is not very fun. And that’s a really, really interesting place to be. Why do you think you didn’t pull the plug?  

Zamir Khan:
I definitely want to give some credit to my wife that she was very supportive and she wasn’t the kind to say, no, don’t pull the plug. You should keep going that strongly. But she was there for me and kind of in a way, this will pass. These things always do pass. And it did. And what I found, even though I was answering so many support questions during that time, almost everyone was so understanding. They were like, oh my gosh, I’m speaking to the actual creator of this product. I had in my signature er, Khan founder and CEO of Vid Hug. Little did they know I was the only person working for that company, but they felt special. And they said, oh, you’re looking at this right now. You’re responding to my email in the middle of the night. Thank you. And so that made it a bit easier. But I have to give credit to my wife, Heather, just like when I was out on that beach holding the phone out for Signal, she wasn’t saying, why are you wasting time on vid hug? It’s not paying the bills. She never said that. And so I think for a lot of founders who have been through this journey, they know that it takes more than just one person. There’s other people behind the scenes that make that happen.  

Rob Walling:
My wife, Dr. Sherry Walling, has a phrase that your spouse or significant other, your life partner is your original investor, your original. So if you raise subsequent funding, your original investor is that person was there with you because they put up with your bullshit. And I say that about because she put up with my bullshit for years and years of the nights and weekends, and I think that is almost a requisite to be able to pull it off. It is hard to do this alone.  

Zamir Khan:
I love that term because yeah, they go all in, right?  

Rob Walling:
Yeah. And so obviously you get this popular this quickly. You received inbound interest from a lot of investment firms, including Sequoia, including Punchbowl, which is a digital invitation and greedy card platform that wound up acquiring you in 2021, I believe, is when it finally closed. But you were getting this inbound interest to raise funding, and you’re thinking to yourself, I’m just trying to keep this thing afloat. I’m a bootstrapper. Do I need to raise funding? Do I want to raise funding? Right. It’s going to complicate things. But in 2021 it was Matt is the CEO of Punchbowl reached out again, and instead of investing, he says, maybe we should buy you. Was that even on your radar before then of selling? Were you thinking about, I mean, or were you just trying to keep your head above water? I’m guessing by this time you’ve hired some help, you have some support, help. This is a year-ish, nine months after pandemic started, but what was your mindset as you entered this negotiation that eventually resulted in an LOI and them closing the deal?  

Zamir Khan:
Yeah. First, I want to take it back to that early time period when I first had that inbound interest, and including from Matt at Punchbowl, who at the time I did not know at all. I consider him a friend now, but at that time, it was just some random guy from a company that I hadn’t heard of, and he reached out to me. A lot of people at that time reached out to me say, Hey, I was in a vid hug, or a friend gave me a vid hug, and I love the platform. Let’s talk. So at that time, like you said, there were still so many fires that I was fighting. I used the phrase building the airplane while flying it, that I didn’t even have the capacity to entertain such ideas. And as far as investment, I said, look at the company’s bank account. 

I’m not spending that money right now. I don’t need an influx of cash. I need other things. And so it was hiring that we needed to do team building because we basically experienced what you might consider four years of growth in three to four months. And so the company had a lot of catching up to do, and that’s what we did over that time period in 2020. So when Matt came back around, and that was unexpected to me, he came back around in 2021 and said, Hey, how are things going? Do you have time to chat again? And when the conversation came to, I’m not interested in investing, I’m interested in buying the company, then I had time because I had a team in place. I wasn’t working such a crazy schedule. The product had improved to the point where it was working well, and we were actually looking at, we were doing active marketing, we were looking at building out different features, maybe going after a B2B market a little bit. 

And we had already had also some other inbound interest for, it was never like, we want to buy your company. But it was like, let’s talk about integrating vid hug with our product in a way that I knew the eventual goal. There was just, it was an audition. So when Matt came around, I was in a place where I had the time to have that conversation, and I was also in the place of someone who had gone through four years of growth in four months, and I was burnt out. And I was like, oh, here is a company, a strategic buyer who has a team who has been at this for over a decade full of smart people who can help me and work alongside me. And that seemed very appealing. I was like, I still want to work on vid hug, but being the CEO of this company, which means a lot more than the stuff that I’m great at, which is product development has taken its toll, combine that with just pandemic life with kids. I knew there was a change coming. I knew the pandemic would end, and I knew that we would navigate our way through that. But that was daunting. And so when this opportunity came along, I was like, let’s talk.  

Rob Walling:
Yeah. And I remember when you and I talked on the phone, then in that early 2021 timeframe, I was surprised at the amount of money you were going to get because I thought of it as a one-time B2C. My valuation criteria obviously is going to be skew better for B2B for subscription. And you certainly had the growth, but even I remember we talked about, I was like, if you don’t sell now, when the pandemic ends, does this keep going or does it not? It doesn’t seem like it will. And there was a whole thing about that. And so I was also, because to me, that’s, it’s not platform risk per se, but there’s an existential risk to the revenue. And so when they made the offer, I was quite positive about it, or at least in my heart. I don’t know if I couched that on the call or not, but I remember being like, dude, this isn’t enough money. 

You never have to work again. I would in your shoes, seriously, seriously, seriously consider taking this. This does not seem like a bad decision long term. And this allows you to work on and do whatever you want forever rather than worrying about, Ooh, as the pandemic goes away, declines ends, whatever we want to phrase it, is this business still viable? With all that said, all exits are painful. There are no smooth times of selling your company. And so as we wrap up, because we are hitting time, I’m curious, can you summarize from LOI to close? Was it happy go lucky? This is amazing, everything’s great. Was it like, holy shit, this is way harder than I thought it would be. And man, I wish Rob and Sherry had written exit strategy five years earlier so that you could have read it and it would tell you how painful it would be.  

Zamir Khan:
I definitely wish I had exit strategy on my desk during that time, a hundred percent. It was not easy, and that’s not to say that I was dealing with anything unusual, but it’s a process. And again, with a small company, with a small team, this is not something that I wanted to present to my team and say like, Hey, we might sell the company, but it might fall through. So I knew that’s something that I had to do quietly keep the company operating because there was a lot to do, and also have these conversations and go through this due diligence. So that was challenging. It was extra work. And then at times, at one point, the other side went quiet for a long period of time, and that was incredibly stressful for me because I didn’t know what was happening. Later. I would learn that that had nothing to do with vid hug, nothing to do with me. 

It was just something that was going on on their end and not intentional, but even up until I would say one or two days before closing, and we’re talking about a process that lasted several months, there were points in time where I thought, oh, this might not go through. That’s incredibly stressful because throughout that process, you’re trying so hard to stay level and say, this may not happen, and we’ll continue with the company and we have a plan for it. But I think anyone who’s been through it knows that at some point in time, you get to a point where if this doesn’t happen, I don’t know how I’m going to go on.  

Rob Walling:
Yeah, exactly. That’s one of the hardest parts is you get attached to the money, but you also get attached to the idea that it’s not going to be so stressful and that you’re going to have to be able to hand off a bunch of hard stuff probably that you don’t want to do to someone else. You get attached to the idea of, yeah, I think you can really clearly see a future that you like better than the present. And to realize that could just get taken away from you at any time. It’s like, oh, this is hard. It’s a hard way to live.  

Zamir Khan:
Absolutely. It was that. And also I had put so much time that process that I could have put into growing Vidhu and preparing for what you said, the market shift that was coming. I knew what we needed to do, but I had just taken so much time away from that that I could have put towards it for this. So it was a bit of a sunk cost feeling too, that fear of  

Rob Walling:
Yeah, for sure. And so you actually stayed working with the acquirer who is now called Sincere. You worked with them for another four years, which is unusual for someone to hang around that long. You didn’t have golden handcuffs for very long, if at all, but recently just what, four or five months ago, you flew the coop, you went solo, you’re hanging out. Are you building another thing? Don’t build another thing, by the way. Not yet. Give yourself a minimum. Six to 12 months is what I want you to take because you do have the luxury of that time. So how you’ve been spending your time and why has it been some of the best months of your life? I remember this time where I was just like, oh, this is why I did all of this for, this is amazing.  

Zamir Khan:
Yeah. I think one thing about staying at Sincere for a while, which I had a great time at, great people. I loved continuing to work on Vid U, which became Memento. One of the things that allowed me to do is slow down from founder mode to executive employee mode, but still it’s different. It allowed me to bring some work life balance back and it allowed me to start building things into my life that I knew I would want to do after that journey ended. And so one of those things was I became a fitness instructor, like a group. If you think of those fitness classes at the gym where there’s like 30 people working out together, I do that. I started coaching my daughter’s soccer team, those kind of building in those activities that good for mental health, physical health, and also keep me from going all in on some other projects in the near future. But the way that I stay in touch with what I love is building new products and startups. I have invested in a few startups locally, actually, founders that I kind of came up with through my journey. And so in advising them and working with them, I get to still, I think as Rob still get that taste of the trenches and the ups and the downs, but I also get to step away from it at times and not have it be on my mind all the time.  

Rob Walling:
Yeah, it’s a really nice, really transition. Well, man, hell of a journey. Thanks for chronicling it here in so many ways on this podcast. From your email back in the day to tell on your full story today. If folks want to keep up with you, you are on X Twitter, it’s Zamir Khan, KHAN, but the I is a one. So we’ll link that up in the show notes if folks want to follow what you’re up to next. And of course, memento.com if they want to see what you’ve built. And you’re on LinkedIn as well. Thanks again, man, really appreciate you coming on the show.  

Zamir Khan:
Thanks for having me, Rob. It’s been a pleasure.  

Rob Walling:
Thanks so much to Zamir for coming on the show and telling his story. And thank you for listening this week and every week. This is Rob Walling signing off from episode 794. 

Rob Walling:
We’re back with episode three of Season five of TinySeed Tales. I hope you’re enjoying the season so far. Before we dive into the episode, I wanted to let you know that TinySeed applications are open for our Fall 2025 batch. If you’re a B2B SaaS founder with at least $1,000 of MRR and you’re looking for the perfect amount of funding, a community of ambitious like-minded founders and a network of world-class mentors, you should apply. If you know your metrics, the application only takes about 10 to 15 minutes to fill out applications close on September 9th. Get all the details at TinySeed dot com slash apply, and even if you miss the application deadline, enter your email@tinyc.com slash apply and you’ll be notified next time we open applications. Let’s dive in.  

Harris Kenny:
I believe really firmly that we are ahead of the market. I think that the users that we’re signing up and the prospects we’re talking to today represent the very beginning of a big chunk of a bell curve of the market that’s going to be changing its process.  

Rob Walling:
Welcome back to TinySeed Tales, a series where I follow a founder through the rollercoaster of building their startup. I’m your host, Rob Walling, a serial entrepreneur and co-founder of TinySeed, the startup accelerator for ambitious SaaS Bootstrappers here in season five. I’ve been talking to Harris Kenny, founder of Outbound Sync. In our last episode, Harris moved on from a broad market approach to zeroing in on agencies helping clients with cold outreach. Time will tell if the move paid off, but early indications are that it’s working out soon after closing the biggest contract in the history of his company, Harris sent me this audio message.  

Harris Kenny:
We just closed our first enterprise deal. It was really nerve wracking. Ended up spending a bit of money with attorneys going through the contracts and things like that, but we closed an annual contract for $20,000, the largest we’ve ever closed by far for rep on sync. And then we’ve got two other mid-market deals in pipeline that are going to be for our Salesforce integration. Then another couple of Salesforce ones pending, so we’re going to go from one to five paying Salesforce customers probably over the course of a month, and MRR is just, it’s hopping up. We’ve got a couple agencies now that are really growing and so we’ve got some nice expansion revenue with them and this feels like the beginning of a big jump. So it was like three months of pretty flat bouncing around, just hovering around an under 10 KA month and then all of a sudden it has just popped and I feel like this is going to be another good month. And then if this continues through to December. So anyway, feeling really excited and it’s funny, after those three months of flat revenue, I was genuinely wondering if I was making the right decisions. I was just spending money and spending money and spending money, but right now it feels like those bets are paying off. I feel more confident than I ever have that this might work.  

Rob Walling:
So it sounds like things have, I dunno, turned a corner, may not be the right way to put it, but where were you flat, relatively flat for three months and now it’s like things are really accelerating based on all the investment of time and money that you’ve been doing over the past few months?  

Harris Kenny:
Yeah, definitely. I mean, there was a few things that happened at once when we got into a TinySeed and I was spending a lot of time shutting down my old agency, which now I can say officially we have no clients left, and I talked to my accountant, we like, here’s the roadmap for dissolution of the entity, all that. So that’s really happening. So that was a little bit of a distraction. I was also a little nervous to spend the money. It was the most money I’d ever seen in a bank account before, and so this kind of evolutionary instinct of hoard and then also how to spend it and so it took time to spend some of it. So while all that was happening for a few months, revenue was flat. We had a little bit of new customers, but a little bit of churn. 

And so then I was starting to get anxious about that and I was questioning do I know how to do this actually or did I only build a pretty good idea? And then I don’t know actually how to run a software company. I technically don’t know how to run a software company. I’m learning right now how to do it. But then September was our highest month ever followed by October, followed by November, and now it’s December. Again, highest month ever. And the anchor for that is an annual $20,000 contract. I’ve never signed an annual contract worth this much before. We had one earlier annual contract a couple months ago, but it was just for 5,000. So this is like we went through the process, we went through procurement, we went through legal, I had the privilege of paying our attorneys to review the documents and a lot of things that I had just invested in around security and stuff. 

When I was doing the questionnaires, I was actually checking the boxes of like, yes, we literally are doing these practices. Whereas before I spun out Aon sync, I had gotten the security questionnaire and I didn’t even know I looked back at that old spreadsheet and I didn’t even really understand what they were asking me. There were things where they asked and I was like, I literally just didn’t understand it and now much, much, much longer more complex procurement form. I not only knew it, but we were doing it. And so that just felt like, oh, okay, we’re playing a different game. It felt like I could one day have a salesperson doing this and not me. And so that just felt like really big progress even though they still haven’t paid us yet, but it’s net 30 and hopefully they’re going to pay the pay invoice. Yeah, so that felt like in the beginning of this is more of a software company, we’re growing, we’ve got these big contracts and I can have that conversation with the procurement team. I understand now a little bit of when they’re pushing back on what they’re pushing back on and what we can say yes to and no to, and all of that was just like I had no idea a year ago at all.  

Rob Walling:
For a long time I’ve been saying if you have to go through procurement $25,000 minimum a cv, and now I think I’m up to about given inflation literally and just how many years it spent. It’s like I think it might be 30 or 35 is my number. It’s almost 30 grand a month that makes it 2,500 in there. So I got to raise my prices, I think. So I mean if you truly do have to go through a full procurement process with security questionnaires and all that and potentially redlining your terms of service, whatever, all that happens, it’s expensive. When you pay your own lawyers to deal with this. Harris started the SOC two process about three months ago. It can be tedious and expensive and many early stage founders want to avoid it as long as possible, but it can also be a big unlock for closing bigger deals.  

Harris Kenny:
So we’re basically at the finish line and ready to start the audit. We implemented a lot of changes and actually they’ve been really beneficial. So I’m a non-technical founder. There were a lot of things that maybe a engineer founder would’ve set up from the get go that I mean, I’ve just always said to, we have one engineer and it’s just been like, Hey, let’s just focus on what customers need and whatever you need to do your job, but I’m not going to give you extra stuff to do. And so he was just pushing to production basically. And there were practices that SOC two requires that in hindsight we’ve implemented them and it’s been really good. So one of them is we have a staging server, and so we test every feature before it goes to production. And I know that we probably should have been doing that the whole time, but whatever. 

We didn’t even have customers in the beginning, so it kind of like wasn’t worth it. Another thing was security, which is actually already benefited us. We have now a web application firewall installed in Heroku, and we caught a potential issue that one of our integrations was sending over payload that could have been a cross scripting attack. And so we caught that because we had this add-on and engineer caught it, we troubleshot it and came up with a fix. It turns out there was no malicious issue, but there could have been. So basically our infrastructure was doing its job and none of that was in place prior to starting SOC two. So then we were able to tell our customers like, Hey, we’ve identified this issue. Here’s how we are now solving it. It’s actually not something we can control just getting this data, we’re getting these webhook payloads, and then we got to figure out how to deal with them and we want to make sure because we have right access to yours or your customer’s CRM, like your Salesforce, HubSpot, we need to make sure that we’re being diligent about what we’re passing along basically. 

And so it made us look really good and we have a status page, which we didn’t before, but we have that because of SOC two. And so I said, here’s the writeup of the incident and here’s the updates and here’s how we resolved it. And all of those things just felt like as we were doing it, it just felt really good and I feel like it established credibility with customers because we’re between these big platforms and so we have to prove ourselves of how do I know you’re not messing up on this? 

Who are you really? To me, and we’ve closed quite a bit of business because of it. We have gone through this big enterprise deal we just talked about, but also quite a few others. I’ve just sent them a link to our trust center and they’re like, okay, great. Yep, we can see you’ve got a lot of stuff in place. So I mean it has investing in that has improved our product, improved our customer support and increased our sales. It just forced us to grow up a little bit in ways where I want to take the company. I want it to be doing multiple millions in a RR, and so it’s like, okay, we were going to have to grow up in these areas. And so it kind of forced that to happen in a structured way where, I don’t know, I’m really glad about it. People gripe about it and I sort of get why, but in hindsight, I think if this thing works out, I think that’ll end up having been a really important decision at the time.  

Rob Walling:
Yeah, I would gripe about it. I hate that kind of stuff. You’re building a business and you come from the sales side and you know that to make sales and to get big fast, you’re going to have to close big deals and to close big deals, you’re going to need SOC two in this space, you just inevitable. And so you have just accepted it like a mature adult. I would tantrum and be pissed off the whole time and I would complain about it like a baby because I’m here to make great software and I’m like the crafts person and I’m like, oh, I want to do product and design stuff and make sure this is all elegant. And so I’d be like, ah, this sucked too. Why do I need this? This is just a headache. But you have just on this particular instance, I’m sure there are other ones where you take the opposite attack and that’s what we see within TinySeed. There are certain founders who are more like me who are like God kicking in screaming, just scratching and clawing. You have to pull from my cold dead hands. The knot not going to SOC two. And then there are those who are just like, nah, it’s not fun. But I also know that I’ll probably close literally hundreds of thousands of dollars in a CV next year if I have this that I will not if I don’t. And so that becomes the question that a lot of founders have to ask themselves  

Harris Kenny:
For sure. And it’s given me a better lens to understand what’s happening with our product. I understand technically much better how our product is working because of it.  

Rob Walling:
We’ve been talking about getting SOC two certified, a process that doesn’t come cheap, but that’s just one piece of Harris’s growing expenses with a young family at home and a business that’s scaling up. Every financial decision carries extra weight. I wanted to understand how he’s navigating these waters.  

Harris Kenny:
Before I ran an agency for five years, it was profitable. It had to be, but it was never like a breakout success. I was never able to fully hand things off. I was never really able to take a vacation. It was always hard still, even though I was financially successful. But also I had an LLC that had a sub S selection, so I was able to pay myself in a different way. I had distributions. I had a lot more flexibility starting up on sync. I wanted it to be proper software company, and this wasn’t a TinySeed requirement just in my head. I was like, I want to set this up from the beginning clean and not have it be muddied with my five year LLC with three different accountants and two different lawyers. And it’s like, I just want this to be a fresh solid start. 

And so that change, I did not fully realize how much that shift of, okay, now I’m only getting paid a salary because Zon zinc is a C corporation. And so now we have payroll through a DP and that’s it. That money that I get paid, that is my money. And I was just used to before being like, well, I can take a distribution out of here and make sure I can cover this or that unexpected expense. So that introduced a pressure that I didn’t think through fully at the time. I had five years of not having that kind of constraint that I sort of forgot what it was like I could always figure it out. Basically. I always found a way I landed bigger client or this or that. I started spending the TinySeed money more to get the growth going. And I would say both of those investments have been worthwhile. 

Developer is very productive. He’s doing great. We talk very little. He just cranks on stuff we check in. It’s a really great relationship and I can tell the difference him going to 40 hours a week, the productivity is way outstripping the percentage increase of time that he’s working. And then the CSM has been good because it’s freed me up. So he’s focusing on onboarding, getting new users. That hire has worked out so far really, really well. We went through dynamite jobs, recruiting board, remote first recruiting, and they found a very good candidate. I think he’s really taking ownership of things, he’s just running with it more, and that’s freed me up to focus more on sales. I think that’s why these last couple months have been getting better in terms of sales. I think that with these three people, me and CSM and engineer, my goal is that we get to 30 KMRR and that would give us plenty of head room at this point to be default alive. 

I’m just kind of trying to run as hard and as fast as I can to get to that. I could lower that number though if I reduce my own drag on the business. So in the home front, I’ve been implementing a budgeting app called yap, you need a budget. And we now have four months of my wife and I have four months of budgeting data of our own spending down to the cent. I did my own books for a while and I took accounting classes in business school. So fortunately that’s actually been pretty easy to do it just as you sit down and do it. So I’m trying to figure out how do we tighten up spending on the personal side so that I can reduce my salary, that I can extend that runway a little bit more. But yeah, right now I’m thinking about this a lot right now and we’re good now, but projecting out six months, I’m kind of like, okay, well, would I do a revenue-based financing? 

Would I pull some money out of retirement? We’re not running out of money yet. We’ve got money in the bank, but because I have this salary, I have these hard edges that I have to operate within. I kind of have to plan out further than I’ve ever had to plan before. It’s totally connected. And we had a little bit of churn, and it’s really hard to not be get too down about that. It feels like, oh, everything’s jeopardy. I was close and now I’m further. So there’s that. Yeah, it just feels like everything is all in one  

Rob Walling:
Basket, man. It’s tenuous because you grow another five or 10 KMRR and you’re like, well, finally we’re breakeven or we have a profit. Oh, now, but I need to hire an engineer to keep up with X, Y, Z. So I’m not saying it never goes away, but it really is, even when you’re doing a million, 2 million, 3 million a year, it’s always this balancing act and you do get more margin, but it’s not like at 3 million a year you have a million or 2 million just pouring out out of the bank account into your personal one. There’s still a stress, but the thing that as a founder you have to keep in mind is don’t sacrifice your own personal finances or your families in order to get the company going. But yes, there is risk. So how do you balance that? That’s the hard part. That’s why founders as a rule tend to have more anxiety and stress in their lives than employees of big companies, but employees of big companies tend to have a lot more depression than founders do. 

And there’s multiple studies that have verified that. Sherry, my wife has talked about this in a few talks. It is more stressful. The upside is significantly higher, but that does not come without some risk and some uncertainty. And those two things are tough and they’re tough on you and they’re tough on your partner or significant other so far, I think you’re thinking about them in the right way because you can be so stressed about them that they keep you up at night and that you hate being a founder. And if you sell this company or shut it down for years from now, you never want to do it again. Or you can not worry at all about it. And you can be like some people and they take out 50, 60, $70,000 of credit card debt to start their company and they’re not nearly risk averse enough. And it’s like there’s some balance in between of how do I be mindful of this risk but not let it destroy the journey and not let it be on my mind every minute of every day?  

Harris Kenny:
Oh, totally. I mean, I think fortunately, I’ve got some levers I can pull. I mean to go into my personal finances a little bit, I’ve got a universal life insurance policy that I had set up when we first got married. It’s like, okay, well let’s cash that out. Let’s set up a term policy that’ll actually pay out way more. And then, okay, I’ve got that little bit to pay off some debt, so now I’m reducing my month to month debt servicing that I’ve got in this area, better insurance than I had before. So there’s little levers like that that I’m pulling in a few different areas to. And then I mean, there’s hope on the horizon. Currently. I know for a fact that 35% of our income goes to childcare, but we won’t have young children forever. School is on the horizon. And so it’s like, okay, it’s possible that in three years we’re at MicroConf and I’m like, Rob, drinks are on me because the company’s ripping and we just freed up multiple, multiple thousands of dollars a month and free cash flow that aren’t going towards childcare. I do. I have that on the horizon that I think is a reasonable thing to look forward to. It’s not like maybe I’ll be on a boat, but it’s not like I’m going to be a hundred millionaire or whatever. That feels like a reasonable thing if I could just get there. That’s my mindset right now. We’ve gotten really far in a short amount of time. I think I can get there. I just have,  

Rob Walling:
It should get easier. I mean, you are still very early in this business and the early days, everything’s fragile. Even your knowledge and confidence that business is going to work is pretty fragile. Your product-market fit is really fragile. Your sales process is fragile. You are thinking of who is this revenue going to stick around? Is it going to continue to grow? All of that’s fragile still. And that does solidify as the company matures. Harris has talked before about expanding to other CRMs outside of HubSpot. One of his newest missions was to integrate Salesforce, and I wanted to see how that was going  

Harris Kenny:
Well, so okay, I didn’t cheat, but I did maybe bend the rules of what maybe you were thinking a Salesforce integration is because there’s two ways to integrate with Salesforce. And we did a connected app, which is essentially a private unlisted app. And so that allowed us, and this is what we did with HubSpot too. It allows us to sell to Salesforce customers. They just basically create their own authorization for our web server to hit their Salesforce account. So that was how we moved so fast. And then the other thing we did was we started with a tiny, tiny, tiny footprint of what it does. And so we just solved a very basic problem of we log emails as activities. Do you want that? And enough people were saying, yeah, that they’ve started paying. So we have multiple paying customers. We’ve got a mid-market company that we’re in procurement process with now who wants that, and then another one who has said, Hey, I’m going to sign up for this probably in the next week. 

So I think that we’ll go from $0 in Salesforce revenue to probably like 2K MRR probably by the time we hit January, all of that closing basically over the course of a month. And then if we do that, if all of our other numbers stay the same, I’m just doing quick calculator math here, that’ll end up being like 15% of our revenue. So that’s pretty cool. But we’re using Salesforce brand as distribution, but not the app exchange. The same thing we did with HubSpot. I talk about it on LinkedIn and I talk about other agencies and I say, if you use HubSpot, we can support you. But the HubSpot thing, I was really, really, really, really proud of getting that, and that was cool. But we were selling a HubSpot app for over a year before we were in the marketplace, and I think we’re going to do the same thing with Salesforce. It literally fast could be a year, and that’s moving  

Rob Walling:
Fast. That’s moving fast and getting a V one out there, and then you built thousands and thousands of MRR. I mean, you could have supported yourself almost full time on the business and didn’t have to wait for any of that. And this is what the best entrepreneurs do. They get it done real fast and then they turn around and say, all right, well what’s V two? Well, V two is getting in the app marketplace. Then we get promotion and all that. You got into even the HubSpot app marketplace, it felt fast to me. I don’t know what the timeline was,  

Harris Kenny:
But yeah, I had only took two weeks. Crazy. We were so ready. We blew past their request.  

Rob Walling:
You already had paying customers on it. Normally you go in the app marketplace with no customers and then they’re like, Nope. Testing for months and you need to have this many beta users and you already use it through it. That’s another  

Harris Kenny:
Example. Exactly.  

Rob Walling:
And you said, and I quote, we are the first smart lead integration in the HubSpot app marketplace, and you sounded really proud of that  

Harris Kenny:
Before even Smart lead themselves.  

Rob Walling:
Yeah, before their own integration, you beat smart Lead. So that’s got to be a pretty big point of pride for you.  

Harris Kenny:
Oh, for sure. Yeah. I think we’re shipping really fast. I was in the chat with the founder of Smart Lead and he was like, you Ship, which they have a great engineering team, so I know he really means that as a compliment in their world, they really value engineering. We move fast and we’ve got two other sales engagement platforms that I think are going to potentially open up market for us. It’s the same core product, but competitors to Smart Lead. And I think again, we will be the first integrations listed for those tools. And I think that when we move, our positioning is going to change to be like, Hey, if you’re using one of these outbound tools, we’ll be the one that gets it in your CRM the right way. I think we’ll be able to charge more. That’s kind of what’s on the horizon. But I think that this play that we just ran Smart Lead, I think we’re going to run twice again for two other tools. And now I’ve got people being like, do you support list? Do you support this? Do you support that? And so we’re starting to get a wait list forming for other tools, and that just kind of feels like to me, again, we’re in these more advanced stages of becoming a real company call that market  

Rob Walling:
Poll where it’s like, and you’re getting data because you’re like, oh, we have three requests for limbless and we have two for this other tool. I don’t know the baseball enough to know, we know what the tools are, but two for this other tool. And then it’s not necessarily you build the one that has three and not two, but it’s a signal that you didn’t have two months ago. And so now you have all the CRMs on one side and you have all the what? Cold email tools I guess on the other side, right? That’s what you’re thinking.  

Harris Kenny:
But could be LinkedIn, could also be phones.  

Rob Walling:
Yep. So there’s a lot to be done here. And this is one of the reasons we invested in you and invested in this business is because in you, we asked ourselves, do we think he will figure this out? You were early, right? We don’t know if the business is going to work. Do we think that Harris can do this? And the answer was, yeah, I think he can do it. And then why did we invest in the business? Because it had traction, it had people that wanted to pay you, and I see the potential of this to be a seven or eight figure error or a company not with the initial product you had. It was what smart leads to HubSpot and it was very simple and it was first Zaps and then you had someone write, I mean that’s not an eight fit your business, but all the division that you’re starting to paint here and the request, the market pull, you’re starting to get that absolutely could do 10 million or more in a RR.  

Harris Kenny:
Yeah, I believe so. And I will say I think this, to me, this is why TinySeed is different. It is still fundamentally a venture endeavor. The risk of investing at the time. I mean, it reminds me of when my wife decided to marry me. It was like the rest of your life are you, are you sure potential? You see potential? Yeah. I’m not sure that I would marry me at this point. We got married, not super young, but it was a while ago. We’ve been married for a long time. But yeah, so it’s fundamentally there was a risk there. And so yeah, I feel like you all took a chance on me and it’s been cool.  

Rob Walling:
You’re making good progress, man. Looking ahead over the next one to three months, we will record in the next one to three months. What are you most excited about?  

Harris Kenny:
I believe really firmly that we are ahead of the market. I think that the users that we’re signing up and the prospects we’re talking to today represent the very beginning of a big chunk of a bell curve of the market that’s going to be changing its process. We have taken customers away from outreach and they’ll do a demo with me and I show them the reports and how we put the data in their CRM and they have said, okay, great. What email tool should we use? I don’t even care. I just need the data that you are giving me. And so to be taking customers from outreach, which is a unicorn, arguably created the sales engagement platform category to be taking users from them as a connector app, which I think we’re doing more than that or solving deeper problems than that. To me that’s a really big deal. 

And we, we’ve got two customers, one we just closed and another one that’s about to close that were like this and they’re like, whatever, however we need to send the emails. I just want the way that you are putting it in that system. So I think we just keep moving down that path. I think there’s a lot more people to come basically. And I think the people we’re helping right now, early adopters. And so if that’s true, then I think we’re going to have really good mojo. I think we’ve got some really good agency partners, and I think that when we add build out Salesforce, and when I start talking about Salesforce more and posting about it more, and when we add some of these other engagement platforms, I think that we will start unlocking more pieces. So I’m really confident in that potential, and I think people are spending a lot of money on their tech stacks, not able to answer the questions that we’re helping them answer. And so I need to figure out how to become a more mature product marketer to capture that, because I talk to customers who get it, but can’t trust. I can’t wait for everyone to get it. 

But I think that’s where the opportunity is. And I think that when I look at where we’re taking business from, it’s not just people who are using Zapier right now. It’s people who are spending a lot more money on much more sophisticated tools being like, yeah, but this still isn’t really solving my problem. And you are. That is like, okay, cool. It’s super motivating. Outreach is fine. Maybe we’ll integrate with Outreach. I have no beef with ’em. Like whatever. It’s just a B2B SaaS software, who cares? But the competitive side of me is like, okay, yeah, we’re doing something. We’re making a mark, we’re getting people to switch, which is cool.  

Rob Walling:
What started as a simple connector app has evolved into something much more ambitious. Harris Harris’ finding his product isn’t just competing with simple automation tools. It’s pulling customers away from industry giants. And in today’s market where companies are scrutinizing, every dollar spent, their tech stack outbound sink seems to be resonating. The question is, how far can this unexpected momentum take him? Find out next time on TinySeed Tails. I hope you enjoyed this episode. If you’ve ever wondered what it’s really like inside TinySeed and want to hear a raw candid coaching conversation between Harris and I, we put together something special for you at TinySeed dot com slash bonus. You should check it out. I’ve never released anything like this before. I hope you enjoy it. It’s at TinySeed dot com slash bonus.  

Rob Walling:
You’ve stumbled upon another episode of Startups. For the Rest Of Us, I’m Rob Walling, and in this hot take Tuesday, I welcome back Einar Vollset and Tracy Osborn as we talk about chat GPT five and the struggles they’ve had with that release, whether we’re in an AI bubble and a few other relevant news items, one of them actually deeply relevant to SaaS sales. Before we dive into the episode, I wanted to let you know that TinySeed applications are open for the Fall 2025 batch. If you’re a B2B SaaS founder with at least $1,000 in MRR and you’re looking for the right amount of funding, a community of ambitious like-minded founders and a network of world-class mentors, you should apply If you have any questions about the program or the application process, we’re also doing a live q and a with the TinySeed team this Wednesday, September 3rd on YouTube. We’ll link that up in the show notes. If you know your metrics, the application only takes about 10 or 15 minutes to complete applications close on September 9th. You can get all the details at TinySeed dot com slash apply. Alright, let’s get into it. Welcome back to Hot Take Tuesday. I have two guests, my recurring panel, and this is by popular demand and by that I mean two people have mentioned it to me in the past six weeks saying, why don’t you do Hot News Day anymore? And I was like, I don’t know. People have been traveling, it’s been summer. So here we are. We’re going to cover stories ranging from, well, it doesn’t, everyone want to hear us talk about American politics and crypto. 

We’re not going to do either of those things. We’re going to be talking about I he did. He’s like, I want to talk about both GPT five. Is it worse than 4.0? Are we entering an AI bubble with the limits that folks are starting to put on it? Windsurf and that whole debacle of employees getting hosed and more topics. First, I’d like to introduce my panelists, the head of product for TinySeed and MicroConf, Tracy Osborn. That was awful. That was awful.  

Tracy Osborn:
Do you want to do that again?  

Rob Walling:
Welcome to the show.  

Tracy Osborn:
I was going to say last time I was here I was wondering if you’ve realized I have a title change since the last time at this time. It’s been that long.  

Rob Walling:
It’s been a while. You used to be Tracy makes on Twitter and that’s where we’ll leave it. No wait, you’re Tracy at Tracy Osborn. Where are you? Tracy Osborn dot com on Guy. I am. Okay. And we’re still counting down the days until you owe a and RA thousand dollars and buy us both sushi dinner that was in there, right?  

Tracy Osborn:
Sushi, we never determined what the terms were between Twitter. We did. We did. Oh god.  

Rob Walling:
We did three years and I think it was a hundred million sign up. It wasn’t even active. It was like 50 or a hundred and we kind of balanced, I think it’s a hundred.  

Tracy Osborn:
Elon Musk has a lot to go. So I remain hopeful  

Rob Walling:
That other person chiming in is our very own a r volt co-founder of TinySeed, the founder of Discretion Capital, the best sell side m and a firm for SaaS between two and 20 million. A-R-R-A-R Volt. Welcome to the show.  

Einar Vollset:
Thanks for having me.  

Rob Walling:
Alright, let’s dive in to our first story. This is actually story zero and we’ve been talking about this for the past couple weeks and getting a lot of positive responses is what I would expect on X Twitter and the like. TinySeed, our startup accelerator for ambitious B2B SaaS founders has returned fund one, meaning we have returned more capital to our investors LPs than they invested. This is a six-year-old fund and a RI believe with other benchmarks or with the benchmarks across venture capital funds. We are in the top 10%, potentially top 5% of funds of that vintage. So you want to talk, why is this a big deal? I’ve never run a fund before and I was like, oh, that’s neat. And then I’m like, no, that’s not neat. This is a big deal. Why is  

Einar Vollset:
That? It’s a big deal. I mean I think it puts us in the top 10 if not top 95% of that vintage and it’s not just like, oh, that was a really crappy vintage. The fact of the matter is that venture funds have gotten to the point where traditionally partly because of how tech funds, tech companies stay private for longer, that sort of thing, they get longer and longer and longer before they return any funding and certainly before they start return the fund and multiples on that. So actually I just saw there was a stat out about Carta where it says basically, and DPI is the term distributions to paid in and basically says over 12 years in only about half the funds have returned one XDPI. So what that means is if you invested in all the venture funds out there and you held it for 12 years, only about half those funds would even have returned your capital. 

So yeah, it it’s a big deal. And also I think crucially for us, it’s not just like you can return the fund and then have nothing left in which case yeah, wasn’t so great. But the fact is for us for fund one, we still have the majority of the assets are still growing. It’s a very good sign very early on. VC is funny in the sense that one career where people don’t really know and you don’t really know if you’re any good until 10 years in. So it’s a good place for charlatans and fast talkers. So we’ll see if that includes us. But yeah, it’s a very good sign and yeah, I feel very good about it. And also crucially, look, we return the money of the people who trusted us the first time around this was fund one, it was an unproven thing. A lot of people called us, this is really stupid, it’s not going to work out. You’re never even going to get your money back. And at this point we’ve proven wrong and we can tell those people to go themselves and give the people more than the money that they think back. They’ve already gotten their return on their capital with more to come. So that feels good.  

Rob Walling:
Yeah, really exciting. Tracy,  

Tracy Osborn:
The thing I didn’t realize before I started working here, because before I was a startup founder, I raised some money from VCs, but I didn’t really quite understand how VC economics worked. And the return to the fund is super exciting because compared to startups where you’re like you’re doing super well and you can reinvest those profits into the business and continue growing, we have to continually raise new funds. So if we have this massive success on our first fund that proves out our thesis and proves that what we’re trying to do is working and is working really well, that means we can raise more funds and we need to raise more funds in order to exist because we can’t, all the returns and whatnot, it’s not coming back. The TinySeed for us to invest in other people, we have to raise new funds in order to do that and then we live off, run the company essentially off those management fees. So on one hand it, it’s super awesome to return that fund, but it’s also for me it’s like, yay, I get to have a job for longer because of this. I like that part.  

Einar Vollset:
It’s also pretty strange. It’s like, look, investing is like this. You take people’s money and you’re basically saying, I’m better. I know better than you what to do with your money and you should give your money to me instead of doing whatever you want to do with it yourself. And being able to prove that out with actual cash in the bank instead of arguing about markups and paper, paper returns and all this stuff feels really good.  

Rob Walling:
That’s the thing, we came out with a thesis A that bootstrap B2B SaaS founders would even take money. There was a whole conversation around this in 20 17, 18 as I started talking about this at MicroConf and there was a real pushback from a small group, but why would they take your money? Why would they give up equity? They should spora. So there was that thesis. Then there’s a thesis of does this return even close to the s and p 500, right? Because if it doesn’t return that over what 10 years or whatever the horizon is, no one’s going to give us more money and it’s not viable. And so those were our thesis and obviously the first one has been proven because we funded 204 companies in the past six years and the second one, the signs are good, we’ve returned the fund and as you said, more than the initial investment. 

So folks are already getting returned and there’s still a lot of upside with that in mind. Fund three, TinySeed fund three is closing soon we have a little bit more room and if you are an accredited investor anywhere in the world and would like to put some money to work in handpicked high quality, I would say some of the best deal flow in B2B SaaS in the world head do TinySeed dot com slash invest and you can read our thesis and if you fill out that form there, it goes directly to a R’S inbox and he will reach out. Before we move on from this topic a R, the last post I put on X Twitter got a question from Daniel Westendorf and he asked, are you able to share the distribution of returns? Was the majority from a few portfolio exits or something else? And obviously we don’t give exact numbers, we don’t need to because we’re a private fund, but what’s your sentiment around this?  

Einar Vollset:
Yeah, the short answer is yes, it’s exits or partial exits from one or two or a small number of the portfolio. And that’s sort of very much in line with the thesis that we wrote ahead of actually fund two, which is like, look, this is still a power law type environment. It’s not like all the companies are going to grow uniformly at the same rate. There’s still going to be some companies that outperform to the point where, yeah, it’s obvious that this is what drives performance. And that’s sort of been proven out for us as well.  

Tracy Osborn:
And if anyone’s curious about what this all means, we do have this on our website. It’s like tiny c.com/thesis. So if you are a data nerd, definitely check that out. I think it’s really interesting, again, coming from someone coming from startup world coming into vc, seeing how these things work behind the scenes, check out our thesis if you want to read more.  

Rob Walling:
Alright, moving on to our next story. Something that’s on a lot of folks’ minds right now is GPT five came out what, two weeks ago and there is a lot of talk. I mean we have a Y Combinator thread or hacker news thread that we’ll put in the show notes, but you can go almost anywhere on the internet and just search for is GT five worse than 4.0 And it does seem like there’s a little bit of friction online. Tracy, do you have thoughts you want to kick us off on whether do you have firsthand experience with it or what’s your sentiment around what’s going on?  

Tracy Osborn:
I think I am definitely not a power user, but it was really interesting yesterday, well I guess in the last week because if I’ve launched and you couldn’t choose what model it was using, it was choosing in the backend whether it was going to be using the slower, more expensive whatever robot to answer your questions or the fast quick one. And then just yesterday I was using it again and they added those two things. I was divorced from the discussion on the internet about which one’s better or the other, but I was like, oh, thank goodness you can finally choose. I don’t want it for me. I didn’t want it to choose and I wanted to pick. And then I found this whole wash of information of people screaming about different models and which one is the better one. And then people, it’s understandable if you are not able to choose which one, whether you want it to be fast or slow or using the expensive cycles or not because if you’re on a paid account, there’s this expectation of having the most expensive version. So I can kind of see why they monkey patch this back in the thinking, I guess they call it thinking or fast or the other two are. Anyway, my experience was just kind of seeing this in the last week being like, oh cool goodness. And then finding this bike on their friend and be like, whoa, it’s huge here. I am sure Einar has things to say though, so I think I should pass it over the him.  

Einar Vollset:
Yeah, I mean, yeah, I have opinions. There’s a couple of different things here like is chat GPT five better than oh four or 4.0 or however, whatever the name is. I mean I think it is, I use it a fair bit and I think there’s no doubt in my mind that GT five is very good. I think one of some more vindicating things for me is that I’ve been saying for a while actually in the talk that I was supposed to give at MicroConf Nola that Tracy you expertly gave, one of the points I make is like look, and this was about will AI kill SaaS, which has been a big question for the last couple of years since Chatty came out. It’s like, look, everyone’s just going to come so smart now, so soon that you’re never even going to need any SaaS. You just talk to it or it is just super intelligence and it’s like there’s all this stuff. 

And my point has been if you look at the data of how quickly it’s improving and how much it’s improving per step, it seems to me to be doing the opposite of what all these AI doers are talking about. All the AI boomers are talking about like, oh, it’s this sort of idea of foam or it’s exponential takeoff and it’ll soon be so smart that we’ll be ants to it. And I’m like, yeah, okay. But that’s not what the data shows. The data shows it’s reaching looks to be reaching some kind of asymptote. This asymptote could be very high, but still to me it seems like each new model that comes out, whether it’s from chat GPT or Google or Grok or whatever, it seems to be an improvement, but it’s a smaller improvement. It’s a smaller step up than the last one. And I think chat GPT five just sort of confirms that view in me in that look, this is something that, yeah, it is an extremely disruptive thing to technology. 

There’s a lot of stuff here that is disruptive. It is different. It’s capable in a way that it’s obviously a very new, very capable technology. But do I think we’re going to be amped to it in two years? Do I think we need to bomb data centers because otherwise humanity has ended because of chat g, PT seven? No, I mean that’s bullshit. It always was bullshit. If you looked at the data, this was crap. Honestly, when it came out, I looked at it, I was like, eh, there’s some really smart people that basically told me I was an idiot when I pointed this out. And there are just some fundamental scaling laws underneath the capability growth. That just means that as you make another step in capability, the amount of compute that you need to add to make it smarter as it were just grows exponentially. 

So you get a linear increase in capability with an exponential growth in compute and that just doesn’t work. You need a data center the size of the moon to get to the next step just by scaling and beyond that it’s like, ah, now it’s a data center the size of the galaxy, come on. It just doesn’t work that way. And so for our listeners, to a degree it must be sort of relieving to see that GPT five isn’t superhuman, isn’t going to reproduce any SaaS at any time with a flick of a button for 20 bucks a month. And so it’s more like, okay, this is an extremely capable technology that you need to stay on top of. You need to incorporate it into your SaaS business, you need to incorporate it into your business or you will be left behind, but you don’t need to become a plumber. I mean, nothing wrong with plumbers, but it’s not like technology as a job is over. So yeah, that’s what I think  

Rob Walling:
When a R had talked about the Asim tote whenever it was, you mentioned that a year ago or six months or something that resonated with me already because the first GT that I used, the first chat GPT that I used feels pretty similar to the one that I used today. It’s a little better. It’s obviously, but it’s improving in a small way. And I broke my own personal rule, which is never read the Hacker News comments because this is just a, there’s no article here, it’s just a Chad GBT is slow and no better than four. And it asks a question, but I did the first comment says, G PT five is better as a conversational thinking partner than 4.0. Its answers are more focused, concise and informative and it goes on. And probably that’s probably accurate. The thing that it reminds me of is we are thinking like chat GPT, the new model is going to be able to do everything better than all the old models. 

And that’s the difference is I think we’re getting to this point, I’m probably not the first person to say this, but where there’s going to start being GPTs just for this, if it’s like a brainstorming GPT and it’s optimized for that versus long form copy or short form copy or conversation or coding. There’s all these uses people are using it for and if it was a GI then maybe it could do all these things, but it’s not, and I don’t see a near future where that is. So I think the specialization of these models already exist obviously, but I don’t know that most people think about it that way and they just think new model better on everything. And I don’t think that’s going to happen.  

Einar Vollset:
I think that’s definitely true. I mean to the point where when DPT five came out, so I pay for the pro level, 200 bucks a month, whatever, and when it came out I was genuinely a little sad that I couldn’t talk to 4.5. That’s still, it’s like it almost, it has personality, some of it and I really like four or five. And so when they discontinued four or five, I was like, this is a right here because in some ways five is more capable in some of the tasks that I have it running on. But 4.5 was just a better conversation list. It just was. And so when it got it back, I was like, yes, thank you. I’m extremely happy to have and that’s true. I was a little sad when it disappeared and now I’m like, yeah, it’s back. It’s amazing.  

Tracy Osborn:
And also I want to say four or five also had, there’s some amount of, I dunno the right word for this is neutering, but it felt like it was kind of pulled back a little bit that they’ve in five now there’s some topics that we’ll talk about, but I believe also with five that it’s hasn’t been prevented from talking about certain topics as much as it was in four five. Have you run into that in  

Einar Vollset:
I thought four five was pretty, actually one of the interesting things is they said, what was it? Oh yeah, only pro users. So the $200 a month are going to be able to use four five from power in. And because it’s apparently is an extremely expensive model. And the nice thing about four five is it doesn’t have a thinking per piece. And it’s like when you’re doing back and forth, I don’t want you to be thinking, I don’t want you to spend a minute and a half thinking about the response you just to respond. And to me that seems to be, it almost feels like four, five is the, which I guess five is two, like the five fast maybe. Although that does seem a little brain dead compared to four or five, it’s like four or five seemed to me this is where the current paradigm is able to go with pure scaling without those kind of thinking hacks on top of it. That’s what it feels like to me.  

Rob Walling:
There was speculation on X Twitter about maybe it wasn’t speculation, maybe it was backed up with data or whatever, but it was kind of like five is less good, but it is because it’s cheaper and OpenAI is thinking about cost and there were folks kind of piping in with that. So maybe that’s part of it too.

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Our next story is kind of, I’m going to frame it as I don’t know, are we in an AI bubble? I think the answer is obviously yes with the amount of money flowing in, but the idea is what’s it going to look like as it pops? And I have a Reddit thread here, but this is another one where AI compute is essentially being given away for far less than it takes to produce, right? Open AI and and all of these are losing hundreds of millions, billions of dollars, whatever it is because they are buying something for a dollar and giving it away for 20 cents. So there’s a couple ways to think about this. I mean I know people got, developers got pretty angry online when suddenly it was like, wait, they’re limiting my, I don’t even remember what service it was. It was a cloud code or something. 

It was like, now I have limits on this thing. And it’s like, well of course, because you’re probably chewing up $500 worth of AI and you’re paying 20 bucks a month, this doesn’t make any sense. So that’s kind of a first topic. But the other one is it reminds me there are a lot of wrappers and a lot of SaaS apps that I think where AI is at their core, where all they’re doing is taking AI and taking these virtually free, almost free compute credits and doing things with them that if they were actually charged what it cost, it would be completely ridiculous, like creating headshots for me or creating thumbnails or creating internal building or outside any of these small image things or the conversion things. I think if you actually had to charge with that really cost, these are unviable businesses is my hypothesis. And that’s what I want to throw out to the panel is if you have thoughts on that. Let’s start with you A, what are your thoughts here?  

Einar Vollset:
I think it’s hard to tell. It’s one of those things where I think actually, okay, yeah, it’s expensive now, but again, I think a good enough capability is probably achievable on a self-hosted model. And for a lot of these businesses in certain times, certainly with fine tuning and as you talked about, you get different models, specializations. So yeah, maybe these startups, they can’t just do whatever, just do API calls to the latest model to chat GPT, and as they crank up the cost there, maybe that’s become sustainable. But I also think, okay, if it becomes so expensive that your model doesn’t work well then given the specialization you’re in, and particularly if it’s something like a very specialized vertical SaaS thing that you’re doing, okay, you can probably get as good if not good enough models by getting your own model, open source model, fine tuning that, really honing it towards your use case, which honestly, to be honest with you, some of these companies probably need to be doing anyway or thinking about it once you get to scale and you’re a certain size, okay, really you just want to be, if this then that plus API calls to open, okay, well then they have you buy the balls versus if I had a 20 million A or business that was doing that right now, I’d be like, hmm, yeah, let’s spend some money and some time figuring out can we have our own open source model? 

What does it look like to fine tune that model so that we can host it so that we can really control the whole stack is what I,  

Rob Walling:
Yeah, there definitely is. It is interesting. I want to pass it to you in a second, Tracy, but that makes me think that these underlying AI provider, the L-L-M-A-P-I providers, I imagine that what happens when they do GPT dash cheap and we know that it’s like the one oh or two oh version, but it’s a fifth or a 10th of the price. And to your point, and it’s good enough to do a lot of stuff, it was good enough 18, 24 months ago, but it’s way cheaper. So that could be a thing of the future where we haven’t really gotten to the point of really thinking about cost because I paid 20 bucks a month for chat GPT and I don’t even think about it. And if they charge me 50, I would still pay it, but I don’t know the cost is out of line. I don’t think it’s anything that a lot of us are thinking about. I don’t think about the cost of AI these days. How about you, Tracy? What are your thoughts here?  

Tracy Osborn:
This is the place where if you’re a founder of building tools and services off of ai, a lot of folks are doing that right now and the people a couple of years from now, if you’re thinking now about what are the risks and you’re seeing these changes come down the funnel, you’re seeing things become more expensive, you’re seeing maybe you’re not going to have as much functionality as before. You can’t just build right now and assume it’s going to be that way forever. So the people who are thinking about it today are the ones who are more likely to be living still existing a couple years from now because they already have the expectations that this is going to happen. It’s going to get more expensive, it’s going to get harder to use. You need to start putting the work in today to future-proof yourself. 

And if you don’t a couple years from now, it could be like, oh wait, I built this whole business on the fact that this was really cheap and now it’s gone away and oh, my business is over. This is so sad, not so I was like, think today changes are happening so fast that thinking of different ways to differentiate yourself, think out different ways of how do you get that data, how do you provide that data to your customers? What can you do to futureproof yourself is going to determine who’s going to be still around in a couple of years versus not.  

Rob Walling:
Our next story is about Windsurf, which was a venture backed startup that do I need to say allegedly, allegedly screwed its employees, but we will link to a tweet from one of the employees who basically said, I was employee number two and I’ve worked on AI and code for years and all of my options, my vested shares, I basically got 1% of that value. And the quick summary of this, I mean it’s kind of complicated, but open AI in July, early July of 2025, almost acquired Windsurf for $3 billion, but the deal fell apart. Google swooped in and Acqua hired, and again, I don’t know if I need to say allegedly what are the facts here, but Google struck a 2.4 billion arrangement, a non-exclusive license to windsurf technology. They basically gutted the company non-exclusive license, but they hired the CEO, the co-founder, all the key r and d leaders, but no equity or control of the company changed hands. 

And so then another company cognition jumped in and acquired kind of what’s left, which to me feels a bit like a shell of a company, but early employees are like, I got nothing. The investors and the founders supposedly roughly half of that 2.4 billion. So obviously 1.2 billion went to investors and founders and there were some money left in the company. But again, it feels kind of gutted and really what I want to talk about here, it’s an interesting situation because it feels like the social contract of Silicon Valley was violated, and we’ve heard little stories about this over the years. I think toptal is either an LLC or maybe they raised a safe and they never converted it to equity and allegedly the founder just never converted it. So no one actually has equity even though they invested and is just taking money out of the company. 

Again, allegedly. But in this case, people did get screwed and oftentimes when I read these types of stories we talked about on this show on a hot tech Tuesday, the founders of one of these betting sites, how it sold for a billion dollars and they didn’t get any money years later. And we talked through how that actually works and usually they don’t report the whole story is what happens. It’s like, yeah, they sold their shares or they took secondary out early on, or they raised hundreds of millions and that diluted themselves into nothing. There’s usually more to the story than they actually report, but in this one I feel like the employees got screwed and this is kind of So do you want to kick us off a R? What are your thoughts on what happened here? If this is a precedent? I mean if this is dirty pool,  

Einar Vollset:
I mean I have to admit, I in shock when I first read the story and it’s still like it’s got to be Is it a breach of the social contract in Silicon Valley? Hell yeah. Hell yeah, it is. Are you kidding me? It was supposed to be a $3 billion. Imagine if you’re the employee, right? You sit around and you’re like, oh crap, we’re being bought by OpenAI for $3 billion. I’ve made it. I’m doing options math. What Porsche am I buying? I’m buying the Tahoe place immediately or do I wait six months? Things are good. And then you come in and you’re like, oh, the deal fell apart. And the founders and some people like the selected ones are getting almost as much money or maybe more and going to Google and I’m behind with the Unchosen ones in this company now where Google owns a license to what? That’s not cool. Even if there was some argument they were saying, look, they put a hundred million dollars investment into the company and this was the equivalent of what the leftovers for the people and you could have divot that out and they chose not to blah blah, blah. I’m still like, yeah, still you got is what you did. You got  

Rob Walling:
It is not good at all. I think it’s bad precedent and I hope this is not something that people start doing. Tracy, what are your thoughts  

Tracy Osborn:
As someone who has been in around Silicon Valley since it’s way too long? It’s really funny looking not funny. Haha, back in the day in the early two thousands and these first employees, the first employees, big things were happening. These first employees are also becoming millionaires and whatnot, but it feels like over time investors and acquiring companies have figured out, I don’t know, this might be hearsay, but it feels from my perspective that there is now a bag of tricks that they have. There’s all sorts of little tweaks and little rules and contractual things and things you can put into term sheets and whatnot that make it harder and harder for these first employees to get any sort of winnings from things like this. And it does suck. It does feel like that social contract is broken because people come into Silicon Valley and you’re going to join a startup and you’re going to get rich and it feels like it is getting harder and harder for that to actually happen. And the only way, like you said, so join a F company as an employee, you just make more money. You don’t have to worry about any of this or you’re startup popping and increasing your salary that way, but it’s hard to expect or you can’t really expect anymore to have this big payout from your startup that you joined as an employee number one, and now the founders are making bank  

Einar Vollset:
Well. So I don’t disagree with that. I mean to a degree I don’t disagree with it. I think there’s always like, look, there’s a difference between a company sort of not going all that well, like a soft landing type stuff. And in those type of situations, quite often it’s like the founders get taken care of. The founders end up with some sort of a package because their buddies at Google Acqui hired them and they’re now worth, look, they got not billions but multiple millions or even 10 million over time if they stayed employee versus yeah, in that case common shareholders are wiped out and it’s just like, look, you got a job, good luck.  

Tracy Osborn:
I mean you’re probably hearing all this stuff about everyone fetching about Phils in the Silicon Valley, right?  

Einar Vollset:
Yeah, yeah, exactly.  

Tracy Osborn:
All the elderly employees were like, no, but Phils was an example. They were not doing well when you looked at their actual numbers, and so they just got bought by PE and everyone underneath was wiped out anyways.  

Einar Vollset:
Yeah, there’s numbers of stories and there’s all sorts of things, but it’s like to a degree, there are other scenarios too where you see this often with private equity type buyouts and more equity hire type buyers, whereas this actually, actually the investors are getting screwed where it’s like they come along and they say, look, we’re going to buy this company for 50 or a hundred million dollars, but actually we’re going to pay 3 million for the equity or one X on the equity and the rest is carved out for retention. That happens too. And really what it boils down to is it’s about what the founders decide to fight for. That’s what it’s about, and that’s just what it is. My sort of view on this is like, yeah, does it reflect badly on the Wind source founder? Yeah, I think it does.  

Rob Walling:
I think it reflects poorly on Google’s part too, and I think it was Deep Mind, which is, I don’t know if that’s a company or a department within Google, but I think anytime employees, one of the great things, Silicon Valley has done a lot of good things and a lot of not good things. And I think one of the good things it has done is allowed folks, whether you’re a founder or whether you’re an early employee to participate in upside of companies. And there’s a lot of places in the world where that doesn’t exist. There’s a lot of places in the US where that doesn’t exist. And I think Silicon Valley has tended in general over time to do a decent job of that. Not perfect, but this is, and I think it’s a real problem,  

Einar Vollset:
I think because the big difference, this is not like an acqui, well, it’s on paper, it’s an acquihire mostly because of regulations around who can buy what. But it’s like the original deal, which was a successful holy crap, that’s a big number deal. It was 3 billion. The Google Acquihire is 2.4, that’s ballpark, same number. So you got screwed as if this was a soft landing for the founders, but it was a massive payday for the founders. That’s the big difference.  

Rob Walling:
And I think there are only with the middle class declining in the us, which is a major problem, there are only so many opportunities for unquote the American dream. Does it still exist the way it did 60 years ago, 70 years ago? I don’t think so. And I think that that’s a problem  

Einar Vollset:
I’m going to disagree on here. I actually think one of the interesting stats about this declining middle class stuff is actually, yeah, the middle class is declining, but that’s partly because the upper class expanding,  

Rob Walling:
Is it?  

Einar Vollset:
Yeah. Yeah. So it’s like, look, the middle class is declining, but also because people are getting richer, smaller  

Tracy Osborn:
For percentage of people are getting richer while a larger percentage are getting part,  

Rob Walling:
I think a larger, yeah, I think people struggle when I go to get gas or buy avocados, I’m like, if I was making 20 bucks an hour, how the fuck would I afford this stuff? It’s crazy expensive. Yeah, that’s true.  

Tracy Osborn:
But good for those people who are getting rich.  

Rob Walling:
Yeah, I mean  

Einar Vollset:
Billions of dollars. Well, I mean, what are the craziest things about me lately? What are the truly holy crap bananas thing for me is what Z’s doing with poaching AI  

Rob Walling:
Researchers. That’s insane.  

Einar Vollset:
People are getting paid, if that’s true. I started reading these numbers. This is no one’s getting paid out million.  

Rob Walling:
What? The  

Einar Vollset:
Million dollars?  

Rob Walling:
I thought it was a hundred million dollars where the complete package, including equity and salary and all this stuff for multiple AI researchers as a salaried employee. Yeah, it’s  

Einar Vollset:
Unprecedented. Hey, Z, if you’re listening to this, I would totally leave behind TinySeed for a hundred million dollars package  

Rob Walling:
If you need a podcaster and a voice of ai,  

Einar Vollset:
A really opinionated Norwegian, actually, I think I probably do it for like 99.  

Rob Walling:
Yeah, give you a discount.  

Einar Vollset:
Oh my gosh.  

Rob Walling:
Yeah. Special  

Einar Vollset:
Discount. Yeah.  

Rob Walling:
And to be clear about the previous story with Windsurf, I obviously more than anyone, I don’t begrudge any founder to want to change their life or to get rich building a company. I think capitalism and democracy have done a pretty decent job of that. And if anyone believes in it, I do. But this in particular, these kind of edge cases where people get screwed I think is a real problem. And my hope is that it is not something that continues. Our last story of the day is more of a SaaS focused, not news of the world, but it is an article on founder labs.io how to sell if your user is not the buyer, for example, your developer is a user, but the CT O is the buyer, and this is by Nate Riter. And we of course see this with TinySeed companies. Where it’s easiest thing to do is if you are a bootstrap founder, you are patient zero meaning you have the need, you validate it, and then you build it for you exactly who uses it, how they use it, and then you sell it to those people and it’s one user and they make the decision that is the best scenario with B2B SaaS, but it’s I would say probably the minority of SaaS that we see. 

And so at a certain point, you do have to learn how to sell to folks who are not your end user. And Nate talks through some thoughts and best practices. Tracy, what are your thoughts on his piece?  

Tracy Osborn:
I love this. I think it’s, like I said, we see this a lot with TinySeed and a lot of people are like be like, why can’t it be easier than this? Why can’t these people just pay for my, but they have to go through all these hoops where they have to talk to their manager and their manager has to talk to the buying team, and they’re like, well, by talking to this developer that’s saying how this would be such a great win. But then they as the founder and as the owner of this tool are divorced from being able to be in the room with those decision makers. This article does a really good job, I think, of explaining what you could do as the star founder in your product to make it easier. A couple of the things that I mentioned I thought were really great was if you think through this and you’re able to build ways, tools and resources for that, the non-buyer, the person who’s using using your product, make them tools and resources or things that they need to convince their leadership, you should do that. Think through three steps ahead. You have to do a harder sales process in that way and think through what the entire sales cycle is like and see through what tools you have on your end that you can give to those folks to help ’em make the deal and just talk to people. But I know those are just kind of like band-aids. I’m sure Einar has some thoughts here. As a true salesperson on this three person team, Einar, what do you think?  

Einar Vollset:
I thought it was a good article. There’s a bunch of stuff to this. I think for me it’s more like, it’s more like, yeah, I don’t disagree on this. And I think at a higher level, I think a lot of particularly bootstrap founders, they struggle conceptually or culturally or whoever. You pointed out this notion that a lot of them, not all, but they just want make money when they’re sleeping. They don’t like buying. They’re not the typical enterprise software buyers. And so they can’t believe that somebody doesn’t want to go to a sales page and there’s the pricing and you just click and put your credit card in, and why isn’t all software in the entire world? Why isn’t everything like this? They think it’s a dark pattern to hide pricing and call sales is a dirty word and all this stuff. And the fact of the matter is almost 100% of the time, okay, let’s call it 80 90% of the time, if you think you’re different, you’re probably not. 

You can get to, I would say 1 million, 2 million, 3 million of a RR somewhere in there for a lot of vertical SaaS businesses. With that sort of self-serve model, you can differentiate the pricing and you got to figure out, there’s a lot of stuff, don’t get me wrong. There’s a lot of stuff you got to get right to get to that level too. But a lot of businesses, once they get to that stage, if you want to keep increasing your growth and take from that one to 3 million up to like 5, 10, 15, 20, you really need to start unlocking enterprise sales. And what that means is dealing with issues like this. And the fact of the matter is a lot of founders just don’t want to do that. And actually, and shout out to Jason Cohen, friend of the show who he put out a new metric here on the max MRR that I thought was quite interesting. 

And it’s this notion that given where you’re at in terms of your churn rate and all this stuff, how much new MRR you’re booking, what is your exit max, MRR, where is your atom tote to pull back to an earlier point? And the fact of the matter is you can do that math earlier on. You can know, given where I’m at now and the kind of new MRR and booking and the churn rate that I’ve got, once you get to a certain size, you can do the math and know where you’re going to tap out at that. And fundamentally, you need to bend that curve. You need to change those metrics. And those metrics typically landed like, okay, you landing larger accounts who churn less? That’s just the way it is. And what also pisses me off sometimes is I see these founders, they get to 1 million, 2 million, whatever, and they’re like, this is like, I can’t figure it out, or I just don’t want to do anything more. 

And then basically, if you don’t do anything more, you’ll stall out and your business is worth less and less, even though you’re maybe growing slightly or they’re like, I’m going to sell to this private equity group that comes through the door and they’re like, whatever they’re paying, but I don’t care. It’s for good money. And the fact of the matter is a lot of these groups, what they do, this is what they know how to do, is they figured out, look, if you got it zero to one and you got it to a million or two or three and you didn’t build out an enterprise sales effort, and it’s clear that it could do so much, so much of the value of what you created compounds to them very quickly, you could have spent five or six years getting it to one or 2 million and then they buy it and then two, three years later, they make 80% of the money.  

Rob Walling:
This is why when founders are listening to advice on the internet, you need to ask what’s the source and what are their goals? It used to be, well, we’d see all this funded, like the VC backed advice for startup founders. You have to go after a billion dollar market and you have to have to have and bootstrap founders were doing this and be like, I have to go after a billion dollar market. And that’s where I came in and was like, no, stop doing that. You’re a bootstrapper. You don’t need all the stuff that you see venture-backed folks saying. And that’s why if you listen to any of the big VCs, there’s usually some nuggets of truth, but there’s a lot of bias towards becoming a unicorn or a deck of corn. And a lot of that stuff will actually break a bootstrap company. But even within bootstrapping, I had this realization, well, it’s about eight or nine years ago, that there are the lifestyle and the ambitious bootstrappers, this is the way I term it, right? 

And lifestyle bootstrappers are more like the indie hackers where it’s like, I don’t want to do stuff I don’t want to do, and I just want a business that’s, I’m willing to limit my growth and my aspirations based on my comfort zone, how much I want to work, whatever it is I want my lifestyle to be. Number one. I was that until about 20 11, 20 12. And then when we started Drip, I realized, oh shit, I have a tiger by the tail. This could be life changing. I’m going to switch. And I went into a different mode where I then sacrificed some things. I worked more than I should have. I sacrificed some of my quality life for a few years in order to get rich is basically what the thing was. And that’s I think, something that folks miss online, and you’ll see it on X Twitter, you’ll see an indie hacker arguing with someone who wants to build a $10 million SaaS. And really what you need to do are different in those two cases. And so you can say, well, you should never do this. You should always do this. And it’s like, well, not if I’m designing my life and my company a little differently than yours.  

Tracy Osborn:
I wanted pop in here just to triggered a little thought in my head in and around sales that I’ve been doing sales for our new product in tiny C, we have a SaaS institute. We’re working with 1 million plus a RR founders and bringing, we have the accelerator, we have this process of way do we grow our companies for the accelerator we’ve been doing for the last six years. We have this new product that where it’s like mentorship advisors and coaching, coaching facilitated masterminds in SaaS Institute, and I’m doing the sales for that. This is brand new to me. I love to build products. I haven’t really done sales before. I’ve been talking to founders within TinySeed for the last six years, but how much people hate sales. And the thing that really changed my perspective on this is that thinking about sales, it sounds kind of silly, but it’s like sales is everywhere. 

Sales is just understanding the perspective of the person you’re talking to, understanding what they need and figuring out on your end how to give it to them or how match their needs. And so if you’re talking to someone who is not necessarily a buyer, how do you give that person who is not the buyer, the tools that they need to make this happen? When I’m talking to someone and trying to convince ’em to spend a couple thousand dollars a month to join our coaching program, what can I say to reassure them of the value of that? What do they need in order to be reassured that value? This kind of has leaked into my thoughts for everything I do when I’m talking to Rob about my job. A lot of that’s sales too. What does Rob need? He’s shaking his head at me. What does Rob need? 

What do Rob and Einar need? And when I am talking about what I’m doing in my job and would I want something, how do I freeze that in a way that I am reassuring them of the things that they need, but I’m also getting what I want? And so when founders come to me and they say like, oh, I don’t like to do sales. I think that a interesting way of rethinking it is it’s not a scary process. It’s literally you kind of have to think one step ahead. The person I’m talking to, how do I get them what they need? How do I understand what they need and how do I get it to them? And then sales becomes a lot easier when you think of it that way.  

Rob Walling:
Tracy Osborn, people can find you on the internet at Tracy Osborn dot com and of course, Tracy Osborn dot com. On Blue Sky, you’re broadcasting to us live from the gift shop of a 1980s ski lodge. Thank you so much for making the show today.  

Tracy Osborn:
It’s true. Glad to be here.  

Rob Walling:
Einar Vol set you, of course are posting and arguing about the Giants on X Twitter at Einar vol set. We will link that up in the show notes. You of course,  

Tracy Osborn:
Do not judge us by his Twitter feed.  

Rob Walling:
Yeah, no, no, no. His opinions do not reflect that of Tracy or a TinySeed. Einar is, of course broadcasting from a discreet garage where he looks like he’s about to hold the annual meeting of his Rotary Club. So we will wrap it up here. Einar, thanks so much for joining  

Tracy Osborn:
Sweet Burns at the end,  

Rob Walling:
Sweet Burns. The other joke was, I’m expecting to see your Bowling Trophy collection appearing just off camera inside the wood panel behind you. All that said, you too. Thanks for joining.  

Tracy Osborn:
Yeah, glad to be here.  

Einar Vollset:
Thanks for having me.  

Rob Walling:
Hope you’ve enjoyed this episode of Hot Take Tuesday. If you liked the show format, please give me a shout on X Twitter. I’m at Rob Walling, and if you look at the Startups Pod Twitter account, you’ll see a tweet with a video clip from this week’s episode that I typically retweet. Just chime in there and say, I really enjoyed this episode. You should do more of these, because I don’t know, the last time we did one, it was probably six months, and I’ve gotten a couple requests over time to do it, but I often just kind of forget about doing ’em. So if you want to hear more of these, let me know on Twitter. Thanks for tuning in this week and every week. This is Rob Walling signing off from episode 792.