Josh

Rob Walling:
Welcome to the season finale of season four of TinySeed Tails. This is episode nine where we hear how it all turns out for Colleen and Hello Query. Before we get into this episode, if you’re a founder who’s interested in the right amount of funding without the unicorn or bust pressure to scale your SaaS to a billion, you’re probably a good fit for TinySeed applications just closed for our Spring 2025 batch, but you can get more details about our world-class SaaS accelerator at TinySeed dot com slash program and get onto our mailing list to be notified when our applications open in the fall. And with that, let’s dive into the episode.  

Colleen Schnettler:
I don’t want to have a five year side project. This is so important to me. I have so many friends and good for them that works with their life. I have actually, you know what? I have a five-year side project that makes $2,000 a month, right? And it hasn’t grown and it just sits there. I don’t want another one of those. I want to outpaced success.  

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 first startup accelerator designed for Bootstrappers. For the past two years, we’ve been following Colleen’s journey building. Hello Query. When we started these conversations, we hoped to document the path to success. Instead, we captured something equally valuable, the real raw experience of trying to get a business off the ground while most startup stories end quietly behind closed doors. In this final episode, Colleen gives us a candid look at one of the hardest decisions a founder can make and gives us a hint about what she’s working on next.  

Colleen Schnettler:
Well, Rob, the good news is I have tripled my MRR since we last spoke, and  

Rob Walling:
If I recall, it was like a hundred, 150 a month, and so you’re at five 40 or something  

Colleen Schnettler:
180. So although triple your MRR sounds really amazing, $540 does not a business make. So it’s been a lot of thought about what to do with this and every single one of those three sales, so that’s three new customers since we last spoke and we last spoke a couple months ago. Every single one was horrendously painful. I mean, it was follow up and follow up and follow up and onboarding calls and back and forth, and I just don’t see a repeatable path to getting new customers. That is sadly the truth. I had more people that said they were interested, like I said, three converted of that initial list, but every single person finding them has been just like a needle in a haystack.  

Rob Walling:
And I want to point out that that doesn’t mean it’s not a viable business, but it does conflict with the fact that we’re recording this in January of 2025, and last time we spoke, which I think was October, maybe November of 24, you said, I run out of runway by the end of December, 2024. So if you were in the position, you are now at five 40 MRRA year ago, two years ago, where you still had all this runway, I would say, well, you’re onto something. Keep pulling this thread. And if you’re like, I still have 12 months of runway from TinySeed money or what have you consulting, and I have the motivation, I’m going to keep going, but you have given this. Now, we started recording this podcast two years ago, almost to the day, and you were working on it for six, 12 months before that. So is that right? Are you almost three years into this?  

Colleen Schnettler:
So I appreciate that sentiment, but I would like to point out that I completely started over a year ago. So we’re talking different business, different tech stack. So when I look Atlo Query specifically, it’s really like 10 to 12 months old.  

Rob Walling:
And so with that in mind, we could say, well, it’s only a 10 month old business. You’re already a 500 MRR and you have a thread that’s being pulled, and some people are jumping on it even though it’s a pain to find them. So does that mean you should keep doing it or is it I’m out of money and I got to be done?  

Colleen Schnettler:
So that’s the hard part with these kind of small businesses is making that decision. One thing that is really important to me is I don’t want to have a five year side project. This is so important to me. I have so many friends and good for them that works with their life. Actually, you know what? I have a five-year side project that makes $2,000 a month and it hasn’t grown, and it just sits there. I don’t want another one of those. I want to outpaced success. That’s what I’m going for. And I think, although Hello Query itself is only about a year old, this idea because the previous business was a different iteration on this idea, this idea is three years old, and I am just not seeing the traction for the amount of marketing effort and sales effort and cold outbound I have been doing. I am just not seeing the traction I think I should be seeing if I was actually building something people want at the right time. And I think timing is important here too. We can get into why this business hasn’t worked, but I think timing is a big part of it.  

Rob Walling:
So why didn’t it work?  

Colleen Schnettler:
That’s a big question. And even making the decision to shut it down or keep going, even you asked me this a couple months ago and we had scheduled this podcast and I asked you to push it out. Do you remember? I was like, I’m not ready. I’m not ready to make that decision yet. Do you watch Ted lasso Rob? It’s the hope that kills you, man, every month starting in November, I was like, I’m going to shut it down at end of November and then I’d get a new customer December. I’m going to shut it down, got a new customer. So it’s just like, it’s the hope that kills you.  

Rob Walling:
Ask anyone who started a business and eventually had to close up shop and they’ll tell you it’s hard. You put so much time, money, and effort into making something work that walking away is a really difficult decision to make.  

Colleen Schnettler:
It was such a hard decision to make, but I think when I look at the opportunity cost of continuing this one customer a month, I mean, that’s not going to be outpaced returns. That’s a never ending slog. And that’s, I’ve been doing that for three years. That’s what I have been doing. So when I think about shutting it down, I think part of it is just my own exhaustion with this idea. And part of it is all the things that happened to get me to this point, why it didn’t work is a different question. And I have been thinking about that a lot.  

Rob Walling:
I often get asked, how do I know when to quit? And the answer is, I don’t know, but I have guidelines is really my answer. And part of my answer that I give is, are you just done with the business? Are you just exhausted? You don’t have any new ideas. You kind of don’t care about it anymore. There’s no track, and you’re just like, I don’t want to keep doing this. That’s one factor. There’s a bunch of other factors. How much traction are you getting? What are your mastermind, your co-founder, your spouse, your coach, whatever? What are they saying? How long have you been doing it? Do you normally stick with things longer than you should or do you normally quit things too early? What’s your personal bend? There’s a bunch of factors, but to hear you say, I’m kind of, it’s felt like a never ending slog, and it’s been that for a year or two, three years, it’s like, okay, I haven’t heard you put it in those terms before, but that tells me you are kind of done, unquote done. Yeah.  

Colleen Schnettler:
What is so hard about this? It almost feels like it might be starting to work. And you always worry, right? You always worry. You’re like, am I just one quarter away? I had three cold inbound this month. I’ve had zero cold inbound for six months and three people, one guy came through intercom and actually is paying me now. I’m like, oh  

Rob Walling:
My gosh. Yeah.  

Colleen Schnettler:
Is it working? I don’t know. It’s so hard because I knew if I had a crystal ball and I was like, I’m one quarter turn away. I’m on the right path, but I’m too early. I would slog along, man, I’m great at slogging. I can slog forever. What is so hard about this decision is it actually might kind of be working, but it’s working at this glacial pace. But you have to hold that in comparison to starting something new. Where to start something new would take me another year. You have to product, you have to build all these marketing systems, you have to build. There’s so much other stuff around a business. So this is why this was such a hard decision is because I have come so far, but also sunk cost fallacy. I can make a lot of more money doing other things. And that’s become so obvious to me recently that it’s like, do I really want to continue to pour my heart and soul and my time into this thing when people kind of seem interested?  

Rob Walling:
If you recall from our earlier episodes, Colleen and her co-founder split, I wondered how much she thought that impacted the success or failure of the business.  

Colleen Schnettler:
He was the database expert, and sometimes I wonder if he was still working with me, we would have his kind of database clout to be like, he said, it’s safe and everyone trusts him when it comes to databases. I think that was huge. I think he was building the tech, and so when he left, we literally lost anything he had created. I was completely starting over from scratch. I didn’t have a half build application. I didn’t have a design. I was just starting over completely from scratch. So honestly, I think it was a huge, huge blow. And Hello Query is my thing, and I take responsibility for how it hasn’t worked out. I don’t want to place blame, but I do think it is a big reason. It’s hard not to think. What if he had stuck it out? Could we have made this work together? I still kind of think we could have, which is kind of sad, but unfortunately it didn’t go that way.  

Rob Walling:
And then you told me offline, you use this phrase nerd famous in quotes as a potential contributing factor to the business not working. Describe what you mean by that term.  

Colleen Schnettler:
This is something actually you speak about frequently, but both my co-founder and I were very well known in our respective communities. We both spoke at conferences, we had a podcast. People loved us. And I think that brought us false positive signals because the reason after he quit, the reason I kept going with this idea is because it felt like we had all of these people who had said they were really interested. But looking back at those conversations, I’m not saying those people weren’t interested casually, but I think that was more they just kind of wanted to be part of something, which is awesome and exciting, and I super appreciate their support, but that doesn’t help us build a product business. Look at his success in courses directly ties to his popularity in his community. If you’re popular in your community, you do courses, you do coaching, that’s how you capitalize on popularity. And we were trying to build a SaaS and popularity doesn’t matter when you build a SaaS,  

Rob Walling:
Ta-da, build your network, not your audience. If you’re going to build a  

Colleen Schnettler:
SaaS, like someone has said this before, I’ve never heard  

Rob Walling:
This before. Yeah,  

Colleen Schnettler:
I think I continued down this path because I thought I had a list of 20 people ready to buy. Literally in close, I have this list of 20 people that says ready to buy. Do you know how many of those people actually bought  

Rob Walling:
One  

Colleen Schnettler:
5% close rate on your ready to buy list? Right? And I mean, these are people, I think what kind of amazes me about this whole thing is these people get on a call with me, and I’ve done so many of these calls now, I feel like I’m pretty good at filtering through bs, why someone wouldn’t actually buy the thing, and I just get ghosted hard. They get on a freaking call with me and then they ghost me. And so it’s the curse of the audience, but I feel like it’s a double edged sword because you wouldn’t have any initial interest if we didn’t have those audiences. So it’s hard to know. But I do think that’s part of the reason when Aaron quit, part of the reason I kept with this idea, even though this was not my idea and I’m not a database expert, was because I thought, oh, I got that list of 20 people that are ready to buy. So that was really where it kind of got me,  

Rob Walling:
Given everything that happened, I couldn’t help but wonder what kind of regrets Colleen had about Hello Query.  

Colleen Schnettler:
I guess I have regrets about the way I ran the business. I don’t have regrets about doing the business. I mean, I quit a job, a really good job, Rob, to do this business. It was a really good job. Oops, to do this. I mean, I regret how things worked out with my co-founder. I wish we had both been honest about what we wanted earlier. And that’s a lesson. My next business, I want a, I don’t really like doing it alone. I’m super lonely. So that’s a lesson I’ll take with me. I’ll be like, Erin and I made this mistake. I think we would both agree we made a mistake by getting caught up in all the things and not taking a step back and being like, what do we each need and what do we each want? So I’ve learned a lot about what I want in a future. 

I regret we didn’t handle our issues earlier, but I made some really big decisions that have put me in this position. A big one is you might remember I had that quarter million dollar contract when we joined TinySeed, which is probably why we got into TinySeed. But anyway, and I killed that a year in, you remember we talked about it, which seemed, I don’t regret that at all because the whole point of going through TinySeed was to put ourselves in a position to go big or go home. It wasn’t to ride this kind of comfortable productized consulting situation. So I don’t regret that. So I don’t have a lot of regrets. Just if you,  

Rob Walling:
That’s good. I think if you build a business or do any type of risky effort that doesn’t work out, you’re probably always going to have some regrets. And I think it’s important to not think that just because it didn’t work that you made the wrong decision, the outcome is actually separate from the inputs, right?  

Colleen Schnettler:
Yes.  

Rob Walling:
And there’s this great book by the winningest football coach of all time Bill Walsh. And the title of the book is The Score Takes Care of Itself. And throughout the book he says things like, and then I’d win a Super Bowl. And everyone’s like, you’re going to win next year. And he was like, good God, this is brutal. And he said, no matter what we did, no matter how hard we trained, we controlled what we could control and we let the score take care of itself. And some years he said, we had an amazing team and I was still a great coach, and we had Montana and Rice and we would lose the Super Bowl, and then other years we would win it. And I controlled what I could control and let the score take care of itself. So I think separating inputs from outputs is something that I think is often a more healthy way to look at it.  

Colleen Schnettler:
I like to think like that. I like to, I mean, to be clear, this totally sucks. I don’t want to sugarcoat that, but I do like to think about it. I went all in and not only did I go all in, Rob, I’m now doing it publicly on your podcast. So that’s fun for me. Only  

Rob Walling:
10,000 of your closest matter friends, only 10,000 of my closest friends, only tens, sorry, tens of thousands. I misspoke there.  

Colleen Schnettler:
Oh my goodness. So when Aaron quit, we had even talked about pulling this podcast. Remember? We were like, should we just shut this down? And then we were like, no, we’re going to ride it to the bitter end.  

Rob Walling:
We want to tell the real story.  

Colleen Schnettler:
I’m happy. I went all in on this. And I think you’re right. I controlled everything I could control. I did all the things. I did the marketing and the sales and the content and the following up and the freaking cold calling. I built the product. I fixed the product. I controlled everything I could control for, and I can’t control how many people sign up. I can’t control my MRR, and that’s a super bummer. I have worked so hard by myself, toiling in my office. And so it’s a super bummer, but I ultimately can’t control control that. And all I can say is I think there has to be an aspect of luck, a small aspect of luck here. And I didn’t get lucky, but maybe next time I will  

Rob Walling:
Probably heard me say, I feel like success is hard work. Luck and skill in different components and luck is a factor. It’s not the only factor. And I don’t even believe it’s the biggest factor, but I do believe that it absolutely is. And I also think hard work is something we all can control and put in the hours. There’s a skillset that you develop over the years that I think develops even faster once you’ve been part of a successful venture. Once you’ve done it, once you learn some things, it’s not that you can then apply that to the next thing directly, but it does build that skill muscle up. And until you have that, it can be hard. You can have a lot of hard work, and if you don’t have any luck and your skills are, you’re developing them, but they’re not quite at the level of someone who’s done this two, three times, it can be really hard to get past those uncertain days. The early days are so uncertain.  

Colleen Schnettler:
Yeah, I think you look back again, trying to figure out why didn’t work for me, it’s like did I not pivot enough? Did I pivot too many times? I thought I would be able to pivot myself to this working right? I thought it was ship modify, ship modify. And as we talked about at the top of the hour, if I’d started this two months ago, we’d be like, this is going great. So there’s just a lot of sunk cost and emotion. It’s kind of a mess. This whole business,  

Rob Walling:
After months of going back and forth, Colleen had finally made her decision. I asked her what that felt like.  

Colleen Schnettler:
On one hand, it’s nice to have made the decision because there were many, many times this year when I was thinking about it. Should I, should I shouldn’t I, should I shouldn’t I, right? So it’s nice to have decided, and I think that’s important to move forward. I mean, it totally sucks. It is awful. I feel awful. So I wanted this to work so badly, and so it not working is a big disappointment. But I also know that I’ll get to try again, right? I’ll be able to take all of these lessons I’ve learned and try again. And it’s not like it’s, I’m 65 and I’m like, oh, I don’t have the energy. I’m good. I could do it again. It’s hard to connect the dots. You can’t connect the dots going forward. You can only connect them going backwards. But I did start this thing, this SaaS marketing gym, which has been awesome. 

And I think it was funny because I started SaaS Marketing Jim with Leanna Patch, who is a brilliant copywriter. And we made a lot of money in a very short period of time. And I don’t mean that to be like, oh, we’re so great. I mean, compared to my SaaS, comparing this coaching, I was like, my SaaS has made $1,200 in the past year. This thing made $12,000 in four days. Clearly this is not Rob doing something right here. So there was a bit of that where it was like, oh, maybe this isn’t this thing that I don’t love. It’s not really a passion project for me. Maybe it is time to walk away. It’s still hard though. It’s still hard, Rob. It’s still very hard.  

Rob Walling:
And that’s the thing that I want to call out here is obviously we’re going to end this season on a high note or ahead at the future that you have as you write off into the sunset. But I don’t think either of us want to sugarcoat how much of a bummer it is to have to shut down a business and to not succeed at what you’ve been trying to do for one to three years. But also, I’ve heard some aspiring entrepreneurs, usually it’s like a developer working a day job who’s doing just fine and says, well, what if I start something and it doesn’t work? What if I quit my day job and it doesn’t work? And I often say, well, what is the worst case in that scenario? You probably get another job at the end, or maybe you’ve learned enough that someone will acquihire you, or maybe you’ve learned enough that someone will just hire you because of the experience you have there. 

Or maybe you start your next thing because you met someone. There’s all these things that can happen that are positives coming out of a failure. So I want to call that out of for you. Six months ago, if we would’ve said, what’s the worst that can happen? Or even, let’s go back three years ago when you quit your job. I would say, well, the worst that happens probably is you just get another job. But now you’re at a place where that’s not actually, you’re not going back to get another job. You’ve done the SaaS Marketing Gym, which people, if they go to Google type in SaaS Marketing gym, they’ll see you and Leanne, a smiling face there. So you have this new business already that you’re excited about. I would venture to say that part of the reason that that’s going to be a thing is because of the relationships, the audience, the network that you’ve cultivated over the past couple of years in building at LA Query. And so, I dunno, I like to think of each thing. Usually if I’m going to fail at it, at least can it level me up along the way?  

Colleen Schnettler:
Yeah. And before we joined TinySeed, we weren’t really doing any marketing. I mean, I have leveled up from a marketing perspective so much, and that’s going to be tremendously valuable with all the things I do next.  

Rob Walling:
Is there anything as you think back, that you would have done differently during this journey?  

Colleen Schnettler:
That’s tough. So practically speaking, I don’t think we executed fast enough that first year. And that’s a very practical thing, but we didn’t execute on the code front. We were building this list of people who wanted the thing, and we didn’t ship the thing fast enough. So I think shipping fast, I mean, that’s what everyone says, but it’s still true. Shipping faster, I would do differently. So much of this is kind of a, I don’t want to say a crapshoot, but in the very beginning, you’re just trying things to see if they work. I probably also would’ve started cold outreach a year earlier. Those two things together I would’ve done.  

Rob Walling:
Usually when people ask me about regrets with things, I often say, I wish I would’ve done X sooner. That’s usually always right? It’s like, oh, now that I know this, I didn’t know about this approach or I didn’t know that I should do that. Or I was too scared sometimes where it’s like, Rob, if you could do my whole career over, what would you do? I would’ve done video earlier. I didn’t do video really until Covid until 2020. I should have been doing video in 20, well, once I sold Drip 2016, and I just was like, Ooh, I don’t know. It’s hassle. It’s complicated. I’m not good on camera. All this stuff. I have this my own. And is it a regret or is it just a thing of, the lesson I learned is do more shit that scares you and try to educate yourself on things that you don’t know about. What are your blind spots that you should be doing? So  

Colleen Schnettler:
Yeah, I think for me, things, a lot of co-founder stuff would’ve handled that faster. Earlier I knew that was kind of a problem and I didn’t push on it. And for reasons would’ve done that faster, would’ve shipped faster, would’ve done cold outreach faster. It’s so many things. Even on the tech side, once I was doing all the tech myself, I found myself dragging my feet on. It wasn’t even really dragging my feet. I just feel like I still could have been faster. I still could have pushed a little bit harder because of the security stuff. I was scared to launch and betting because I was like, oh. I was like, oh, because I’m really good at thinking of corner cases, but when you’re just getting started, corner cases aren’t your best friend. So just so much stuff. So I think in general, that’s true, right? Do more things that scare you.  

Rob Walling:
When I’ve asked other founders after their business has shut down, what are things that you regret or that you would do differently? I’ve never once heard them say I would’ve executed more. So we moved too fast, we shipped too many things too quickly. We took too many risks. Nah, it doesn’t happen. Not at least not in our world. So as we look ahead then to your next weeks, months, years, what is ahead for you? What are you excited about? What are you working on?  

Colleen Schnettler:
Well, I’m doing the SaaS Marketing Gym, which right now is kind of a founder coaching, but it’s founder coaching and marketing. We just finished our first cohort. It’s three month cohorts, and it went really well. The people have great results, so it’s amazing to help people and then have them have actual new customers of the cold. We really focus, or I really focus on the cold LinkedIn outbound, and it’s working. I mean, it’s working, so that’s cool. So I’m going to do that. But the nice thing is, as Leanna and I are dialing that in, it doesn’t take a ton of time. So I think I have to have some big thoughts about do I try to expand coaching into a community and become more of a content coach creator? Do I do another product business? And if so, what would that look like? How would I get into that? What can I take from what I learned about Hello Query and apply it to the next thing I do?  

Rob Walling:
Very nice. Well, Colleen Schettler, thanks for sharing the real story. I just really appreciate you coming on here for the past two years and sharing again, the kind of the authentic journey and not sugarcoating it. And I think it will make a good story for people who have also struggled to have success and who have maybe had a failure or shut down to hear you go through it and be like, yeah, this is a normalized thing. We’ve all done this. Frankly, almost all of anybody who has had some success has achieved this, or anyone who has had some success has probably had an effort that no matter their best efforts, they’ve controlled what they could control and let the score take care of itself. And sometimes the score doesn’t go in your favor. So thanks for doing that.  

Colleen Schnettler:
Thanks for having me, Rob. It’s been a blast recorded with you these past two years. Obviously, I wish it had gone differently, but I gave this business everything I have and then some. So I am proud of the effort I put in and the work and the dedication I’ve had towards this business. And unfortunately it didn’t go my way this time, but hopefully next time it will. And quick reminder to all your listeners, that SaaS marketing gym.com is my new marketing founders marketing for Founders Coaching Business. First founders are loving it. It’s a small, tight knit group of other founders. Would love to have you.  

Rob Walling:
Thank you to Colleen for sharing not just the highlights and victories, but the real messy process of building and winding down a business. I’m looking forward to seeing what she does next. And thanks to you for listening. If you’re an ambitious founder building a B2B SaaS company, you should consider applying to TinySeed. Head to TinySeed dot com slash apply to get on our mailing list and get notified the next time we open applications.

Rob Walling:
You’re listening to Startups. For the Rest Of Us, I’m Rob Walling. I’m your host this week and every week and in this week’s show I talk with Jordan Gaul, the founder of rosie@heyrosie.com. Jordan and his team have been building this AI answering service for your business calls, and he has pivoted the company from what was an e-commerce headless checkout. And this is all after raising quite a bit of money in venture capital. And so you will hear Jordan in this interview mention that they had a few million dollars left in the bank and he kind of flippantly says it. I think that’s funny because when you’re in that game, he meant I only have a few million left in the bank. But obviously having that much money in your bank account gives you some optionality, and that’s what Jordan takes advantage of as you’ll hear in this interview as you listen to it, what I don’t want you to think is, oh, well Jordan is making it work. 

He has a bunch of money in the bank because money doesn’t solve your problems. What solves your problems is trial and error, gut feel execution, finding that gap in the market, being committed, doing a lot of things quickly and having most of them work out. And that’s what Jordan Gaul has done both with this company and his prior effort Cart Hook. You’ll hear that in the first three or four minutes, the story of growing that to millions in a RR and then getting squashed by Shopify. It’s a great conversation. We cover all manner of topics ranging from getting started to what it feels like to build, and I’ll put in quotes, an AI wrapper moving very quickly and what it feels like to have product-market fit. Jordan has signed up to be one of our founding coaches of the SaaS Institute. That’s at SaaS institute.com and it’s for B2B SaaS founders doing a million or more in a RR. 

He’s a phenomenal founder and we are lucky to have him as one of our coaches. If you are interested in potentially being part of a mastermind, getting one-on-one coaching, having an amazing community, head to SaaS institute.com to check it out. It is a premium paid coaching program that we are rolling out through TinySeed. And lastly, before we get going, applications for MicroConf Mastermind matching are open right now and those are open for all levels of revenue, not just a million and up applications close on March 31st. Head to MicroConf masterminds.com. And with that, let’s dive into my conversation with Jordan.  

Jordan Gal:
Jordan Gal, welcome back to the show. Rob, it’s good to be back with you. It’s been a few years, not the first time, so not the second time. Maybe the third, fourth, I don’t know, but it’s been a while and it’s great to be back.  

Rob Walling:
Yeah, you’ve been on at least three, maybe four episodes, so really appreciate it. Today we’re here to tell the story of Rosie and it has been a journey. Sir, you were telling me offline you are four years between product market fits with two different apps. So you want to give summarize cart hook for folks and then kind of catch ’em up where there’s rally and then there is Rosie. And then we’ll talk about, I want to find out where Rosie is today, where it stands, team size. You don’t have to share revenue, but just anything that gives people an idea of what’s going on and then we’ll dive into other stuff.  

Jordan Gal:
Alright, cool. So the reason you and I almost giggle a little as we talk about the drama is because you followed along, you invested in card hook, so you’ve been getting investor updates for years. For me, probably 10,  

Rob Walling:
I guess 10 years. Not every month  

Jordan Gal:
As any of my investors know, but regular, consistent. Anyway, so yeah, card Hook had product-market fit, card Hook was a checkout for Shopify stores before that was a thing, we were one of the first and it flew, so there was a point in time where it was adding 30, 40, 50 K in MRR every month. No advertising, word of mouth, just flying. It went from a million a RR to two-ish and then six. So very quick growth bootstrap ish. We took a few bucks from friends and family, but it effectively bootstrapped in the way it conducted itself. And then it ran into a wall named Shopify. So they did not want checkouts to take payment processing off of their platform and they ended car hook’s run. So I had the taste of product-market fit, it felt good, it felt really good. And then I started a company called Rally, which was an e-commerce checkout or for everyone outside of Shopify and that was intended for what was called the headless ecosystem. That didn’t quite work. We went toward enterprise, that kind of worked. We got to a few hundred k and a RR, it wasn’t going fast enough and then we pivoted to Rosie. So I went through this big dip over the last few years, we pivoted to Rosie, an AI voice agent that answers the phone for small businesses. And it might be a bit premature to call it product-market fit, but it feels familiar.  

Rob Walling:
Got it. So it’s growing fast. And Rosie, when you say small businesses, do you mean like lawn care maybe electricians, cleaners where they’re out doing stuff and their cell phone’s ringing all day, right, while they’re trying to do stuff and so this rosy acts as an AI agent. I ask this knowing the answer because I’ve called your rosy number and I asked the questions, but I want the listeners to understand what’s going on.  

Jordan Gal:
Yes, there are a lot of businesses in the economy that rely on the phone and it ranges from I’m a painter and I’m on the job and I can’t answer the phone to I’m that same painter and it’s 10:00 AM on Saturday and the phone rings and I’m with my family having breakfast and I don’t know if I should answer the phone, but it might be a $10,000 job all the way to, hey, it’s after hours and we’re a water remediation company, we got to pick up for emergencies and it’s 11 o’clock at night. And up until now, the only option I’ve had is an answering service that I pay for a human. So it lives somewhere in between voicemail and answering services. But any businesses, it tends to be local businesses, the type that you search for online and then you call on the phone to interact with, that’s who we’re helping. It’s like a very, very gnarly problem, which I can talk about how painful the problem is has led to challenging my assumptions around churn.  

Rob Walling:
And can you give us an idea of where the business stands today, team size, growth, whatever you want to disclose.  

Jordan Gal:
So somewhere last year I came to terms with, I guess it was toward the beginning of the year of 24, I came to terms with, hey, this rally thing, it might just not work. And in that case, what should we do? We had a few million bucks in the bank, should we continue to push on? Should we close the company? Should we pivot and keep the cap table the same? So I had one of those corporate situations buy co coincidence. I was in London for a conference and I ran into a friend of ours, Justin McGill, and I’m sitting around the table with my co-founder and a few colleagues and we’re talking to Justin about his experience in ai and I have to give some credit to that conversation. It just planted a seed in the back of our minds because what we were doing is we were talking to someone who is experiencing product-market fit and all the glory and challenges of it and it reminded us of what it’s supposed to feel like. 

And I guess I went home thinking it’s not supposed to be this hard to grow. And I think that was the moment where I looked around and I really thought, okay, I think it’s time to make some changes. So we took the team from about 20 people down to six. We all held hands virtually and we said, do you want to keep doing this? If you want to keep doing this, I’m going to come up with another product idea and we’re going to keep the team small and we’re going to build something in ai. And if you’re in, cool, if you’re not totally understandable. So we shrunk it down to six people and I did my search around for ideas and landed on this voice agent thing and we started to build maybe May or June and then we had something functional to look at around July and then we started to bring on the first customers in August and then the first paying customers in September and now here we are in January. 

I think it’s really worth talking about that journey and the feature set and the decisions we made around that because in hindsight it seems to have gone really well and now we have been doubling every month for several months in a row and it’s starting to get a little serious in terms of the revenue growth. So we will blow past a million a RRR very soon. So that’s a few months worth of growth and yeah, I think it can fly. It’s a funny thing, I think this thing has wings. It’s something I repeated several times somewhere around November, December it just felt like, oh, this is how it’s supposed to feel. It’s not hard at all. Everyone just wants it and they’re pulling at you and demanding and asking and begging and want it to work. So that feeling just gave us all this confidence and energy.  

Rob Walling:
I remember at a certain point in the time of Drip, I think it was 2014 where all of our graphs shifted, right? It’s like churn went down, trial to paid, went up all in the right direction. And I remember pointing and telling, I think it was Derek, I said, that’s what product-market fit looks like. That’s it. And you just said a sentence that I think was similar. You kind of said this is what product-market fit feels like. I mean it sounds like this poll, this market pull, I mean it does beg the question. I ask this periodically on this podcast because question I’m going to ask you in a second because it seems like everyone has a different definition of product-market fit. We kind of know we’ll know it when we see it is what we hear often. But how did you know you had product market fair? When did you know, again, I always say it’s not a binary, it’s not a one or a zero, but when did you know you were hitting that 30 out of a hundred, 40 out of a hundred, it’s getting stronger and stronger. What was that feeling like?  

Jordan Gal:
It was qualitative at first and then quantitative after. So the qualitative was just the responses from people, the support chat, literally the vibe in the chat. You just hear people, oh my God, I can’t believe this is as good as it is. How do I get this here? Can you jump on the phone right now to help me this? Just very, very strong desire for it to work and to be part of their business. And then later it turned more quantitative where I was taking screenshots of profit wall grafts and posting it to rock and jazz being like, this is a joke. What is this? And then you almost start to learn more about your own product as you go. So at first when I did my projections, I put churn. I think I put churn at 15 or 20% monthly because I’m thinking this is an AI product for non-technical people and it’s not actually that good, which is one of the things that attracted me to it because I think everything in AI will be very good. 

And so the things that aren’t that good right now are actually the best things to build in because everyone just assumes, oh, is it a voice? Is it really going to replace a person? Yes, actually it is. But if you start now, people laugh at you and then you kind of get in the right spot for a year from now and the churn is like a fraction. And you know why? Because it’s not replacing a human. It replaces voicemail, so it just has to beat voicemail and you get ROI. And so all these things start to reveal themselves like a few weeks into having paying customers a few months later you start to basically understand your own product.  

Rob Walling:
Yeah, this is where you had a thesis that this was a need and it would replace a human. And like you said, you get three weeks in, you’re like, oh, it doesn’t even need to do that. This is the learning. So this is what I see separating really successful founders from those that struggle is they can both have a thesis or a hypothesis and they both build something and put it into the market and the best founders, a bunch of noise comes in, there’s a lot of noise, you’re presenting it. It was super clear. I know that it wasn’t, but you figured out the good founders figure out, they sift the noise away and there’s a bit of gut feel there. There’s a bit of conversation with team. You ask people you trust and the founders that I see, I’m not trying to make a blanket statement, but founders who struggle, they launch that and then they either don’t listen at all to the feedback and they’re like, no, my initial thesis holds or they can’t sift through it. They don’t ask for the right opinions, they don’t. You know what I mean? And it seems like you really dug through it, I guess the fact that you’re on your third one, second product-market fit, but the third time of doing this probably helped with that thought process, I’d imagine.  

Jordan Gal:
Sure. I think what it helps with is confidence and confidence actually allows you to say, oh, I don’t know what I’m talking about. I’m just wrong. So I learned this and move on much more so than I am definitely right, and I’m making all the right decisions because of my confidence and my experience. It’s more like when I’m on a podcast six months from today, it’s going to sound like I’m smart and I did this on purpose, but in reality I’m just kind of going with what the market and customers are telling us. Maybe that’s a good transition to talk about the feature set, which was one of the more interesting parts of the experience.  

Rob Walling:
Let’s do it.  

Jordan Gal:
Okay. So I think of this as an accordion, like out and then in, so what we did is we built a very bad version of all the features. We looked at what we thought people needed for an AI voice agent, like a receptionist that did all this stuff, that transferred calls and set appointments and connected to your CRM, answered questions, gave directions, all these different things, and we put that out there. Then we put some energy and money behind cold email because we just wanted to talk to as many people as possible immediately. So we spent money for two months to just send out 500 emails a day and that just gave us people to talk to. Then we got them into the product somewhere in August and immediately like no self-serve, no signup, no credit card, just like ugly. What happened was that we took the big feature set and went to market with it with our initial cohort, and then we immediately started to see what people actually cared about out of our call it eight features, what do people care about? 

It became very, very obvious that there were two or three that everyone really needed and the other ones were a nice to have. And what that allowed us to do is to then shrink back down and we removed the features, we removed them from the admin entirely. They were in code, but you couldn’t see them. And what that allowed us to do was basically identify what the features of the base plan should be. So a whole bunch of features everyone cares about these, remove all the other ones. Those are the nice to haves, the ones that people really, really need. That’s our base plan. So when we started, we didn’t have many features, so we only started with one plan. We removed the other ones. We just had a $49 a month plan. And what we came to realize was that what that is is an answering service and what the higher tiers are is the spectrum from answering service toward a receptionist. 

So answering service basically just takes a message. So answering questions and taking a message, that’s our base plan, that’s 49 bucks. And then as we started to grow with just the base plan, we then took those other features that were nice to haves and we added them back into the higher tiers. So it’s like we had the feature set kind of right with some changes, but we just removed all the ones that people weren’t using right away. That was our base plan. And then we added the other ones back in a fuller sense with better understanding of how people actually wanted call transfers to work or emergency things to work or sending a text message.  

Rob Walling:
You hear people talk about MVPs, right? It’s a minimum viable product. Usually it’s either limited functionality or it’s just not very pretty. It’s not very well built, but if it’s always a pain point, people use it. Then you hear some folks today saying, well, you can’t build an MVP anymore because everyone’s taste is too high. Or I dunno, there’s different times change, right? MVP started in almost 20 years ago now, and so it can’t be the same thesis they had then because changed. But it sounds like would, would you consider that you launched an MVP and was the accordion approach you talked about intentional or were you kind of like, well, we don’t really know, so just launch a bunch of stuff and see what sticks?  

Jordan Gal:
It was intentional ish. The direction of it was let’s put out a bunch of features. We don’t actually need them all. We can always remove them. So that was generally, but the actual path it took and the details not intentional, more reactive to what people told us. Now we raise money. And what that allowed us to do was basically spend on things that you normally wouldn’t spend in an MVP context. So when I called it ugly, it was functionally ugly, visually, it was not ugly. So we work with a designer called Francois from Clearly Design, highly recommend. So all of our stuff was actually pretty. Now the idea of an MVP very, very different in an AI context. Another one of the things that I’ve learned is the differences between a traditional SaaS experience and mindset and approach compared to ai. And the reason MVPs in AI and SaaS are very different things is because in AI you don’t build nearly as much as you do in SaaS. 

So if you want to build A CRM, you kind of can’t launch an MVP. If you want an email, for example, you can’t compete with an MVP, you’re not really going to get anywhere. But ai, you are building at the very, very top layer, the interaction layer, the app layer of whatever you want to call it, and then underneath you’re really leveraging much more infrastructure than you normally do. So yes, none of us build hosting and servers. Great. So everyone leverages that. Or maybe you have a framework like Laravel and you’re using Tailwind. So we do leverage these things, but ai, the wrapper context, you’re really leaning a lot on other services. So we don’t do the transcribing, we don’t do the voice, we don’t do the LLM in some ways, what are we actually doing? It’s just that the UI layer that allows a three person painting company to have an AI phone receptionist up and running in 10 minutes, that’s actually what we do. And in that context, an MVP much easier to build.  

Rob Walling:
That makes sense. That’s how you move so fast. I was going to ask you, someone listening to this who says, came up with the D in June, had something in production in July, had paying customers or something, it’s like, wow, that’s really fast. I was going to ask if you moved fast because you have money, you raised money as you said, but it sounds like it’s just a simpler product to build  

Jordan Gal:
And fewer people going from 20 people to six people really changed things for us and we demanded speed of ourselves. And one of the most challenging things was our development process. So at Rally being a checkout your development process and QA super strict because you can’t mess up, you can’t mess anything up in production or you cost your customers money and lose their trust. So we had a specifically built very tedious, careful development process and deployment process. And then when we went to Rosie, we had to say, we are going to destroy 90% of our process. We have to intentionally set it on fire. It’s a real challenge for our product leader, Jessica. But she’s done extremely well with it because she wasn’t ideological about the process, she was just like, well, that product needed X, this product needs y, let’s change. So a lot of the speed is attributable to that.  

Rob Walling:
And you’ve kind of mentioned or hinted that AI rappers wrapping ai, I don’t know, AI wrappers like a bad term now. It’s like, oh, if you build an AI wrapper, you have no defensible mode or whatever. Do you think of what you’re building? Would you call it an AI rapper? Is it something different? And how do you think about that moat? Could me and a team of people compete with you in two or three months?  

Jordan Gal:
It’s shorthand and it’s useful even if I don’t actually think of us as a rapper. 

I think the conversation changed for the healthier with deep seek because it poked a hole in the potential value. The flip side of this, the commoditization of the LLMs. And so it put a lot more focus and attention on the application layer, and I think it evened out the debate a little bit. It’s not one sided. You can make money or get crushed all up and down the stack. So I don’t necessarily think of us as an AI wrapper and there will be a lot of competition for sure, but there’s still a very honest dynamic between service and customer. If you provide value and you continue providing value, people will stick with you. So what if there’s competition?  

Rob Walling:
So it’s a bit of a, I would almost call it a land grab right now of the more customers you get in a short amount of time, they are unlikely to switch if what you have is working, right?  

Jordan Gal:
That’s right. I forget who said it, it was a great term. I don’t know if I can remember the term correctly, but it was like UI commitment or dedication or  

Rob Walling:
To where someone gets used to using your app. And especially with non-technical folks, my parents are older and they don’t, man. They learn exactly. They learn exactly which button to click. So that’s what you’re referring to is like, Hey, you’re an electrician or a lawn care person. And stereotypically they don’t want to learn a new ui.  

Jordan Gal:
I have some very funny conversations on Twitter with technical people who are like, this can be done so much cheaper. I’m like, yes, you keep having that conversation, go for it. 

That is the same reason why if you go to our site, we have not taken on a vertical normally in SaaS. What would you and I recommend to ourselves and to other people? Don’t try to be broad for everybody. Find a niche. The niches are big enough, I kill it for one type of customer, then expand. And this, I think it’s the exact opposite. So I see a lot of competitors doing really well, very niched, ai, voice for veterinary clinics, ai, voice for doctor’s offices, ai, voice for restaurants and so on. And I think it’s just not the right time for that. I think one of the more interesting aspects of building an AI in general is that new markets are forming. If you think about our market, the phone, gigantic problem, enormous problem answering the phone, dealing with it, not missing phone calls, just gigantic. 

It’s very rare in our economy that you have that size of a problem and there are no solutions. That is just rare. And it only happens in this context because that solution wasn’t possible. So before you had voicemail and you had answering services that people pay two bucks a minute for and are generally not that happy about. So now all of a sudden this third option comes around that’s going to get filled in by competition. I think that land grab slash demand rush calls for being very wide and horizontal and everyone’s welcome and this is easy to get started with. It’s against specialization in many ways. We’ll see if in hindsight, that’s a good call in about a year, but we’ll see.  

Rob Walling:
Yeah, and I want to call out, as you said, it’s rare that there are problems that are huge that have no solution because people see money. Big companies are smart, they’re dumb and they’re smart, but they do see big money and they’ll move into a space. And so everything’s crowded in quotes, but these technological shifts move all of it and make it possible. The internet did this. The worldwide web, when it came about, it was suddenly like, oh no, this can do all. And social media was another one I think of even Web 2.0, email the iPhone, yes. Remember the iPhone coming out suddenly there was this huge rush. Even remember Facebook apps that was a big rush, VR that didn’t pan out the way. Drones, ai, crypto, and some of these panned out and some didn’t. But they at least created this space that suddenly there was a lot that could happen that wasn’t possible last  

Jordan Gal:
Year. And the key is that there’s demand for it because crypto feels like a huge innovation, not much demand outside of gambling, but AI is different. So I do think about the email context a lot. If email comes out, are you building Drip or are you building constant contact, right? If it first comes out, you don’t need to go niche in specialty, you just go, Hey, we’re MailChimp man, it’s everybody.  

Rob Walling:
And it’s simple. And I think Constant Contact might’ve been the first, or it’s kind of the first one that’s still around. An AWeber was the first one to do sequences of emails is my memory. And these are, we’re talking like 99 talk about early and they were so simple and they’re built in Pearl and they’re hosted on a server rack in downtown Manhattan in a cage, and you have to go, you know what I mean? It’s that stuff,  

Jordan Gal:
Yeah, crazy.  

Rob Walling:
And you have to raise half a million dollars just to get the thing built and deployed, but it didn’t need to be Drip. It didn’t need to be complicated at all. There were no workflows, you didn’t need ’em. And if you could just communicate with an audience, you could build it. I want to circle back to something you said earlier. I know someone listening to this is thinking about it, you built a bunch of, you built eight features you said, and then you’re just like, voop five gone up in the premium. Did anyone complain? Because I know that there’s someone listening being like, Ooh, everyone’s going to be mad when I take their stuff away that they’re paying for  

Jordan Gal:
In software. We have a lot more flexibility than we think we do, whether it’s raising prices, taking features away, or just coming up with other solutions. So what we did, let’s say for the call transfers, we just asked people, do you want to keep using it? We’re about to take it away. Do you want to keep using it? And they said, yes, we just flagged it. Okay, fine, you can still see that link. That’s it. Move on. They just knew that we weren’t going to support it and it wasn’t going to be good, but they were like, I love it so much, I want it. And we said, cool, we’ll come back to you with a better version of it in two months right now it’s going to go away for everyone else, it’s going to stay for you. And so in our admin individual features literally have their own links, so we just remove the link, simple as that. That’s actually how we reintroduce them also is we would email people and say, do you want to try the new call transfers? And they’d say, yes, we just give ’em a URL and then they would just go there directly from the URL.  

Rob Walling:
I like that idea of, because we used to do that all the time. Feature flags were such a popular thing when we were trying to, I say popular, we used them all the time in Drip to figure out for testing and for this type of stuff. There were features we built RSS to email is I hate that feature. And we built it because there were some early power users that were like, oh, if you just had this, I would switch from X, Y, Z. And I’m like, I will never use it. I don’t endorse that feature. It’s a pain in the ass. It’s brittle as hell, but I’m going to build it for you five because I knew then they would then talk about it. So we have a feature flag and I bet probably tens of thousands of users of Drip at this point and I bet there’s like a hundred that have that enabled, right? And that’s the thing, you’re going for tens of thousands of paying customers. I mean that’s your goal, right? Because tell people about your price points.  

Jordan Gal:
Sure, we’re at 49 point 99 and 199 and we have some weird issues around minute usage because our cogs are directly tied to minute usage usually. I don’t even like to think about cogs in the software context because normally cart hooks like 5,000 bucks for AWS for $500,000 in revenue. This is not that. It’s more linear and I don’t like it because people think of us as minutes. They say, do my minutes roll over. As soon as I heard that, I was like, we got to get away from this minutes thing. We want to focus on value, not the number of minutes. The pricing has been good to us so far. So in December we launched our self-serve onboarding and that was the turning point. So up until then it was do we have it right, do we have the feature set, do we have the price? 

Do we have all this other stuff? But it was ugly to help to get people onboarded and we purposely did not build the onboarding because we assumed we don’t know what the onboarding should be. So once we understood the base plan feature set, we looked at it and said, out of these base plan features, what is absolutely necessary to get any value at all? And we built that into the onboarding. What is the minimum number of things you need to do to just get value from this thing? And that’s what our onboarding is. The other part of our onboarding, I learned this from Justin McGill actually, was to take the value that’s in the admin and drag it out into the marketing experience so that it starts there. Instead of saying, here’s a wall that you need to get over to get value, AI has this opportunity. 

You see with CHATT PT, you see it with Midjourney, you just come into this product, you type something, boom, you have value. So I felt we needed to provide that type of an experience. So if you go to our site, the onboarding is actually part of the signup process. So it’s not, if you want value, get over this hurdle of creating an account. Instead it is come in, give us a bit of information about your business. So Google business profile is our primary path. Our secondary path is your website. Our third path is your, just give us a business name, but the primary path gets taken 80% of the time you put in your Google business profile, we pull your information, it’s very structured data in Google, and then the next thing you see is your AI voice agent and you have a few clips and you can just hit play and it’ll say, thanks for calling Pet Busters in Illinois. 

How can we help you today? So you get a little taste of the value upfront and then we ask you to create an account. And then when you get to the onboarding, we’ve already ingested your website, Google Business profile, all your information, your business hours, all this stuff, and you’re like, whoa, I’m almost done. So that onboarding is kind of what changed the trajectory. And we just put the other features at the third step and just said, keep exploring. So you get through the onboarding, you get the value, you get a phone number, you can call your agent and you are blown away in less than three minutes. You are a painter somewhere in the suburbs of Illinois and you sign up on your phone while you’re in your truck and within three minutes you’re like, holy cow, I have this thing. I made this thing, it knows my business and can answer my phone. And that creates enough desire to get through the last part of onboarding, which is actually forwarding your phone calls to us.  

Rob Walling:
And as someone you who built Cart Hook, that ran rally that required the onboarding was not three minutes to see value. No, the onboarding was extensive and it was often getting developers, right? Right. So you’ve seen both sides of it. I see both sides of it with TinySeed companies. You are in an incredibly luxurious position right now. I mean, I’m blown away. Three minute onboarding, that’s amazing. If you can do it, do you wake up every day and pinch yourself and think this is it? This is great.  

Jordan Gal:
So this is one of the few things that I can actually say was completely deliberate and it was a reaction to pain card hook was pain rally in terms of onboarding pain. And one of the requirements in this product was self-serve. And I think that has served us well because voice and AI is really, really powerful. And when something’s really powerful, you’re tempted to bring all that power to the user and that’s what creates onboarding friction. So a lot of our competitors are sign up for a demo or build this visual workflow and choose your AI model. And we were like absolutely not under five minutes to value and to onboarding. So that was very deliberate and it does feel incredible. Part of the product-market Fit Sense came after we launched self-serve and we watched completely non-technical people sign up, get their phone number, make a phone call and then put their credit card in. 

So we put the credit card on the other side of testing your agent. One of the more important experiences we had was around pricing. So maybe it’s worth kind of taking a little detour into that. That kind of surprised us in general. When we first started, we had a seven day trial with a credit card required, and for the first few weeks we looked like geniuses because everyone was converting. Seven days goes by your credit card on file, you convert and it felt good. And then we looked under the hood at the usage and I was like, we are building our castle on quicksand, not even sand like wet quicksand. And it’s because people weren’t using it. So what we did is we switched from a seven day trial to a 25 minute trial, and what that did is it went from time to usage based. So now everyone that converts is an activated user that’s already converted their behavior, which is partly why our churn is so, so low, no one’s converting that isn’t using it.  

Rob Walling:
That’s the thing usually with a lot of SaaS credit card upfront, the first 30 or 60 days, the churn is a lot higher and then it drops way down because people are using it as an extended trial.  

Jordan Gal:
Yes, they want to try, fine, I’ll pay you the 50 bucks because I’m so interested in this. Let’s see if it works. We flipped it on its head and that has made everything much, much healthier. And so when we did that, we took the credit card requirement away from the onboarding and we put it on the end of the onboarding as an optional step. And so to see someone come in self-serve, make a phone call, and then put the credit card in means they were impressed enough that they said, I don’t want this to go away. I’m going to put my credit card in even if it’s not required. And then 25 minutes goes by and then they convert and all of a sudden we have a real user as opposed to, Hey, seven days has gone by and now we have more revenue.  

Rob Walling:
And for folks listening, 25 minutes is not a linear time, it’s minutes of talk time, talk time, it’s someone calling in and it’s 25 minutes of interacting with Rosie. Yeah,  

Jordan Gal:
It can be one day or 30 days. I didn’t care. I thought the numbers would kind of even out. And so it would kind of reveal itself to effectively be a six day trial or whatever else.  

Rob Walling:
Now here’s the interesting thing you said, building a healthier business by doing this because you’re making sure that only that the people who convert are only those who are actively using it. But if you didn’t do that, if you just did the credit card in the seven day, you’d have more revenue right now you’d grow faster significantly as a founder, how do you wrestle with that? Is it just long-term the right decision or how do you internally think, boy, let’s say you said you’re doubling every month. You could be quadrupling every month literally, and that is pretty tantalizing, right? That’s actually what we see with some of the big Silicon Valley companies, the payment process or not Bolt AI where they raise all this money and they’re trying to dah, dah, dah, and then they just crash and burn, right? So how do you reconcile that as a founder who’s ambitious, you want to grow as fast as possible, but you’re like, well, I’m going to not put the pedal to the metal. I think it’s an unhealthy business.  

Jordan Gal:
So maybe two things. I think the most important thing is we saw it as an experiment. We did not say we’re changing the way the whole thing works and we’re taking this big gamble to build a healthier business. We were like, let’s just give it a 30 days and see if that works out better. So that made the decision to go into it lighter. The second part of that is I have seen what churn does and I have Googled maximum churn given growth rate and  

Rob Walling:
It’s not good. Yeah,  

Jordan Gal:
It’s not good. If anyone doesn’t know what I’m talking about, there is a formula for your maximum MRR given your growth and your churn and you do not care about it at 50 KMRR, at 300 KMRR, you really care that your maximum is three 50 because here we are, the wall has arrived at card hook. We found the wall because we were churning at 15, 15% a month. So we were skyrocketing but churning like crazy. I called it a washing machine. And if you recall, what I did is I went to the support team and I said, what percentage of your interactions are with people that will not become paying customers? And they were like, at least 50% at least. And I was like, that’s an absolute disaster not only for the support team, but also because we’re wasting time on people that don’t care as much and we’re not giving time to the best people. 

So that really gnarly decision at card hook to force a demo and only take on people that we thought were right and raise prices at the same time, that taught me you actually are better off building a better business as opposed to a faster business. So I was more open to it than we saw it as an experiment and it worked. And then there’s, there’s one final step in the process that just came out I think earlier this month in February that has again changed the trajectory again and that was what we call premium ui. So up until the beginning of this month, you looked at the feature set on the marketing site and on the pricing page, and then you signed up and you just didn’t see the premium features. You would basically have to ask us, Hey, that call transferring thing or this custom training, can I hear more about that? 

And then we would say, yes, that requires this higher tier. So we had no mechanism for people to discover the higher tiers instead of just jamming it in there. We very deliberately went with the designer and a product team and said, how do we make this not only incredibly attractive but also self-serve? Now you go through the onboarding and that third step, the keep exploring is now expanded. And as you navigate the admin, there are individual elements with a little yellow star and you click on those and we reveal the feature and we clearly state this is a premium feature that requires these plans. Do you want to use it? Here’s what will happen. And building that self-serve, now we have a mechanism for increasing arpu. So now everyone comes in at the base tier at the $49 tier, and now the percentage we’re almost at 50% of our revenue is now at the higher tiers. And then that starts to argue for expanding the strategy around that lower tier. Do we have a free tier? Do we lower it to 29? Now that we have more confidence around a self-serve revenue expansion, now it starts to factor into our marketing plans and our advertising and our positioning and pricing and all that.  

Rob Walling:
Man, I’m looking forward to following this story both through investor updates and having you back on the show in, I don’t know, six or 12 months to kind of follow up because everything changes. I mean, if you look back at the past five or six months, it’s changed dramatically for you. And I imagine building in AI in that world, things are going to change quick for you again,  

Jordan Gal:
Yes. I just sent a tweet out yesterday that encapsulates this extreme optimism and paranoia. I think that is the appropriate stance for the CEO of this company is we are going to push so hard, we’re going to crush it, we’re going to get to 10 million ARR in 18 months, and at the same time at any minute, someone could release something, someone could do something like, so we have to hurry. And I think ai, that’s what founders in this space right now are feeling. No one should be overconfident about anything. Unless you’re lovable and you got the 17 million a RR in three months, then you’re fine. Be comfortable. There you are.  

Rob Walling:
Yeah. So folks want to read that tweet. They can head to Jordan Gaal, that’s GAL on Twitter. And of course if they want to check out Rosie, what we’ve been talking about for the past 30 minutes, the AI answering service for your business calls, they can head to, Hey rosie.com. Jordan, thanks so much for joining me. Thank you very much. I want to give thanks again to Jordan for coming on the show and sharing his wisdom. He is a founder that executes, and oftentimes when I’m saying on this show, the founders I know who succeed, do X, Y, and Z, he’s one of those founders that I think about. He is, if you know coding, he’s a design pattern for doing smart things, executing well, getting done, moving fast, a little bit of gut, a little bit of data, and being super scrappy and making it work. So it’s always great to have Jordan on the show and I hope you enjoyed the conversation. This is Rob Walling signing off from episode 764.

Rob Walling:
Welcome back to TinySeed Tales. This is season four, episode eight, the penultimate episode where we hear Colleen Schneller with her back to the wall as she’s trying to find product-market fit. Before we dive into this episode, I want to tell you about SaaS Launchpad. This is the best course I’ve ever created, and it is the best course that I know of early stage SaaS founders. You can get it at SaaS launchpad.co, and if you head there, you can download for free one of the videos. I think there’s 26 or 27 different videos, almost 10 hours of content, and you can download one of ’em for free to get a taste of the content. But this is the meatiest most prescriptive course for early stage SaaS founders that I know of my team and I spent, I’ll tell you what, I thought it was going to be about three months, and I think we wound up spending 10 or 11 months outlining recording, editing, producing. It is very dense with material. We have amazing guests like Derek Reimer Lee, Anna Patch, Ruben Gomez, Ross Hudgens, bunch of names that we really enjoyed building the course, and it’s getting rave reviews from the hundreds of folks who have purchased it. So SaaS launchpad.co. If you’re interested, let’s dive in to TinySeed Tails.  

Colleen Schnettler:
The product is totally different, but the job to be done is the same, and we couldn’t make that first product really work the way we want it to, but this feels very doable with the tech that I already have.  

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 first startup accelerator designed for Bootstrappers. We’re now in episode eight with developer and entrepreneur, Colleen Schneller. The last time we chatted with Colleen, she decided to make some changes. It no longer made sense to cater to engineering managers, so she decided to shift her focus to helping marketers, which caused its own frustration since the market was pretty crowded,  

Colleen Schnettler:
I was going all in on marketing data analyst. I think I mentioned this last episode, but doing the whole cold LinkedIn DM thing, started a newsletter, targeted those people, built a guide and engaged as many of those people as I could in actual conversation. I had honestly, kind of an abysmal response rate from my cold LinkedIn outreach. I don’t know if that’s because marketers are just overwhelmed with choice, but it wasn’t great. The few people I did get on the phone, they aren’t using their database as a tool to provide any kind of signal, so they have many, many different data sources. They’re almost overwhelmed with data sources, but one of those data sources is not the database  

Rob Walling:
That makes sense. So they have all these tools, these Mixpanel or product analytics or even I imagine tracking incoming conversions from ads and SEO and all that. And yeah, none of that’s all third party data.  

Colleen Schnettler:
There was some interest, but it was more of a, that would be nice to have. There was no, this is absolutely something I need to do my job. And a lot of them are using data aggregators like a segment or something like that, and those tools just pretty much pull in your data from all these different sources, try to aggregate it. Some people use big queries, so they are using databases, they’re just not using their main or primary database,  

Rob Walling:
And so would an approach there be to do a bunch of integrations and pull that data in and aggregate it?  

Colleen Schnettler:
Yeah, I thought about that. That was one of the things I looked at because I could be an aggregator, I could sit on top of BigQuery, but learning more about that, it’s pretty tricky. I actually have a founder friend, and that’s what his business literally does, and maintaining those integrations can be really, really painful. So without, again, it comes down to I would totally build that if I thought it would work, but I don’t have any kind of unique take on it that all of these other data aggregators, I’m not like, oh, I’ve seen this one hole in the market and I’m going to solve it. There was nothing like that. It was like, this is a space. There’s a lot of players in this space. Most people use Segment. Can you build something better? And not being a marketer, I think this is where maybe the fact that I’m just learning marketing that is both helpful and harmful, it’s helpful because I’m approaching it with beginner eyes, so I’m able to kind of see things people take as kind of just ground truth, but also it’s hurtful because I don’t have deep industry knowledge, so I can’t say this is the very specific problem that is wrong with Segment. 

Here is how I can solve it,  

Rob Walling:
And it’s hard to enter a competitive crowded space when you don’t have an obvious position. That’s  

Colleen Schnettler:
On my it’s, I mean, it’s just not worth it without having 30 people saying, yes, I need this one very specific thing. So I saw a lot of people’s problems even getting segment data. One person I spoke with walked me through getting his segment data into Big Query and all this custom stuff he had to do, but that was, I couldn’t see how that wasn’t just an isolated problem he had because of his unique data structure.  

Rob Walling:
And that’s one of the hard parts about all of this is there’s so much noise among the signal. Sometimes all the signal is kind of noise. Talk to 10 people, they tell you 10 different things. It’s like, you told me to talk to my customers. What do I build now? You can’t build what they all said because 10 different products. So where did that lead you? Where does it stand? Where does hell query stand today?  

Colleen Schnettler:
The one thing that the marketers did seem to have in common was a general hatred for GA four, and so I kind of went down the GA four path for a while to learn more about that space to see if there was something I could build on top of GA four. But again, what I learned there was I wasn’t a power user of Universal Analytics, so I can’t say there’s this one feature in universal analytics I really miss that I want to build out in GA four. So anyway, I didn’t think I was the right person to build a GA four wrapper, for example, although I spent some time investigating it to see if that was the right choice. I don’t have a strong enough opinion about what I would want in that kind of a product, like what Data insights are not being surfaced. And so I did not think that was the right direction to go.  

Rob Walling:
Eventually though Colleen did find a new direction, one that led her towards an epiphany. She found a new customer who wanted to pull their own data. This had a reconsidering an idea that she had tabled in the past.  

Colleen Schnettler:
The product is totally different, but the job to be done is the same, and we couldn’t make that first product really work the way we want it to. Why that is, it’s neither here nor there, but this feels very doable with the tech that I already have. So it’s ambitious, but it is full circle and it is something I can build, and I have someone who will pay me for it, so I’m going to do it.  

Rob Walling:
That’s crazy. How much will he be paying you for it?  

Colleen Schnettler:
One 50 a month.  

Rob Walling:
A hundred. And you already have a customer paying you 60, right? 59?  

Colleen Schnettler:
Yeah. Well, they’re both. So now I have two customers paying me 60 bucks a month.  

Rob Walling:
Got it.  

Colleen Schnettler:
And this guy told me he’ll upgrade once I have this SSO embedded features,  

Rob Walling:
It’s going to be at $210 of  

Colleen Schnettler:
MRR  

Rob Walling:
Soon. That’s got to feel good. Two customers though, for, I mean, it does Rob. It does feel good. I know. I know. We’re laughing because it’s true, because it is been a long journey. So here’s the interesting thing. When you were going to build, or you built the query builder back in episode one and two, there was something with where embedding it in an app was going to be complicated because it doesn’t look and feel like their app and it’s like, Ooh, it’s really hard to make it, but now it’s just a text box, right? I mean, it is a tabular display of stuff, but  

Colleen Schnettler:
Yeah, so the biggest difference is, I mean, it’s a completely different product, but yeah, the UI will be less just because it’s less obtrusive in terms of what the UI is versus what we were looking at building first.  

Rob Walling:
A while back, Colleen mentioned she had six months of runway until she ran out of funding, which would’ve taken her through December, just three months from when we were having this conversation. I wanted to check in and see how she was feeling about that timeline.  

Colleen Schnettler:
I have mixed feelings about it. This whole season of this podcast shows a really real journey, and unfortunately it just hasn’t gone the way I thought it would, and man, but I don’t want to do anything else. And that’s the weirdest thing, because before I got into TinySeed and before we got that initial big contract, it just seemed inevitable that this was going to work. There’s nothing I will outwork anyone. I will do anything. I am coachable. I have all of the skills, literally all the skills to make this work. So the trajectory that it’s taken, which is really not working, is a super bummer. But also, I don’t want to do anything else. So I do think I’m going to stick. So for this business, and it might be this is the wrong business, everyone, and you can speak to this, everyone who has found product-market fit says you will know when you are building something people want, you will know. 

So I can tell you right now for sure, that is not happening to me. I am not building something people want. I am cold calling and trying to get people onboarded, and it’s like just pushing this boulder up the hill. You want this thing, you want this thing. And I’m not. So this last pivot to customer facing, this is my last pivot on this business. So one thing I don’t want, and I know a lot of people who do this, and that’s fine for them, but I don’t want a side project that goes on for five years making no money or little bit of money. Oh, it’s making $200 a month. I should keep it up. No, I’m here to go big or go home. I’m kind of an intense person. I am all in. So yeah, so that’s why I’m giving myself till the end of the year, I have a specific goal of where I want to be by the end of December. And if I’m not there, then I’m just going to walk away.  

Rob Walling:
And it’s really good to have that clarity because otherwise, how do you answer that question of when to quit? When do I quit? I get this question all the time, right on the podcast, people ask you, and it’s like, it sounds like you’re pretty clear on knowing when to quit that it’s not today. It’s either end of December or it’s not depending on this kill criteria. So I dunno if you’ve read the book, quit by Annie Duke. There were a couple things in it that I took away from, and one is kill criteria. Knowing when to quit and kill criteria involves a date and some type of number usually or some type of milestone that if you haven’t hit this by that date, then it’s done and you can adjust along the way, of course as you get new information. But that’s exactly what you’ve defined. Here is a date and a number,  

Colleen Schnettler:
And I decided I need to do that because I do want to. I want this to work so badly. So that’s why I kind of gave myself those guardrails to be like, if you’ve been doing this for two years and it’s still not working, and to be fair, a lot happened in there and we sold the other thing, but that’s probably a sign. It’s not the right thing. You’re not working on the right thing.  

Rob Walling:
And I say this the time that this is the hardest part, or at least I guess it’s the hardest part mentally, I think because you just don’t know and no one can tell you, I can’t sit here and say, oh, you should definitely take this approach or this direction because none of us know you’re trying to do something novel. And this is one of the hard parts of entrepreneurship is that fuzzy time before product-market fit. But as you start building something, people want your product matures, 5K, 10 KMRR, things become clearer. And then by the time you hit 50 KMR, it’s really clear what you’re building, who you’re building it for. It should be, unless you’re really getting lucky, which can happen. But this part’s fuzzy. This part is hard to even prescribe. The frameworks for it are really loose. I mean, to talk about customer development or lean startup or I have this course in this book called SaaS Launchpad. 

I get as tight as I can with it, but I can’t be as prescriptive as I can. If you were to come and be like, Hey, I’m a 20 KMRR and I have 20 customers or 30 whatever, and I can be like, oh, great, I can playbook the out of this. I know the next steps. I can almost blueprint this out if exactly what I would do in which order of blah, blah, blah. But where you’re at is just like you’re just searching. You’re trying to find it. You’re using Founder Gut and you’re making a lot of hard decisions with incomplete information. A ton of noise.  

Colleen Schnettler:
Lots of noise. I mean, I haven’t talked to you in a couple months. So one of the things I tried in that gap was going after product people. And I mentioned that the marketing people didn’t really want to talk to me. The product people all wanted to talk to me. I got on so many calls and Rob, there were several people that I was sure a hundred percent sure they were going to sign up and try it out. And I just got ghosted so hard by these people so hard. So yeah, I don’t know. It’s a messy, weird middle ground. To your point, signal to noise getting on these calls, these people were like, yes, I need this to make product decisions a hundred percent. And just disappeared. Won’t respond to emails, won’t respond to LinkedIn. Messages just gone poof.  

Rob Walling:
Those are the road. Those are the speed bumps that you encounter. You can let ’em be roadblocks or you can just let ’em be Speed bumps, keep driving, pivot.  

Colleen Schnettler:
Yeah, I mean, there’s just filtering that out at this stage. It’s just trying to filter that stuff out. It’s trying to figure out what people really want, what’s actually useful, and really defining that value prop for people, which even now with what I have, isn’t crazy clear. Even to me. I have a big sales demo on Monday for a big company, and I’m sitting here thinking, what is the one thing that I can show them? And I’m like, this is the thing you need. This is why you reached out to me. This is the thing. So even defining all of that, it’s messy and it’s hard, and you’re kind of building and showing people and building and showing people, and you kind of hope, or at least that’s how I work. I hope to iterate my way to the correct.  

Rob Walling:
As the end of Colleen’s runway approaches, she’ll have a lot to consider. Can she hone her value prop and find a bit of traction with a handful of paying customers in order to extend her runway? That’s next time on TinySeed Tails.

Rob Walling:
It’s another episode of Startups For the Rest Of Us. I am your host, Rob Walling, and in this episode I’m on a solo adventure where I’m going to walk through Paul Graham’s, I was going to say recent essay, but it’s over a year old now. It’s called Doing Great Work. I think it’s a fascinating look at the steps that it takes to ship amazing things and to build incredible things on this planet. And I’m going to focus that a little bit more on being an ambitious Bootstrapper rather than Paul. Graham thinks of things like probably Airbnb and what DoorDash did they invest in or Instacart, these really kind of game changing apps that everyone winds up using. But for the purpose of this podcast, we want to build real businesses for real customers that pay us real money, which look Stripe and DoorDash and those actually are as well, but that’s not the focus of this show, and so I’m going to edge that or focus it more on things that relate to what you are probably building. 

Then I’m going to talk about whether there’s a hierarchy to skills If you’re building a SaaS, this is based on an X Twitter conversation and dive in to a couple other solo topics. But before I do that, applications for MicroConf Connect, which is our online community and forum are open today and they close March 5th. Since we do custom group onboarding for new connect applications, we take folks in batches once every month, and if you get in now, you will have access to our MicroConf Connect live session, which happens next month in March with Asia Gio. She’s going to be talking about, well, all types of amazing stuff that Asia talks about. So if you’re interested in potentially becoming part of MicroConf Connect, do you want to dip your toe in the water MicroConf connect.com? It’s only open for a few more days and closes on March 5th. 

Let’s dive in to my first topic. I’m going to link up this essay, how to Do Great Work by Paul Graham, and when I noted down this essay, I put a couple bullet points. I said, doing great work isn’t easy and you must be ambitious and hardworking to even consider it. Paul Graham has four steps to do great work, and he says, this is how practically everyone who’s ever done great work has done it from painters to physicists, and obviously he includes startup founders in this, I would assume. So step one is to decide what to work on. Step two is to learn enough about it to get you to one of the frontiers of knowledge. The third step is notice the knowledge gaps, and the fourth step is boldly chase outlier ideas. And the reason I wanted to talk about this in this episode is whatever you are building, whether it’s a lifestyle business or an ambitious SaaS startup, I think the first three steps probably apply to that. 

But the fourth step of boldly chasing outlier ideas I think only applies if you want to build really ambitious products or companies that get really big, but deciding what to work on, learning enough about it that you get to one of the frontiers of knowledge and then noticing the knowledge gaps to me is a fundamental part of building something that other people will value and businesses will pay for. It’s extremely rare that someone gets so lucky that they enter a domain or a space or a vertical and they build something right from the start without learning enough about it to get to the frontiers of knowledge and then noticing the knowledge gaps and they’re right. It’s kind of like trying to hit a bullseye on a dartboard or it’s kind of like trying to roll a particular number of 57 on a 100 sided die, maybe even a 500 sided die. 

They don’t make those. I have a 100 sided die and it’s almost like a golf ball, so you roll it, it just rolls forever. It’s so much easier to roll 2D tens, but I digress. The idea of you coming into a domain that you don’t understand and seeing a huge gap without first getting the frontiers of knowledge and noticing those knowledge gaps is a one in 1,001 in 10,000. This is the thing I see people try to shortcut and they don’t try to shortcut it by learning and getting to the knowledge gaps faster. What they instead try to do is build a bunch of bullshit and throw it against the wall to see what sticks, thinking that if they launch a hundred or a thousand products, that one of those is going to magically take off through sheer luck, and I think that’s a terrible game plan. 

I hate relying on luck because as much as we can say the harder you work luckier you get or you make your own luck by trying a lot of things and putting in a lot of time and developing skills and working hard. As much as we can say that, and as much as I believe that you can’t control luck, and I’ve seen more than one, and by that I mean dozens upon dozens of companies just get sides swiped because they were unlucky platform risk competitors. I’ve told stories on this podcast about people getting unlucky and then about folks who got lucky, A friend of mine who’s sold his business for $20 million literally and always says, I just didn’t work that hard. I got really lucky. I hit things at the right time. Don’t rely on that because almost no one succeeds, mostly based on luck. 

So what I want to encourage you to do as you think about building a product is decide what to work on, then learn enough about it that you get to one of the frontiers of knowledge and then notice the knowledge gaps. I’m going to give you an example of this. When we built Drip back in 2012, I knew that email marketing was a cornerstone of every business that I had built up until then, including software businesses I had built, including my consulting days. I maintained an email list of interested people including launching my first book, start Small, stay Small, including launching MicroConf. All of those relied so heavily on an email list, and I knew that email marketing could be better, could be easier to use. It could have a built-in JavaScript widget that allowed you to easily place it on every page of a website, some basic things. 

I decided what to work on, and then I learned enough about it that I was like, oh yeah, there’s no easy JavaScript widget. That’s the gap in this market. And so Paul Graham talks about knowledge gaps. I actually think there’s positioning or kind of market gaps. And then what we learned after we launched is that there was actually a massive gap in marketing automation, which is a term I had never heard, didn’t know what it meant. People started saying, Hey, are you trying to unseat these big marketing automation providers like Infusionsoft, Marketo, Pardot, Silverpop, there’s a bunch of others, but what we now know today as just email marketing was much simpler back then. And so it took me a while to wrestle with this to reorient the company around. We are going to become a lightweight marketing automation tool, but eventually I decided what I wanted to work on and then I had to educate myself on marketing automation. 

I had never used any of those marketing automation tools. I had never even logged into one. And there were folks like Brennan Dunn giving me advice because he, I believe had an Infusionsoft account. Keith Ack had an Infusionsoft account, he’s a founder of semetrics now funded by TinySeed, and I remember literally emailing him saying, we’re thinking about building these automations. How do they work in Infusionsoft? Infusionsoft, by the way, renamed itself keep, and they recently sold the private equity for less than one XARR multiple because they didn’t have, they just stopped growing. They weren’t releasing software fast enough and they didn’t keep up with the market product-market fit drifts. And so what I realized was, and it was, I mean it was a hard realization. I am not saying in retrospect, I was a hundred percent and I knew it was just this amazing thing that I was totally convinced of. 

I was trying to learn enough about it to get to the frontiers of knowledge, and I was noticing the knowledge gaps and the knowledge gaps in this case were, they were positioned upmarket. They were charging way more money than you needed to still make a lot of money as a software company, and their sales process was terrible. They locked you into one year contracts. They had a mandatory upfront $2,000 fee. People hated it, but there was no alternative. And at the time, I didn’t want to build a marketing automation platform. I didn’t really know what it was. It sounded really boring. It sounded like a lot of work, to be honest. I’ve never been afraid of hard work, but I thought that it would be a tough business. There was a lot of competition and there were a lot of things going on in that space. 

And so Paul Graham’s fourth step is boldly Chase outlier ideas. Now, let’s be honest, drip is not nearly as much of an outlier idea as Uber or WeWork or even Stripe or Facebook or Google. There’s different levels of outlier idea, but eventually I did a ton of soul searching and I came to grips with the fact that pivoting Drip and becoming full blown email marketing was already in the works. Derek and I had talked a lot about that, and it just made sense. It’s like, oh, I think that’s a legit need in the market, but the idea of going full-blown into marketing automation and adding all the automations and the triggers and the actions and all that was something we really had to wrestle with. That’s just one example. There are literally dozens and dozens within the TinySeed portfolio, 192 companies, and I would guess they’re 40, 50, maybe more. 

It’s probably even more than that maybe is it even a hundred of founders who learned enough about a domain and whether they learned about that working a day job, whether they learned about that on their own by doing cold calls and interviews, whether they had a brother-in-law or their aunt who had this issue at work, they didn’t just hear about that and go build it and hey, everything worked. They had to decide to work on it. They had to learn enough about it to get to the forefront of the knowledge, and they had the notice, the knowledge or the positioning or the market gaps. All of these things take time and patience and skill, and when I say it takes time, maybe it takes you three months to get there or maybe it takes you a couple of years. If you think about the first line of code that Derek wrote for Drip was December of 2012. 

We had a first paying customer, I believe June of 2013, so it was about seven months later. We launched to the world in November because we did a staged or phased launch across our 3,400 emails that were on our list. And then we did not find what I would consider product-market fit until August or September of 2014, so it was almost two years from the first line of code until I would say week plus plus product-market fit. Product-market fit is not a binary, it’s a continuum, but we found that after a couple years because it took us a ton of time to learn about the space and the market to get to the frontiers of knowledge and to notice the knowledge, the positioning, and the market gaps. So am I saying you have to commit to an idea from day one and it’s going to take you two years to get to product-market fit? 

No, none of that, right? The story is just to illustrate that. Oftentimes if you want to do great work, if you want to build something interesting and ambitious, and again, ambitious for us, what is that 5,000,025 million a RR? It’s different than Paul Graham’s definition, but if you want to do that, you’re not going to do that by building a much small projects and throwing against the wall to see what sticks because you don’t have the knowledge and the understanding of where to take it. And you do have to put in hard work and develop skills and maybe get a little lucky to build great things. My second topic for today comes from an X Twitter conversation. Looks like it happened back in August of 2023, so it’s still relevant. Alexander Schnebel asks, do you believe someone with x plus years of experience as a software engineer has an unfair advantage when bootstrapping a business compared to someone who doesn’t? 

And I responded to Alexander and said, they have an advantage, but it’s fair they put in the time to build that skill. Someone with software engineering plus hiring slash managing experience is better off someone with those plus marketing or sales has even more of an advantage. And that exchange got me thinking about is there a hierarchy? Would I put one skillset at the top? And specifically he says when building a business, I mean when building a SaaS company. And so I started thinking, there’s engineering skills where you can build software. There’s marketing and sales, there’s what we could name, how many skills, a lot different departments, customer success or great skill, customer service. Those are important, but they’re certainly less important to going from zero to one with a SaaS company. And so I gave it some thought and I picked the four most important skills based on my criteria and how I see people succeeding and I put ’em in order. 

The number one is marketing or sales, and I say marketing or sales because if you have a low touch funnel and folks are mostly self-service, then it’s marketing because you need to drive a lot of traffic and you need to build an incredible funnel and retention and all that stuff. And if you’re selling a high price product, obviously you need to know sales and have I seen people with almost no product skill, very little engineering skill build successful SaaS companies purely based on their marketing or sales acumen I have Now, is the product usually pretty and quite buggy and they eventually lock up and have a tough time shipping features? Usually in most cases, yes, unless they find an engineering co-founder who really keeps the quality of that code base up. It usually in the long run is a detriment, but can they get to five, 10, 15 million, 20 million a RR mostly bootstrapped just with marketing and sales? 

Yes, absolutely. I’ve seen it over and over and over. I could give examples. So marketing and sales by far the number one, and look, I was saying this back in 2010 with start small, stay small where I have this line of market comes first, then marketing, then aesthetics, and then functionality. I think I put a distant fourth, which I’m not sure I would actually agree with that. Still things were were a little different back then. Did I put aesthetics forth? I don’t even remember. It doesn’t matter. I put a market first, product class, market first. That was a refrain that I used to have to say a lot when I was speaking at engineering events, trying to educate developers on how to launch products. So marketing and sales, number one, I’m going to be controversial here and I’m not going to put engineering. Number two, I’m going to put product as number two. 

Product is that sense of what should I build? Not just what market should I enter, what vertical should I attack, but specifically what should we put in this product? How should it look? How should it interact? How should it operate? Because product understanding, much like I talked with Brendan Fortune here, what was it four or five episodes ago? Product understanding is not something everyone has and it’s critical to building something people want and are willing to pay for. And just because you can write code does not mean you know how to build product. This is a big mistake I see non-technical founders make where they say, I need a SaaS product, so I’m going to hire an engineer and they’re going to go build the product. And I’m like, okay, do you know what they should build? And oftentimes it’s like, well, no, but they know how to build it. 

And I was like, but do you know what they should build? And then the other thing is do you know how they should build it? Meaning do you know what the screens should look like? Do you know what each individual page should do? Do you know where this checkbox should go and what not to build? Do you know what to leave out? There’s so much product thinking that has to go in this early stage that I think as engineers we just think, oh, I’m just going to write code. I’ve been building apps for this credit card company or for this bank or for this municipal government for years, so I know how to build a product and you don’t. You know how to write code and you know how to write software, but that is not a SaaS product. So I put product is number two. 

Engineering, indeed is number three. And I think you can succeed without engineering skills on your founding team, but in the long run, I do think you need an experienced engineer who’s guarding that code base fiercely. And fourth is hiring and managing people, hiring well and managing well. This is one that’s often overlooked because a lot of us think that we can do it all on our own. I want to be that single founder, solo engineer, and I’m going to build an amazing product and get it to half a million a RR or a million or 5 million, whatever your goals are, and I’m going to do it a loaner. I’m going to do it with a bunch of contractors because the complexity and the expense of hiring team members and managing them, I don’t want to hire or manage, so I’m going to do it on my own. 

I tried to do that. I thought that that was the way that I was going to be successful, and I kind of did it right. I got to about 150 K in annual revenue with a bunch of small software products, and it was fun. It was really boring. By the time I tried to do ambitious stuff, I needed to hire a team. I needed people to be on board and to be committed. And so one thing that I see folks who have successful SaaS companies where they know how to market, they’re good with product, they found product-market fit, and they’re engineers and they’re shipping and they’re doing all this stuff, but they can’t hire or manage people, is they hit a ceiling quite quickly. And oftentimes they burn out because they’re doing everything themselves. They are on a hiring treadmill where they hire people and they either are mising or they’re not managing them well, and so they constantly are churning through people and they just can’t make headway or make progress. 

And so could hiring managing actually be maybe number three above engineering feasibly, I could probably steal man an argument that says hiring and managing, if you are really good at it could feasibly Trump engineering. But those are the four skills, and those are the order I have in marketing and sales, then product, then engineering, then hiring and managing. So think about that. If you’re a software engineer, your skillset of course is critical to building the SaaS, but it’s much less critical to the success of the business than you might think. This is why and start small, stay small. 15 years ago, I wrote product last marketing first because nothing happens until you get someone to pay you for your product. And that’s where marketing and sales are number one in my book. My last topic for today is it’s a story. It’s a story from 2015, boy, it might’ve been January of 2016, and it is the one time in the history as Derek and I were building Drip that we committed to a deadline for a feature that we publicly committed. 

And it was that one time that we forgot a big development task or a big product task. The moment it was like it was absolutely Murphy’s Law that the moment we announced it, we realized, oh, we shouldn’t have done that. So we took the tact as we were building Drip that we obviously wanted high feature velocity. We wanted to ship as fast as possible, but code quality was always extremely important and we didn’t see the need to generate external pressure, meaning go on social media or email the whole list and say, Hey, next month on March 21st, we are going to be launching this huge feature. Because we were intrinsically motivated. We were two founders of this company and we were a small enough team that the DNA was to just get stuff done fast, but at high quality. So what I’m saying here probably doesn’t apply if you have a 50 person engineering team. 

Maybe it does, maybe it doesn’t. I don’t know if I could scale this to an org that big, but we really were a high performing, high functioning team, and we all moved to ship quickly. And so putting deadlines, especially public now, we could put some internal deadlines where I’d say, Hey, do we think we can get this done by next Wednesday? Do we think we can get this done in three weeks? Realizing that the further out you think about the cone of uncertainty gets more and more uncertain, right? It’s like if I say three weeks, do I really mean three to four? Probably two to four. But if I say, can we get this done by tomorrow? It’s probably tomorrow, right? I’m more certain about deadlines that are closer to me. So we would talk internally about when we thought we could ship it, but we never went public with those deadlines. 

And then in mid 2015, we embarked on the biggest and frankly the longest duration wise feature that we ever built with Drip, at least pre-acquisition, and it was to build visual workflows. So we had all these automations, but it was, if you think about Zapier, where there’s a dropdown list that says, Hey, this is the trigger and then this is what it does. And we had automations in there and they were doing great, and we were growing. We had product-market fit. It was great, but the hardest part is you just had all these automations doing things independently instead of them being linked in a visual chain. If you go to HubSpot or I’m trying to think of who else has this now, but back then, of course it was Infusionsoft. Oh, it was active campaign. They had actually a really nice visual builder interface. So we set towards doing that, and I remember Derek and I talking about, I think it’s two to three months and it took five months, and there were reasons. 

It was a complex task. We wanted to do it really, really well, and we wanted it to ship at the level of our taste of our product taste. And so we got to the point where it was about two weeks prior to launching, and we knew it was two weeks prior to launching because the code was checked in and we were testing and it was some final things we were implementing. And so I went on Twitter, did a blog post, emailed everybody, and I put this blurry, we blurred part of the visual builder and said, something incredible is coming on this date two weeks out. And we were like, this is so cool. We get to, people were conjecturing and wondering, and the internet was a buzz and we were so excited about it. And I’m pretty sure I did that in the morning. And by the afternoon, one of us realized this changes our entire onboarding flow. 

Onboarding took weeks to build our onboarding. And Drip was really extensive and it worked really well and we had never revamped it. And we knew that once we had workflows, visual workflows in there, the onboarding didn’t make sense anymore. So suddenly we were like, we don’t really have time to redo this. So we jumped into a conference room and it was just like panic DEFCON five type thing. And it was Derek, myself, and I believe it was Anna who was our customer success person. And we said, what do we need to change? And we spent an hour just hashing out what can we do to make this work? And then we pulled in a different engineer, Ian off of the tasks he was working on and Derek set to get in designing, and we were like, we really want to hit this deadline. We could push the deadline out. 

Obviously, I don’t actually know how many people would notice. There’s always that thing of you’re paying more attention to your deadlines than other people are, but it was stressful and I remember thinking, I’m never doing this again. In the end, we made it, we got onboarding redone and everything was fine. It was a stressful couple of weeks. So the lesson is not, I’ll never do that again, but I think the level of rigor that I had at the time about dotting on the I’S and crossing all the T’s was not enough that I could call my shot like this, because if you’re going to do this, you need, I think to have checklists and sanity checks and double checks and probably a few brainstorming conversation, just thinking through, if I’m going to commit to this, have I thought of everything? Because really we hadn’t, we’d forgotten this thing and it was the one time that we really committed to something. 

So I think there are a couple takeaways here. Number one, public deadlines can be helpful, but I think if you’re going to commit to one that you need to be pretty damn sure that you have thought of everything. And so the big mistake I think we made was not committing to the public deadline, but I think it was not being rigorous enough with thinking through everything that needed to happen there. But the other thing that I would say is I don’t know that public deadlines are that necessary in most cases. I think internal deadlines could definitely be helpful for everyone working towards a thing, especially if you have multiple teams. You have sales and customer success and support who all need to be on board and trained up on a feature. Of course, at that point, you got to have some type of concrete deadline. But I think people also overindex on specifically public deadlines and perhaps overuse them because we certainly function quite well without them for a long time. So that wraps up this episode of Startups For the Rest Of Us. Hope you enjoyed a little walk down memory lane as well as some thoughts on Paul Graham essays and Twitter X conversations. This is Rob Walling signing off from episode 762.

Rob Walling:
Welcome back to season four, episode seven of TinySeed Tales, where we continue hearing Colleen Sch Nestler’s startup journey as she ventures on now as a solo founder. Before we get into the episode, if you are a SaaS founder, doing at least 1 million in a RR are going to be there soon. You should check out SaaS institute.com. That’s our premium coaching program for founders doing seven and eight figures. We have our first two coaches in place, Jordan Gaul, who many of you know from bootstrapped web, founder of Cart Hook, founder of Rosie, as well as Mark Thomas, who runs growth at Podia and formally worked at Powered by Search. Both have been TinySeed mentors for many years, and both are exceptional at helping SaaS founders figure out their roadblocks, figure out those bottlenecks and get things going. So SaaS institute.com, if you are looking to be in a mastermind group with four other ambitious seven and eight figure founders, if you’re looking for amazing one-on-one coaching community, a couple in-person events per year, there’s a lot going on and we’re putting together an incredible group of folks. And with that, let’s dive into the episode.  

Colleen Schnettler:
There were like hundreds of competitors and I was like, who are these people? And so it’s a little bit of a rant and it’s good for capitalism, but it’s bad for me in that these products are really good. And no matter what you think is unique, it’s probably not. Someone’s probably doing it with more money and better ui. So you really just have to put the work in to make the product better. The product development has to be a continuous cycle.  

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 first startup accelerator designed for Bootstrappers. Today in episode seven, we’re back with Colleen after almost four months since our last conversation in the world of startups, four months can feel like an eternity. I was eager to hear how things are going. So Colleen, when we last left your story, you were building a tool aimed at directors of engineering. How did all that play out? Where do you stand today?  

Colleen Schnettler:
Well, yes, it’s been a few months and it has been quite a wild ride. I’m going to be honest. So my first vision last time we talked was going to be this product, and I was targeting engineering managers in the hopes that it would help their developers save time by allowing other teammates, like non-technical teammates to build their own reports. And so the first I got some kind of initial, which when you’re trying to go zero one is really fun, and it kind of felt like there was a lot of energy and momentum around the initial product, but truthfully, that fizzled out pretty quickly. So at that time, it kind of felt like I had more of a, oh gee whiz, this is cool and not a wow, this is actually a useful product. I’m going to integrate into my workflow. So at the time, there were maybe three or four people who were actually interested in using the product to build reports. 

So I worked really closely with them to say, how do we decrease the kind of cognitive overload for the person using the product? So you’d come into the product and it’s AI on top of your database to build reports, and you say, but what do I want to know from my database? I don’t even know what I can ask. So I built in suggested questions based on your schema, and then I shortened the time from, someone has this book, I forget her name, but it’s called First Time to Wow. And it’s this idea of you get something in front of your customers, how do you wow them quickly? So now I have it set up in a way where you come in, it shows you a sample question customized to your database, you click it and you immediately get a chart so you can immediately see a visual that represents the data, you can add it to dashboards, all of that to say there was a lot of early development working tightly with potential customers. 

But as I continued to go down that path, I just wasn’t getting the engagement I thought I would get from developers and engineering managers. When push came to shove, it just felt like they were casually interested, but this product was not really solving a pain point. And I think part of that was because you can’t put it in front of completely non-technical people yet the AI is just not good enough. So a lot of development work, talking to a lot of developers, talking to a lot of engineering managers, but ultimately I don’t think they’re my target market.  

Rob Walling:
Early stage founders are often faced with this dilemma. When is the right time to move on from an idea and how do you know when that’s the right direction?  

Colleen Schnettler:
That is such a hard question because I feel like for every successful bootstrap business out there, you’ll hear both sides of the story. You’ll be like, this person was successful. They pivoted so quickly, this person was successful, they stuck with it for three years. So I was really just going on what I felt was the right decision. And for me, the reporting that I was looking at targeting engineering managers and developers that was going towards embedding reporting for customers and looking deeply at that space, I just didn’t think I had any unique angle. I mean, there’s a lot of products out there that’s embedded reporting for customers, and they’re really pretty good. And I didn’t have any kind of unique takes. So at one point I even almost took a consulting job building embedded reports for a potential customer in order to learn more about that space and the limitation of that space. But I decided not to do that because talking to a couple different people, it seemed like the requirements were so disparate. And I didn’t want to get myself back in that situation where I was a consultant who thought I was building a product, but I was really just consulting.  

Rob Walling:
And so you find yourself at a decision point. You decide, well, this isn’t the right idea for me, or this is not how I’m going to proceed. What next? Are there fallback ideas that you’ve fall back to or is it searching for the next thing?  

Colleen Schnettler:
So actually, to be completely honest, I went and spent a week in the woods, and that gave me some time to really think about, do I want to pursue this embedded reporting idea? Do I want to stick with this idea and try another take on it? Do I want to shut the business down? Obviously a huge opportunity cost to continue to pursue this idea. And what I landed on is I’m not done with this idea yet. I want to take another swing at it, come approach it from a different direction.  

Rob Walling:
I’ve talked for years about the value of founder retreats, taking a break and spending some time away from the computer can give you the space to find some clarity. Colleen’s time in the woods seemed to reinvigorate her interest in a previous idea, a report builder for marketers. So I was wondering what led her back to this idea.  

Colleen Schnettler:
I actually hired a marketing coach to help me figure out an ICP, and I sat down with him and there was this immediate thing that happened where before he was a marketing coach. He was a marketing analyst, and he was like, oh, I literally would’ve bought this tool. This was a problem I ran into all the time where I needed data from my database. I think you can really reach these people by teaching marketers sql. So teach marketer sequel and see if it resonates. And so I said, all right, let’s try it. And marketing I think is really good for me because I’m a developer and I’m really, really interested in the marketing space. It’s something I really want to learn. And one of the things I do well is kind of learn in public. And so learning about the space and talking about the space is something that comes very naturally to me. And like I said, it’s something I’ve wanted to do anyway. It felt like a good alignment of things I wanted to do and potential customers.  

Rob Walling:
And so where do you stand today? Do we have a product in the market? Do we have folks using it?  

Colleen Schnettler:
Yeah, so I am all in on this new idea. And the new idea is I help marketers build better reports. I’m targeting marketing data analysts, people who are marketers. So there’s actually, I’ve been in this space for a while now. There’s a big difference between data analysts who are pure data people. They’re with Python and R and whatever. And then the marketing data analysts and marketing, those people are marketing first. So they’re trying to take their existing data and figure out how to use that data to do better marketing, to sell more product. And so I’m all in on those people. I started a newsletter. I am on LinkedIn. I’m sending thousands of cold dms on LinkedIn. I have a whole strategy behind helping them get data out of their database using sql. So that’s kind of what my newsletter’s about. I have a couple users and I have my first paying customer, which is pretty exciting.  

Rob Walling:
Wow, that’s amazing. How long ago did that happen?  

Colleen Schnettler:
Two weeks.  

Rob Walling:
Okay.  

Colleen Schnettler:
Just happened.  

Rob Walling:
So they’re paying, are they using it as well?  

Colleen Schnettler:
Yeah. What’s interesting about this person is I got on a call with them and they hate my ui. I don’t know how else to say it, but they’re like, this product isn’t even very good. And I was like, oh, okay. But I do think it’s interesting that this person was like, this product isn’t very good. So I didn’t think they were going to convert. And then it was kind of fun. I was in the woods having my soul searching, and I didn’t have Stripe notifications set up. So it was two days later I realized they had converted and I sent them a message and they were like, yeah, well, I needed to run more queries. I was like, awesome. But I mean, this is still the wild west. This is still my plan is focus in on these marketing data analyst people with everything I have. I think what I’m going to find is their data is in many different data sources, but try to find, I’m just really, really trying to find that one pain point, one little niche where I can just grab a foothold while simultaneously, I’m a one woman shop now because budget is tight. So simultaneously making the product something that these people want to use. And so it’s crazy.  

Rob Walling:
This is early stage where everything’s cloudy and you wish you had 10 times more hours to get there faster. Makes a lot of sense. Yeah. So what is the product today? Is it I can type out an English sentence and AI turns that into a SQL query and then pulls data out? Or is there more than that?  

Colleen Schnettler:
Yeah, so the product today is, it’s a chat with your database, but you ask, it’s fine tuned to you ask a question, it returns to SQL Query. You can edit the sql, which was funny, that was a heavily feature, but no one actually does it. It’s like people just want to know that they can, they want to see it. 

They want to see it. You can edit the sequel, you run the sequel. It gives you charts. It gives you tables that you can export or add to a dashboard. So the dashboard seems to be kind of an interesting thing. Right now, the marketers so far, and again, it’s a very small sample size I’m working with right now, they seem to really be leaning into what can I do? What reports can I build with this? And you also have a live shareable link. And so one of the things I’ve thought about is you can do triggers, you could do triggers off your database, which is actually something I’m really excited about. My one paying customer really wants me to do that and I need to talk to more people. But I don’t know, I think there’s something there. I think there’s possibility there. The goal is to have something, they come in, they set up, and they don’t have to log into Hello Query. So if you look at product analytics tools or some other tools, even like a Google, they send you emails once a week, here’s what you need to know. And you’re like, sweet, I’m happy with that. So that’s kind of where I want to go with this.  

Rob Walling:
I’m just curious how much your first customer is paying you.  

Colleen Schnettler:
$59 a month,  

Rob Walling:
You decide on that amount.  

Colleen Schnettler:
I literally made it up.  

Rob Walling:
Usually how it goes. Yeah, we have TinySeed companies come in and they’ll be like, our pricing is 499 and 1,002 thousand or whatever, high end tools. And we will look at their data and I’ll say, why are these people paying you $29? And they’re like, well, so when we launched, we launched at 20. You know what I mean? And it’s like it just shows you that’s what happens. 59 will become 99, we’ll become, when you build something people really, really want, that number goes up fast. There’s one interesting comment you made to me via email. I want to surface because so many people listening to this episode will have felt this or might be feeling this now, but to quote you said, the bar for product is so high in today’s market, or at least my solution is not compelling enough to have a low bar. 

There’s this prevailing wisdom that if someone wants something bad enough, they’ll put up with a mediocre ui. But it seems every category is crowded. And I hear this, I hear this from folks getting started of the days of a crappy MVP may be gone, and I can either confirm nor deny because I do know that there are some folks, there are some areas where you can still build crappy MVPs and they work, but there are also places where it’s not. And the more technical your audience, the more design focused, whatever, they pick up on products that are really and not poorly built, but that don’t look amazing, don’t have amazing UX and don’t feel finished. We can tell you and I can tell as builders when a product is finished. So what does that mean for you then as someone who is building a product and has what we might call an MVP now with one customer? What is that sentiment that you sent me imply for your journey?  

Colleen Schnettler:
Honestly, I think it just seems that the products are so good and it seems like every niche that you can think of, that’s what it feels like to me has five or six products. There’s no world of like, oh, there’s one competitor and they have a crappy product. People are just building better stuff than they were 10 years ago, right? 10 years ago. You’re like, oh, this thing, it looks crappy, but it does exactly what I say it’s going to do. And that kind of worked for some people, but I just feel like the level of polish you need in a product is so much higher now. And it’s funny because I think of it because the very first version of my product, I thought it looked pretty good, and then I put it in front of people, like five people, and I was like, oh. And they were like, Ooh, where do I change the name? And I expect to be able to do that in line, and this font looks weird and it’s too big. And I was like, but it does what I said it was going to do. Okay.  

Rob Walling:
Yeah. When you’re talking to engineering managers or even marketers who have this high bar for the tools they use now, right? Because things are polished. Makes  

Colleen Schnettler:
Sense. Yeah, things are polished and I don’t know, it feels like this whole revolution of everyone, shipping product is great, but everyone is shipping a product. So there is a ton of competition even in, so when I was thinking if I wanted to do other ideas, I was talking to friends that work in other industries. I talk to someone in insurance. I talked to someone who’s in this really niche, really niche industry you’ve probably never heard of. And I was like, definitely they don’t have tools because no one even knows what they do, but they do. She was like, yeah, we have five competitors. I looked at the schools I looked at, I was looked across anything where I knew someone, environmental survey companies. I was like, all of these sectors have products. I think I even told you I filled out, they call ’em request for proposal for this really niche thing. 

I was like, no one’s going to apply for this or submit a proposal to this because no one has ever heard of this. I didn’t get it. But that was another example of there were hundreds of competitors and I was like, who are these people? And so it’s a little bit of a rant and it’s good for capitalism, but it’s bad for me in that these products are really good. And no matter what you think is unique, it’s probably not. Someone’s probably doing it with more money and better ui. So you really just have to put the work in to make the product better. The product development has to be a continuous cycle. If  

Rob Walling:
I ever prediction for where you’re headed, and this is just none of us can predict where you’re headed with the product, but I feel like it won’t be inventing a new category or it won’t be building something that has no competition. It will be figuring out, as you get into this, now you have your ICP. What tools do they use today that they’re already paying for that are not good, that are either way overpriced? And I don’t mean 20% overpriced. I mean five x what you could charge half or a quarter and still mint money or that are really, they’re polished and you can do a lot of things, but they still don’t work. And there’s either a major deficit in a big competitor or there’s a corner of the market that isn’t being handled. And I think it’s kind of being in the game, increasing your luck surface area by just being there, having the conversations, building something. And I think the difference between success or failure will be if you can find that spot where you fit in the market.  

Colleen Schnettler:
I agree. I think one of the things with what I have now, if you look at it as chat with your database, build reports, that’s not really solving a problem. What is that? That’s cool, but what is it? What is the problem you are solving? What can you do with that? I think general, some people, so chat with your database is not and any way unique. Everyone’s doing that and a lot of the companies doing it are trying to position it as the data analyst for your company. I don’t think that’s right. I think that is still too vague. People are still, the whole point of hiring a real data analyst is they tell you what you don’t know that you don’t know. So I think you’re right. I think this is all about exploration. This is about finding out what tools they’re using that maybe aren’t good enough. It might be an aggregation of tools. I can see a world where it’s dump everything in Big query. I do it for you, dump everything in Big Query. And I sit on top of Big Query because Looker gets really expensive really quickly. Yeah. But again, this is the beginning still. I’m still in the beginning.  

Rob Walling:
In the last episode, Colleen was frustrated at her lack of progress. And now that she’s 22 months in, it feels like she’s just getting started again. And you know what? Sometimes that’s just how it goes. Sometimes you have to pivot your idea. Sometimes you lose a co-founder. Sometimes it takes a while to find a problem worth solving. That’s being a founder. In talking with Colleen after this interview, she has about six months of runway to find some traction. Six months to find a signal in all the noise that indicates she’s working in the right direction. That’s next time on TinySeed Tails.

Rob Walling:
But it was just that long list of the same mistakes that I see founders and aspiring founders making thinking they can sell everything on Twitter and they don’t have to do any hard work. It’s common, and it’s unfortunate that so many people kind of fall into that trap as well as the build it and they will come thing or just the, okay, so I built this product, now how do I market it? I see this question on Reddit and it’s like, geez, dude, are you kidding me? It is startups For the Rest Of Us. I’m your host, Rob Wallen. Each week on this show, I cover topics related to building ambitious, yet sustainable B2B SaaS companies. So you could be bootstrapped, mostly bootstrapped, maybe you’ve raised buckets of funding as some of the listeners do. Historically, the show has focused on bootstrapping, but really it’s about building independent, self-sustaining startups that aren’t tied to this need for fast, fast, fast growth, billion dollar outcomes, and the constant influx of additional capital. 

In today’s episode, I answer listener questions. It’s a good mix of some voice questions, some intermediate questions, and I think I even have an earlier stage question to answer as well before I dive in to the questions. If you have not checked out SaaS launchpad, that is the best course that I know for early, early stage SaaS founders. So it’s all about finding ideas, vetting ideas, trying to do some validation, building your product, getting to launch, doing marketing before you start coding, doing marketing before you launch the product, and finding those early adopters and early users. That’s at SaaS launchpad.co if you want to check it out, is by far the best course I have ever built has almost 10 hours of in-depth video content that is just packed with tactics and strategies and all the stuff that I espouse. This is stuff that I don’t have in any other books. It’s things that I touch on here and there on the podcast, but have definitely not gone into this depth ever in anything that I’ve released. So SaaS launchpad.co if you’re just getting started. And with that, let’s dive in to our first listener question.  

Craig:
Hey Rob, a longtime listener, first time caller. Thanks so much for the podcast and for the SaaS playbook. I listen to the podcast every week and I’ve read the SaaS playbook five or six different times, and each time I extract new information and insight from it, it’s just such an incredible resource for bootstrap founders. So first of all, thanks so much for all you do. A little context, I’ve built a B2B SaaS company, which provides an analytics platform to HR teams to help them make data informed decisions about their talent. So think about things like collaboration, insights, employee engagement, drivers, predictive attrition. And for this we use a variety of different data sources such as HR systems, business systems, and employee surveys. For MVP, we built many components such as our data Mars and pipelines, but for others, we decided to white label other SaaS solutions. 

For example, for the surveys, there’s so many great survey platforms out there, we just couldn’t justify custom building something given the relatively low expense we would incur by white labeling an existing solution. Ideally though, we would prefer not to have these dependencies on other SaaS companies because we would like to flexibility and control over the cost and features within our platform. Since we are a bootstrap startup, however, we found white label components to be a quick and low cost method of achieving product-market fit and launching our MVP. So I’ve got a few questions around this. Number one, how would you advise thinking about the mix of custom-built versus white label components, does the optimal mix vary based on growth stage? And number two, is there an inflection point at which we should consider prioritizing a migration away from these white label components? And then lastly, if we were to sell the company one day, does the reliance on other SaaS for specific capabilities impact our valuation versus a fully custom solution? Thanks for your time,  

Rob Walling:
Greg. Thanks for calling in and for the kind words at the top of your voicemail, if you’ve read the SaaS playbook five or six times, I take that as a real compliment and I take it as a sign that it’s probably providing some value to you. So thank you for that. I really do like this question because it’s not super common that people will completely white label big areas of their app. I guess I’ve seen folks like they’ll do an integration with an electronic signature app if they don’t want to build that functionality. So I’ve seen it done here and there, but it sounds like you’ve done this with multiple white labeled vendors, which is obviously a good way to, as you said, get to market faster, not to have to build all this functionality. I will admit I do see white labeled integrations like this as a form of technical debt, and it’s one of those that it may never come back to bite you, and that’s great, and I think that’d be a big part of my thought process here is if it’s not broken, I would probably not prioritize fixing it very highly unless I felt like the white label vendor or that part of the app was existential to my existence as a company. 

And so if I was doing half a million dollars a year, unless one of the vendors is jacking up their prices or they’re not reliable or there are bugs or there’s downtime, obviously then it’s broken and I would consider prioritizing fixing it. But with none of those things in place, if there’s not anything going wrong with any of them, I could see getting to a million a RR before really considering swapping them out. And the way I would think about it is which of these is the biggest platform risk? Really what this is, it’s a form of platform risk. Now it’s lower risk than something like building on X Twitter or making a Facebook app or making a Shopify app. Certainly lower risk. And if you go back to the episode where I talked about platform risk, I talked about how there were eight levels and three different factors that contribute to those. 

And I believe what you have only has one of the factors, which is a technical reliance on a third party, you are relying on their white labeled solution and the API for your product to properly function. So one of Craig’s questions is how would you advise thinking about the mix of custom built versus white label components? And for me, white label is a risk. There’s platform risk and it’s a form of I guess technical debt, something that long-term. I mean, if I’m going to become a 10 million a RRR 20 million a RR SaaS company, I have to undo this at some point. Much like if I’m going to become a 10 or 20 million a RR SaaS company, at a certain point I have to go back and fix some of the crappy code that I wrote in the early days when I was trying to get to an MVP. 

These are different, but they’re similarities. And so the mix and the way I would think about it is I want as much of my custom code that I own, that is my custom IP as possible as makes sense. But of course there’s a balance here. If I can get to 250,000 or 500,000 annual recurring revenue much faster by using white label, I want to probably consider that. Then Craig asks, does the optimal mix vary based on growth stage? And I think it does. I mean, there are people that are building a hundred percent in no code trying to get to 10 KA month so they can quit the day job so they can then rebuild it with code. And I would never want to be running a million dollar SaaS company that was in no code personally, I’d be so worried about the brittleness and the scalability and platform risk and just all those things. 

So it really does to me, depend on the growth stage. One of the reasons is the further along you get, the more valuable it is. And if I have an asset, let’s just say you’re at a million or 2 million a RR and throw out a five XARR, multiple growing fast, checking five to 10 million business, that’s when I mean stuff’s real at that point. So that’s when I start getting nervous around these kinds of dependencies. The technical debt, the platform risk that I’m talking about when I’m supporting myself and team members, I’m paying people’s mortgages. I have something worth millions of dollars, makes me more and more nervous. Then Craig asks, is there an inflection point at which we should consider prioritizing migration away from these white label components? I mean, I would do it one at a time over time, and maybe you never replace all of them. 

You go with the least risky one last and the one that is performing really well for you and it’s inexpensive and it’s easy street, what are the factors there? Jacking the price up, there’s bugs, there’s reliability issues. These are all the things that can contribute to that. And so I would probably start thinking about it around a half a million a RR, maybe a million, and I would have a list probably in priority order of what I thought we should do. And then you put that into your roadmap at a certain point. Do you do one every quarter or one every six months? Depends on what else you’re trying to ship. And then lastly, Craig’s question is, if we were to sell the company one day, does a reliance on other SaaS for specific capabilities impact our valuation versus a fully custom solution? It depends. 

It depends on is it 10% of your functionality? Is it 80% of your functionality? There’s a big difference, and are they causing you any problems? Right? That platform risk will probably be factored in, but only if it is, again, more than just a small bit of your functionality. And if you have 10 modules in your web app and one or two of them are white labeled, I could see someone probably saying, well, I’m going to buy it and rewrite those custom, right? But if five of your 10 are white labeled and it’s some pretty complicated piece of functionality, then someone thinks, well, I want to want to buy it and rewrite those, but that’s a ton of work. So they would probably factor that in. So the answer there is kind of maybe it really depends on the extent of it, how hard it would be to recreate that functionality and whether there have been any issues at all with the white labeled components to date. So thanks for that question, Craig. I really do appreciate you writing in with it because one that we haven’t heard on the show before. My next question is from Ian, and Ian was kind enough to send in a question and then they kind of answered their own question a couple of weeks later. So let’s listen to his first voicemail, which was a question about a VoIP system as well as a way to get to his SaaS metrics.  

Ian:
Hi, Rob, longtime listener, first time caller. First off, I wanted to thank you for all the great work you’ve done to help bootstrapped founders and co-founders like myself. Startups For the Rest Of Us has been helping us and encouraging us since we started our business back in 2016. My name is Y Han and I’m the co-founder of Wash Dry Fold, POS. We’re a bootstrapped B2B SaaS company that offers point of sale and management software exclusively to laundromats that offer wash dry fold. We built this very niche software because we needed it in our own laundromats located in Tulsa, Oklahoma. We’ve recently sold our thousandth point of sale system and hit the 1 million a RR milestone. We just hired a full-time employee and I need help finding the right tools to help us scale. For several years now, I’ve been searching for a software that would centralize virtual phone lines for all employees while also providing a way to centralize our inbox for tech support, customer service sales, et cetera. Beyond this kind of VoIP slash CRM functionality, I also really need in-depth SaaS metrics like LTV based on custom cohorts. We already use ActiveCampaign, slack, Calendly, WooCommerce, and all the Google tools, but I’m really struggling to find a solution that pulls everything together and adds all the functionality without adding multiple new subscriptions that then everyone on the team has to learn. It’s something I’ve researched, but I’d love to hear from a B2B SaaS veteran or from somebody who has deep experience in the space. Thanks so much again for all you do.  

Rob Walling:
So when I heard this question, I thought to myself, Hey, that’s a pretty cool niche and congrats on getting to a million ARR in such a small, what I would consider a small market. It’s not huge, but that’s great. The things that came to mind when Ian asked this question, and then I’ll let Ian answer his own question with the solutions he went with. When I think of a VoIP solution to centralize all the phone numbers, I think of open phone or Grasshopper and Grasshopper’s older school, it’s been around for what, 10, 15 years, but open phone. I know a lot of startups that use it. And then for in-depth SaaS metrics, if you’re using Stripe, I would be using one of three ProfitWell chart Mogul or Bare Metrics. Those are the most popular. We see it across TinySeed and MicroConf companies, but those were the things that came to mind. 

And then for crm, I don’t know, I think of close.com that integrates outbound VoIP with CRM functionality, but I don’t know. I don’t know if they do inbound. I would guess not. And so I was thinking that these are three different tools. These are not, there’s no one tool that does all of what Ian has asked for, but to have Inbound VoIP to have CRM separately, well, I’m like, okay, well pipe drive and close and active campaign. Since you’re already using Active Campaign, I’ve heard their CRM functionality is not the worst. And so maybe that’s a piece I would use. And then of course, SaaS metrics already weighed in on. So with that, let’s cut to the chase and hear what Ian decided to go with.  

Ian:
Hey Rob, it’s Ian. I sent in a question a few weeks ago and I just wanted to give you an update because I think I have a few answers for one for VoIP. I ended up going with Zoom, and it turns out you can bundle a lot of their stuff to get really good values, and they’re still, even with a Zoom Pro license, it was still half the cost of RingCentral and some of the other more VoIP central services. So I think that’s a really nice resource for someone looking for something similar. For the CRM piece of it, I think we’re just going to go with active campaign CRM functionality because it’s got the basic stuff that we need. And then the third thing I was really looking for was SaaS metrics, and I’ve kind of dove in deeper on that. And there’s certain things like net revenue retention where I haven’t really been tracking all the metrics that I should have been tracking or the way that I should have been tracking them specifically because with certain customers, I guess if they add a seat, which for us would be adding a store, that’s an increase in that customer’s spend, but we just track it by store and not by actual customer. 

And so there’s a lot of kind of funny things that I probably need to go back and recategorize go find when they first started with us and calculate their LTV and all that kind of stuff. And so it would be nice to still know a really good SaaS metrics software that somebody’s used and liked, but at the same time, I’m realizing that I don’t really even have all the right data to get the right metrics out of the SaaS software, at least in the past. So anyway, just wanted to give you an update on everything. Appreciate what you’re doing, always listen to new episodes, so keep doing what you’re doing and thanks. Bye.  

Rob Walling:
So obviously, thanks for weighing in on that, Ian. I didn’t know that Zoom had any type of VoIP functionality, so that’s really interesting. And it’s less than RingCentral, which is yet another one of these phone centralization platforms. And then Ian did wind up going with ActiveCampaign, which is cool, and I’m not sure if they’re using Stripe. And so the solutions that I suggested may be a little trickier to get to. But with that, you’ve heard both my and Ian’s take on this question. So thanks for writing in Ian. If you want to invest in founders, you can do so through my world-class accelerator and Venture fund TinySeed. We are currently raising our third fund after having raised and mostly deployed almost $42 million across our prior funds. If you’re an accredited investor or the equivalent in your country and you are interested in indexing across dozens, if not hundreds of B2B SaaS companies that are hand picked by myself, a r, and our team at TinySeed to be the companies that we believe will succeed, you can head to TinySeed dot com slash invest. If you enter your info there, it goes straight to a R. You’ve heard him on startups For the Rest Of Us, and you can have a conversation with him if you have any questions or you can receive our deck and our memo and just the thesis of what we’re investing under because we are a unique venture fund and SaaS accelerator. So if you think you might be interested in putting some capital to work in ambitious, mostly bootstrapped B2B SaaS founders, head to TinySeed dot com slash and invest. 

My next question comes from X Twitter where a listener named or Lee, he’s at sunglasses face on X Twitter, and he asks, what change in mindset do you notice between founders doing $100 MRRA thousand dollars, 10,000 MRR and a hundred thousand MRR? It’s an interesting question. It’s worded in a way where I’m not sure I accept the premise of it. It implies that if you’re doing a hundred or a thousand dollars a month, that you have a different mindset than someone doing 10,000 or a hundred thousand. And if you think about it, the founder doing a hundred thousand MRR was probably at 10,000 a year or two ago and a thousand a few months before that and a hundred a few months before that. And so it’s the same founder, and I just don’t know that your mindset shifts that much, but I kind of want to answer a related but a different question or just reshape the question. 

I feel like orally might be asking, what mindset do you need to be successful? What mindset shifts do you need to have internally to get to a hundred thousand MRR? And the interesting thing is I think there are three components to success, hard work, luck and skill. So if you have a lot of luck, I actually don’t know that you need any mindset shifts. You just get lucky and that happens. But that is by far that the minority of founders that I see being successful. So let’s take a look at hard work and skill. I think the mindset of those two things is you put it in the hard work and you do the grind, and you do the things that sometimes you don’t want to do, and you build your own skills and you don’t shy away from saying, well, that sounds hard, that sounds uncomfortable. 

I don’t think I want to go do SEO or figure out how to do pay-per-click ads. I just want to go eat ice cream instead of eating spinach and working out, and yet I want to lose weight. So that to me is just a big mindset for success, is someone who is willing for a time to grind, to put in the time and to do the things it takes to grow the company rather than the things that they want to do. Your desire of what you want to do to grow a company has very little with the optimal approach to growing that company. Another thing that Einar and I talk a lot about is that the successful founders that we see within TinySeed, and the number is right around 15% of companies that we have backed are above a million a RR. They’re seven or eight figure annual recurring revenue SaaS companies. 

So I mean, it’s a big chunk. The industry average, and I don’t actually know where a R got this number, but the industry average is 4%. And so we obviously have picked some good companies and hopefully have also helped them with the mentorship in the community and the advice and the money help them accelerate. But something we see with our TinySeed founders is the ones who succeed, they get a lot of stuff done quickly, they ship a lot of things, and they’re right enough of the time, and they’re not always right the first time, but if they take a marketing approach and they roll it out, or if they build a set of features or whatever it is they’re trying, they just figure out how to make it work 55 60, 65, 70% of the time, there’s some percentage that’s above 50 that they’re generally right and their gut is pretty good. 

So the mindset of shipping quickly and not being in analysis paralysis is important, but also the mindset of generally weighing options and picking the most likely to succeed and having a pretty good founder gut, but also just a good rubric in their head of what’s the next thing that is going to move the needle? What’s the biggest bottleneck in my business? And how can I relieve that? How can I eliminate that bottleneck such that I then discovered the next and the next one? And to me, growing a company is almost entirely about identifying the next bottleneck and eliminating it and then discovering the next one. It’s this never ending. Yeah, it is a never ending hamster wheel. Now that I think about how depressing and this week on depressing startup stories For the Rest Of Us, let’s talk about the never ending hamster wheel that you’re on as a SaaS founder. 

It is, and that’s why the payoff in the end of being able to sell it for millions of dollars makes it worth it, in my opinion. But it is sometimes, I don’t want to say sad truth, just the uncomfortable truth I guess of this is going to be hard. I don’t see many people building SaaS companies who are like, this is so much fun, this is great. It’s like once you get in it, you’re like, woo, this is hard. But it’s worth it because either it becomes extremely profitable or you can’t exit for that, that never have to work again, money. I’ll even take or Lee’s question in a different way. What do I see in founders? What mindset do I see in founders who get stuck at a hundred or a thousand or 10 KMRR and never make it past it? They make the same mistakes over and over. 

They don’t get out of their own way. They move slowly. They only do things they want to do. They launch multiple products at once because they can’t just focus on something and grind. They think they want to build a media company or an audience and then try to sell it to them. Don’t do that. If you’re building SaaS, build your network, not your audience. It really is. It goes back to the don’ts. What was it? A year ago, 18 months ago, I had an episode of Seven Things You Should Never Do As a SaaS Founder. Go listen to that episode. And then I added an eighth a couple episodes later, but it was just that long list of the same mistakes that I see founders and aspiring founders making thinking they can sell everything on Twitter and they don’t have to do any hard work. 

It’s common, and it’s unfortunate that so many people kind of fall into that trap as well as the build it, and they will come thing or just say, okay, so I built this product. Now how do I market it? I see this question on Reddit. I built it. Now how do I market it? The reason I come across it is then someone will mention me my name or SaaS Playbook or TinySeed MicroConf. So then I get an alert and I go out and check it out and it’s like, geez, dude, are you kidding me? All this information that’s out there. I mean, I guess that’s the mindset is the mindset is you should have sought out someone who’s done this before and who is trying to give advice. Hell, I give 30 minutes of free advice on this podcast every week and every other week, 15 minutes of free advice on YouTube. 

Or you can spend $10 and buy one of my books. Or you can spend $500 and buy the SaaS launchpad course. So you can go from free all the way up, but realize I’m saying the things that can help you not make those mistakes. And of course, if you’re listening to this, you already know that, but the mindset of there’s no one else out there who has done it before me, or I’m not going to spend the time to go seek out advice and learn about this stuff. I’m just going to go build something that’s a dangerous mindset. I left that mindset long ago. I did used to have the mindset of, well, I need to figure all this out. I’m going to figure out a new path. No one else is doing the path that I want to do, which of course was bootstrapping. 

And really there it was almost no one else doing it, and it was like base camp and Joel Poll skate at the time when oh five when I was blogging about this. But I’ve let that go. And now when I go to do anything, when we launched on YouTube, we hired a consultant and a content producer. When we launched on LinkedIn, we hired a consultant. Someone knows this better than I do, and they’re ahead of me, and I’m willing to pay both in time and in money to learn that very quickly. Now, if I didn’t have as much budget as I do these days, running a tiny seat of MicroConf, in the old days, I would have educated myself. I would’ve gone to the subreddits, to YouTube, to audio books, to podcasts to try to figure out what do other people know about this topic that I don’t? 

And that mindset of learning from others and taking advice and not just listening and being like, eh, that doesn’t fit with how I want to grow a business. And so I’m going to say in my head that it just doesn’t work, or I’m going to do this other thing anyways, even though people are saying, don’t go B2C and build a two-sided marketplace and don’t build a media company and don’t price your product at 10 or $20 a month and don’t try to go with one time sales or whatever the advice is, but that doesn’t work anymore or that makes me uncomfortable, or it makes me think I’m going to have to do stuff that I don’t want to do, like market and talk to customers and actually do sales calls. Whatever it is, it’s that mindset of I am going to actually learn from others and I don’t have to do exactly what someone else prescribes, but I’m at least going to factor that in when I ask for other opinions and when I go out and read a book or listen to someone talk about this on a podcast, that I’m going to not dismiss them and I’m going to be open to learning. 

I think that that desire to learn and the openness to learning from the right people, I think is a mindset for founder success. So thanks for that question orally. I hope it was helpful. My next question is from Timo from Germany. Timo writes, I run a two-sided marketplace for German speaking talent living overseas. We monetize by offering a paid subscription to employers. I’ve hired a salesperson to call free signups to sell them to the paid plan, which has positively impacted our free to paid conversion. However, we don’t reach everyone and some people simply don’t want to take the call. When we offer people the chance to voluntarily book a call by email, we get very few bookings. But since I know the calls work, I’ve considered making them mandatory to unlock certain features. I’ve never seen anyone do this after signup, which makes me wonder if it’s a bad idea. 

What are your thoughts on making calls mandatory? We are B2B only, and the subscription costs 90 euro per month. So the cost for one quick call shouldn’t be an issue. Yeah, I would agree with that. I know you generally do not recommend free plans, but in our case, the free plan lacks the ability to contact candidates. So there is no value in the free plan other than testing. Thanks for the work and the podcast. This is a great question. I would try it. I would just try it. I don’t know if I’ve ever seen anyone do this, but that doesn’t mean you shouldn’t try it. And I love stuff like this where you’re getting creative with it and you know that something moves the needle and you want to, how do you incentivize someone to do the thing that moves the needle where you can either offer ’em a carrot or a stick, you either penalize them for not doing it, or you offer them a gift or a reward for doing it. 

And in this case, I guess you’re kind of doing both. You’re penalizing ’em and saying, well, that part of the app isn’t available, but also you’re rewarding them right by saying, Hey, you get this feature or this upgrade or this whatever, by doing a call with us, I think I would try it. I just don’t know what else to say other than it might work. And just build it in a way that you can roll it back easily. You get it all in one commit and try it for two weeks, four weeks, whatever makes you comfortable. And my guess is you’ll know pretty clearly within a few weeks of rolling this out, I like the creativity Timo, and thanks for writing in. My last question for the day comes from James M. James appeared on this very podcast several months ago. He is the co-founder of talti and is also now a TinySeed mentor. 

So James asks, I have plenty of questions around hiring at the senior level. How do you balance cashflow with high salaries? At what point is a head of engineering more valuable than a senior engineer? And for product-led startups, what should team composition look like? So I’ll start with the last one actually. For product-led startups, that means not sales led, right? So this is low touch funnel, or you may have sales calls, but low touch funnel, what your team composition look like. So the answer is it depends on your competition. If you’re the only app in the space, you need fewer engineers because you need fewer features to stay competitive. But if you’re an email service provider or a CRM, you need a lot more engineers because you just need to keep pace or you will lose product-market fit. So it does depend, but usually whatever the founders can’t do, meaning if you don’t have any engineering founders, then your first hire has to be an engineer to build, to write the code, build the product. 

Your second hire and product led is almost always customer support because you will be a higher volume, probably a higher volume app with a lot of customers. And so you’re going to have a lot of emails and live chat if you offer it. And then after that, it just depends. That’s where you look at what’s your bottleneck, because I don’t, I don’t believe that there is a great rule of thumb. If there was, I would’ve tried to come up with it, but I don’t believe there’s a great rule of thumb around team composition with a startup because it really is what’s your next bottleneck? And that depends on so many factors like you’re pricing your market, your competition, on and on and on. To me, it’s that decision point. Every time you have enough money to hire that next person, you ask, what’s the biggest bottleneck in the company? 

Oh, we have too many sales demos. Great. I need to hire a salesperson. Or we don’t have enough leads. It’s like, great, I need to either hire a marketer or I need to replace myself, hire someone to take stuff off my plate. So me as a founder can approach marketing and sales. So that’s where I’ll leave the team composition. The answer is, it kind of depends, but that’s the framework of how I would build my team up. The previous question was, at what point is a head of engineering more valuable than a senior engineer? And I think, I know James is technical. I think to me as the founder, if I don’t want to be managing engineers, or at least technically leading them, meaning with the technical decisions, probably by the time I’m at three engineers or four engineers, I’m looking to either hire from outside or promote from within and ahead of engineering. 

Could be like Derek was at Drip, which was, you are the team lead and you’re technically leading them, but I was still managing all the team members at the time. But if you find a head of engineering who has management experience or you are willing to train them up, I mean, again, around three or four engineers, if I didn’t want to be managing engineering myself, I’d be looking for someone to take that off my plate because it is work and it’s one-on-one meetings, and it’s all the overhead of being a manager that you don’t necessarily want to have for the rest of the duration of running the company. And then James’s first question was how do you balance cashflow with high salaries? And I guess my answer is the same way you do with low salaries. If I’m hiring someone for two or $3,000 a month versus 10 or $12,000 a month, it’s similar math. 

It’s just different. It’s just a different amount. I tended to run my companies at about break even because that maximized growth. If I had raised funding, I would’ve started burning cash. I believe Asalt is self-funded, so they can’t burn. But for me, since the beauty of SaaS is that it is MRR and it’s recurring and it’s subscription, I kind of looked at if we grew five grand or 10 grand a month, that was enough for that next person because it wasn’t spiky. Now, if you are in a spiky business where maybe you’re taking a lot of annual payments or you have a usage-based component to your pricing, you just do the best you can. I mean, you can always bring in a fractional CFO to help you model stuff out. You could talk to AI about modeling stuff out. And to be honest, I’m guessing there’s a tool out there that could potentially be built for this. 

But usually what I see companies do, TinySeed companies say when they’re growing quickly and they’re trying to balance cashflow salaries, they get in a Google sheet, they project stuff out, and they do the best they can. It’s always scary hiring more senior level talent. This is why a lot of us resist doing it because it’s a big bet, and cashflow is a big concern. But oftentimes I find if you make the right choice on one of these risky bets, the upside is so asymmetrically in your favor that it can definitely be worth doing. So thanks for those questions, James. I hope that was helpful. That’s my final question for today. Thanks so much for joining me this week and every week. This is Rob Walling signing off from episode 760.

Rob Walling:
It’s TinySeed Tales season four, episode six, where we continue hearing Colleen SCH Nestler’s startup journey. And we ask ourselves, does AI plus a pivot equal success before we get into the episode? Applications for a next batch of TinySeed? Companies are open from now until February 23rd. If you want to be part of a world-class accelerator, receive the perfect amount of funding, mentorship, advice, and community. Head to tiny c.com/apply. And now let’s dive into the episode.  

Colleen Schnettler:
It’s just good to remember, for most people that don’t quit, it eventually works out. Most people, if you look at these success stories and you really dig into them, most people that don’t quit, it eventually works out.  

Rob Walling:
Welcome back to TinySeed Tales, a series where I follow a founder through the wild rollercoaster of building their startup. I’m your host, Rob Walling, a serial entrepreneur and co-founder of TinySeed, the first startup accelerator designed for Bootstrappers. Today in episode six of this season of TinySeed Tales, we’re diving back into Colleen’s journey. It’s been a whirlwind since we last checked in with twists, turns and moments of uncertainty, but that’s what makes her story so captivating. It’s a tale of resilience, ambition, and the pursuit of something bigger. So buckle up and join me as we explore the latest chapter in Colleen’s Adventure. And last week’s episode, Colleen and her co-founder Erin, had decided to go their separate ways and Colleen seemed to be quite stressed  

Colleen Schnettler:
Right after we recorded and we recorded so quickly on the heels of the co-founder breakup. I was pretty upset. You’re absolutely right. There was a lot of stress, there was a lot of anxiety in terms of what to do next. And my immediate gut reaction was, I need to walk away from this idea. I need to walk away from this name. I’m just going to do something else. I have other ideas. I’m going to pursue a different idea. And it had been a while since I had shipped code. And so I really was having a little bit of self doubt about what it takes to get an app from zero to paying authentication, the whole deal. And so I wanted to ship something and I wanted to go in a different direction. And so at that time, I had this idea, I used to be a podcaster, and we always had this problem finding and managing sponsors to the point where we literally stopped taking sponsors. The overhead was just too much of a pain. So I started going down that direction.  

Rob Walling:
Four months have passed since our last conversation, and Colleen dove headfirst into a new project called Get podcast leads.com, seeking to scratch her own niche and solve a familiar pain point in the world of podcasting. But as the dust settled, she faced the harsh reality of market viability. There was certainly a problem there, but would the market actually pay to solve it? So I asked Colleen how she launched it.  

Colleen Schnettler:
Launch would be a strong word. I think I tweeted about it once.  

Rob Walling:
Hey, that’s what we call an Indie hacker launch.  

Colleen Schnettler:
Yeah, well,  

Rob Walling:
Savage,  

Colleen Schnettler:
It  

Rob Walling:
Was brutal. Sick burn.  

Colleen Schnettler:
Yeah, I don’t know. So I launched it, launched on Twitter, so I tweeted about it once and I did start DMing people. I know everyone podcasts. And so I am fortunate too that I actually know a bunch of people that own podcast hosting companies. So it was kind of cool to be able to go right to the source and talk to those guys. And what I found out when I was doing that is podcasting is a tough market. Low margins, podcasters are broke. So the fact that they would shell out additional money seemed unlikely. It could have been, I think it could have been a productized service, but still it’s not like if I’m going to do productized consulting, I should do it in Rails and make real money, not for podcasters who are like, I’ll pay you 20 bucks if you find me a sponsor that’ll pay me 200. The math of the business model just didn’t seem like it was going to work out  

Rob Walling:
And trying to figure out how to ask this question delicately, but could you have found that out before writing the code? And do you feel like you were, do you have a regret about spending the time writing the code or was getting your shipping muscle working again worth it?  

Colleen Schnettler:
First of all, Rob, you crush my soul all the time. It’s fine. You’re used to it like artist history. I’m used to it, so it’s fine. You know what? I think I knew before I built it that this was going to be the outcome, but building it for me was more about getting that muscle of shipping activated again because it had been so long since we had shipped because I hadn’t gone zero to full app in such a long time. I just needed to activate that muscle. And I had really wanted to play with the AI APIs and I hadn’t and was on the sidelines watching everyone, and I was like, I want to get into this. This is the future. And so the podcast thing was cool because there’s this huge podcast, API that I bought data from and then ran it through Deep Graham to transcribe and then ran it through OpenAI to try to extract sponsors. So I got to piece all these different APIs together and I had a lot of fun and it gave me a lot of confidence in my ability to ship something. And so I do not regret it, but I do think I already knew the answer because again, if you’re getting a podcast sponsor for 200 bucks, so what are you going to pay for that? Not much.  

Rob Walling:
Yeah, economics don’t work out. Do you think it is tasteless to say that podcast was your rebound relationship after Hello Query? It was like I knew it wasn’t going to work out, but to regret got you back in the game,  

Colleen Schnettler:
It’s totally appropriate. That is absolutely correct.  

Rob Walling:
Well get podcast leads.com may not have been the runaway success she envisioned. It reignited her so-called shipping muscle. It was a necessary step, a rebound relationship of sorts that ultimately led her to her next endeavor.  

Colleen Schnettler:
So then I was at the bottom of another trough of Sorrow. I was like, oh wow, this was a terrible idea, which I think I knew, but I really just wanted to ship something. So now you’re at the bottom of the curve again and you’re again like, crap, what am I going to do? And so I went back full circle to what is my unfair advantage here? And it’s hard with this. You have to separate sunk cost from Unfair Advantage. And so that was really my struggle is it was another time of a lot of kind of confusion, anxiety, whatever, whereas well as my unfair advantage that I have been immersed in reporting for two years or is that a sunk cost? And I just walk away and I realized that I still think that’s an unfair advantage that I have been immersed in this world of internal reporting. 

And it is a problem. People want to solve it. It is so clear. It is so hard as someone trying to start a business just to come up with a problem that people are willing to pay money to solve. And I was like, okay, if I take all of the complicated emotions around what I have already done going down the Hello Query route, if I separate that from the practical, logical, what is the business opportunity here, I still think there’s a business opportunity there. And I had been playing around with all these APIs, and so I was like, I wonder if there’s a way I can combine what I learned with GET podcast leads and the new tech out there and the original vision. And so what I have now, what I just launched, it’s AI assisted SQL Report builder. So it’s still called Hello Query, but it’s a different product  

Rob Walling:
And describe how it works, who would be a user at a company? And I know that I’ve seen the interface, it’s relatively simple, so describe what it does.  

Colleen Schnettler:
So I just launched it last week, so it’s still very early in terms of ideal customer. So what I am finding is when I first built it, I had thought it would be more for the developers to kind of remind you how to write SQL because we’re not all checking all the time, but everyone I have talked to wants to put it in front of their non-technical teammates.  

Rob Walling:
Internal  

Colleen Schnettler:
And internal  

Rob Walling:
Users.  

Colleen Schnettler:
Yes, internal users. And so what that looks like is that looks like Jim from Accounting asks a natural language question that’s converted to SQL under the hood, it’s run against his database. And the product though is the reports, Jim, if those are the answers that Jim wants, he can then export it to CSV, export it to Google Sheets. He can schedule that report to be sent to him and his team every week rerun and sent. So the product is really all the reporting around the initial query.  

Rob Walling:
This reminds me of a quote that you said in the last episode where you said, looking back, we should have shipped SQL to CSV because we could have done it quickly and you and Aaron conflicted on that viewpoint. This feels like an AI assisted SQL to CSV or at least the vision that you had. You agree with that?  

Colleen Schnettler:
Yeah, a hundred percent agree. And the AI also, I wasn’t even going to ship that. I added that. It was almost going to be more of a marketing gimmick to be like, oh, ai. And then people were so excited about it and I was like, oh, right, okay, people are so excited about this, so this should be part of the offering. But yeah, that’s exactly what this is, is this went back to, I was like, you know what? Let’s go back. Let’s think about what I wanted to do. And I wanted to do little take off little bites of this problem, little bites at a time, put it in front of people, let the vision change as needed.  

Rob Walling:
And that’s something you and I have been talking periodically about how do you get just a little more data or a little more information so you’re not guessing and you’re not just thinking and ruminating because you and I can sit for two hours and guess what people are going to do. And in fact, I think it was three weeks ago, you and I had a chat and you were asking the question of, I’m concerned no one’s using it, it wasn’t launched yet and I’m concerned, are people going to be willing to hook up production databases? And on that call I said, well go ask them. Right? Should you just launch? It was a question, should you just launch? Go tweet it, I’ll retweet it, see if people do it. And what was that experience like for you?  

Colleen Schnettler:
First of all, amazing and amazing because for whatever reason, and I think it’s just the way that the speed at which we were working in terms of shipping product last year, there was a lot of thinking. It was like we have to ship the right thing the first time. So we have to have figured all of this out, which is terrible. But I do think it’s important to remember we got into that mindset because have you heard that thing? All advice is true. I dunno, it’s some famous article. It’s kind of like all advice is true because it worked for the person giving you the advice. So you’re always going to have people in the business building community who have both sides of this. You have the people who ship frequently and iterate. Then you have the people who are like, oh, we spent two years building this thing by talking to our customers and this thing is amazing and successful. 

And so I say all of that to kind of explain why we were in such this. We’re going to think the perfect product the first time. And so going back to this whole, one of the biggest reasons I think this particular product could fail will be because people won’t connect their production databases. And you’re like, well, you can just find out. I was like, yes. I can literally just find out. It doesn’t have to be. Maybe they will, maybe they won’t. Maybe this group will, maybe this group, I can just ship the thing that I’ve built and then see if people hook up their production databases.  

Rob Walling:
And this is a luxury, there’s this often this debate of should I build an audience? And you’ll see Laura Rotor and Jason Cohen and I on Twitter the other day saying, not for SaaS. If you’re going to sell info products, build an audience. Not for SaaS, not worth it. There’s other things you should do, but there are exceptions to it. And I’m not saying exceptions that you should build an audience, but where it is nice to have a group of people who know who you are and whether that’s a thousand followers on Twitter or 2000 or whatever, you tweeted it out, here’s this thing, here’s a GIF of the screen, click here to try it out. And that is a really nice luxury. If you had no social media following and you had no network, no community, you could still do it. Hell, we’ve all been there. I did it 15, 20 years ago and you’ve done it yourself, but this sped up the process is what it did.  

Colleen Schnettler:
That’s what I was thinking as you were saying that this just makes the feedback cycle faster because I can access people who are my target audience faster,  

Rob Walling:
And I feel like it’s a virtuous cycle because it ties back into the shipping muscle comment you made earlier of you shipped and then you get really quick feedback and that feedback is the dopamine rush of good or bad, I’m doing something. And that’s where the build in public hashtag, I could take it or leave it. I think the biggest benefit of building public is not, Ooh, look at me and I’m going to get customers from this. I think it’s the feedback loop of really quickly, especially, well, if you’re building in public and you’re targeting the people who are actually listening, because the problem is if you make anything that’s not for indie hackers or developers and you put it on Twitter, you get indie hacker developer feedback and not, and usually, which is the opposite of what you actually want, but in this case, developers could feasibly bring it inside a company. Maybe they’re not the target user, but they at least know how it works.  

Colleen Schnettler:
And again, I think in the end, not that there’s ever an end, but I don’t know if I’ll be targeting developers or finance teams or C-Suites. But yes, the developers will have to touch it at some point and they can be the people, often the people being asked to pull these reports, so many people were like, oh yeah, I get asked to do this all the time. It’s such a pain, not my job. So they are for me, for them to pull it into their company.  

Rob Walling:
And so where do you stand today? Then you launched this thing three weeks ago, you got feedback, people hooked it up to their production database. Do you have more learnings and you know what features they’re going to build next? Is there more research thinking, data gathering to be done?  

Colleen Schnettler:
It’s tough. I mean, this whole thing is tough. If we all knew what to do, we’d just do it. I think I learned enough with a very small group of initial people who are interested to know what needs to happen next in terms of feature sets. So I am trying to, I don’t dunno if I’m going to go the whole week, marketing week, coding week thing, I don’t know if I’ll do that, but I am trying to make sure I stay in a cadence where I’m talking to people and I’m building and what I have learned. So I feel like there’s this whole concept with building a business, especially as a solo founder of Emotional Runway. I don’t know if we’ve talked about this, but it’s like this concept of, okay, so it’s this concept of emotional runway where this is a ultra marathon. This isn’t going to be done despite what people on the internet tell you, you’re not going to shift something in a weekend that’s going to make you a million dollars. 

It’s like highly unlikely. And so what I have found for me is I really, really enjoy being in the code. I like talking to people, but it’s very draining. So I’m trying to balance the talking to people and especially when you talk to people and you think your idea is so brilliant and they’re like, I can’t use it because of this or I can’t use it. I mean that’s demoralizing. That’s hard to come back from and come back from and come back from. And so what I’m trying to do is I’m trying to spend a week, maybe 10 days shipping a new feature that I know I need and then following up with these people who are trying it to see how it’s working for them. So kind of getting that cadence as I go forward.  

Rob Walling:
It sounds like a good plan. Shipping, often, shipping early shipping, often small pieces to piggyback on your emotional runway, I have this thing that I tweeted once and now I say it now and again and it’s funded. Companies fail when they run out of money. Bootstrapped companies fail when the founder runs out of motivation, and I would count, you’re a mostly bootstrap company, and what I see, what we see with TinySeed and outside of it is some people will have some traction after a year or 2, 3, 4 years. They’re at 4K, MR, 5K, but you just get so tired of doing it and you watch other of the success stories come out and you feel like, can I just, so that’s where bias towards action mostly working on the right things and getting enough of them correct that you have momentum because once you lose momentum, it’s demoralizing and you can only beat demoralized for so long. And so that’s where you’re shipping your shipping muscle that you’re rebuilding right now as well as the fast feedback cycle, I think is going to help with that motivation. It helps refill, it helps shorten your runway. No, the opposite. It helps lengthen your runway or helps kind of refill your motivation, your bucket so that you can keep going.  

Colleen Schnettler:
Yeah, absolutely. And whenever I start to panic a little like, oh my gosh, this isn’t working. Okay, I only shipped it two weeks ago, so it’s a little early for that, but I try to think about that, right? I’m like, okay, this goes on as long as I want this to go on, right? In a positive way in that yes, this needs to work on a relatively quick timeline because got to pay the bills, but also I can spend a year, I can spend five years, this can be my, I want this to be my future. I don’t want to go get a job and I want that so badly. I think it’s just good to remember for most people that don’t quit, it eventually works out. Most people, if you look at these success stories and you really dig into them, most people that don’t quit, it eventually works out  

Rob Walling:
One decision that I think you’re facing that still feels very muddy, and I want to bring it up because it is muddy. I want to show people listening to this that in hindsight, after this season airs and they’re like, well, Colleen was wildly successful with Hello Query. She always knew she would be. She knew exactly what to build. Everything’s great and up into the right, but looking back in the midst of it, you usually really are uncertain as to what you’re building, who you’re building it for. It’s very muddy, right? And one good example of that is right now you’re building this AI assisted SQL to CSV reporting engine for internal BI users, for people to query stuff. And that’s kind of where you have interest and that’s kind of what the product is today and you’re adding features on. But there’s been this other request, a few of them around, well, could this just tie into all of our marketing tools and allow us to query what Google Analytics plus Mixpanel plus Heap plus just whatever marketing stack to, I would love to just ask my marketing stack questions. How many trials do we have last month? How are they converting? Are they up? Just whatever people can imagine that. Maybe it’s a dashboard, maybe it’s not, but that is a different direction. Those two are not the same thing. The marketing query engine or the marketing versus an internal BI tool. What are your thoughts on that decision, and is it weighing on you? Are you uncertain about it? How is that going for you?  

Colleen Schnettler:
You’re right, they’re not the same thing. They’re two totally different directions, and I find both of them to be really appealing.  

Rob Walling:
In the world of startups, decisions are seldom clear cut. Colleen finds herself at a crossroads torn between two compelling directions for her product catering to internal BI teams or tapping into the excitement surrounding marketing analytics. It’s a classic case of the curse of the audience, a dilemma that highlights the challenges of navigating the murky waters of finding product-market fit.  

Colleen Schnettler:
On one hand, I think if I went the marketing route, people would just be, I think people in my network, this goes back to is it worth having a social media following? My people would be so excited if I put AI on top of your Google Analytics. They would be so excited. That is one direction and people have asked me for that. And then you have this other thing, internal BI tool, and honestly, I don’t really know. I am just taking my best guess. And my best guess is that one company in particular that has approached me about the internal BI tools, like a pretty big company. And I realize there is a demand for this inside big, bigger established businesses on the BI side, and that’s a customer that would probably pay a premium price for it. Whereas marketing data marketers have a lot of money, but I also think they have so many tools, so many tools that their disposal already, and they probably already kind of understand Google Analytics. So I don’t know if that AI on top of Google Analytics is as valuable. So that’s why I’m going BI tools, but I think this is a false, there could be a false demand signal. If I launched the Google Analytics thing, my people would be so excited. So that’s why I’m really torn on the decision, to be honest with you. I think I could go either way.  

Rob Walling:
I call that false demand, the curse of the audience. And if there’s two curses to it, one, you tweet it out or you email your list and everyone’s like, oh, I want to check out what they’re doing. And everybody’s really interested and then they’re not actually that interested to solve a problem, but they just want to interact with you. And then the other curse of the audience is when you burn through your entire audience, I did in the early days of Drip where it was like I have whatever, 10, 15,000 people on an email list and Twitter following and everything, and we launched this product that was kind of half baked. It was like MVP, and people looked at it and said, it just doesn’t do enough. And so a lot of churn and then we rebuilt. We had Drip 2.0, it was actually really good automation, all this stuff, and when I went back to my audience, they were like, yeah, we already took a look at that, and people didn’t want to try it again. 

Yeah, it was crazy. Multiple people said, oh, I didn’t, that’s what it did. Because they had all given me the benefit of the doubt the first time. So that’s why one of the reasons I wanted to call this out is A, it is a very fuzzy and cloudy decision, and neither you nor I know what the right answer is, but the right answer is to keep pushing forward and to try to get more data on both fronts and to make the best decision you can. Being a founder is making hard decisions with incomplete information, and you’re the perfect example of that right now with just incomplete information on all the fronts, and actually I posit that it doesn’t get any worse than when you are pre-product market fit. That is when you have the least amount of information and the most cloudiness, and that’s why it’s harder to save, write blog posts or build frameworks or write books around the pre product-market fit phase that you’re in, because it is just so kind of, it depends. 

You have to get more data, you have to make a decision. There is no, if you were like, Hey, I’m at 10 KMRR, I have 10 customers each paying me a thousand dollars a month, they are all either healthcare startups or IT departments of law. I’d be like, great, I can rock and fuel that. We can get that going. There’s an engine there, but until you get there, it can feel a bit like wandering in the desert and it’s just you got to keep going, got to keep shipping, and you got to keep gathering data, which is exactly what you’re doing at this point. We move towards wrapping up the episode, but I left the recording going, Colleen and I have been recording this podcast over the course of almost eight months, and I asked her how she was really doing  

Colleen Schnettler:
Fine. It’s more just like I’m still in the phase where I don’t know if this is going to work or not, and it’s like, so it can be a little bit hard to get on here and be like, yeah, this is totally going to work. I know I’m making all these decisions. All of that is true. But you don’t  

Rob Walling:
Have to say it’s going to work though. Don’t feel like you have to say, don’t even feel like you have to be upbeat. Say that. Yeah, you didn’t have to say that. You don’t have to fake it. You don’t have to even be upbeat. You could come on and I could intervene and you could be like, I feel terrible about this, and I’m super doubtful and I’m thinking about shutting it down. If you wanted to say that, say that. Be authentic to yourself. You’re not there. I don’t feel  

Colleen Schnettler:
Like you’re there. I’m not there. No, but it is talking about it. I’m like, all of the things I said are true, and I do feel good about it, but also, man, I guess it’s just we’ve been recording this podcast for so long and it’s like, what do I have to show for it? Right? I’ve been doing this for so long, it feels like, and it’s like, man, here I am again, not making any money.  

Rob Walling:
It  

Colleen Schnettler:
Just a little, it’s fine, but it’s just a little like, oh, you think after doing this for a year, I’d be a little further along  

Rob Walling:
At this point. I stopped the recording. I think most founders have experienced this feeling, wanting to be further along, wishing they had a clear direction to work toward. One thing is certain Colleen’s journey is far from over with each twist and turn. She learns, adapts, and keeps shipping even when it’s really freaking hard. Colleen stands at a crossroads torn between a couple of promising options. What decision will she make and will she find traction? That’s next time on TinySeed Tails.

Rob Walling:
This is Startup For the Rest Of Us. I’m your host, Rob Walling. This week I’m joined by fan favorite Derek Rimer, and we answer listener questions ranging from do free trials suck, how do you decide what moves the needle in your business? And two or three other listener questions before we dive into the questions. TinySeed, the accelerator I run for Bootstrap SaaS Companies is open for applications until February 23rd. Head to TinySeed dot com slash apply to find out more. And if you’re interested in the right amount of funding, amazing world-class mentorship advice and community, that’s c.com/apply. And with that, let’s dive into listener questions. Eric Rimer, welcome  

Derrick Reimer:
Back to the show. It’s good to be back. It’s been a couple of months, I  

Rob Walling:
Think it has indeed. I’m stoked to get into some listener questions with you today. I always hear after our episodes go live that people really enjoy our conversations and our rapport, so  

Derrick Reimer:
Awesome. Well, I enjoy having them.  

Rob Walling:
It’s good to have you back, man. So I’m going to dive into this first question from anonymous about entering a market with an established competitor and anonymous writes, Hey Rob, I wanted to first thank you for all you’ve done for the bootstrapped and mostly bootstrapped community. You’re an inspiration to me and countless others. My wife and I love listening to your podcast Every chance we get, and you have inspired us to take this next step in starting a bootstrap SaaS business. So I need to pause there. There’s a couple things. Number one, I’ve been called Chief Instigator. Chief troublemaker. People will say, my spouse is mad at you. And I’m like, why? And they’re like, because you convinced me to start assessment. So I get the feeling that when Anonymous writes this, they’re both thanking me and also kind of punching me in the ribs, like, I will never forgive you for convincing me to go down this path.  

Derrick Reimer:
It cuts both ways.  

Rob Walling:
It really does, right? Yeah. Certain times. And then the fact that anonymous listens with his wife, I think is hilarious. This isn’t you, right? You didn’t write this question in.  

Derrick Reimer:
No, but my wife does listen to at least our episodes, and then I think she’s listening to Colleen’s episodes right now. We hung with Colleen  

Rob Walling:
Tiny tails. Oh yeah, yeah. It’s always fun when you know the person, right?  

Derrick Reimer:
Yeah.  

Rob Walling:
Cool. Oh, so we’ll continue. I hear this every once in a while that what he says is, my wife and I love listening to your podcasts, and I think they’re forcing their wife to listen. Do you love? And she’s humoring you. That’s kind of how I questioned it. But no, thanks for the comment there. So back to the email. My question is about how to launch a SaaS product in an established market. The market I’m entering is led by a company that has existed for five years in a relatively immature space. Although they have been successful, their business has not adequately invested in their software, which sounds familiar and often uses deceitful tactics to make the sale, which also sounds familiar. I believe I can catch the company flatfooted and lean on many of the strengths smaller startups have at their disposal, such as speed, design improvement, listening to my customers, et cetera. 

If I’m a new player entering the market, how do I properly address my competitor to prospective clients while being professional? Do you stay above the grain and focus on how my service and customer experience is superior? Or do I explicitly point out the limitations of the competitor, the outdated product design, deceitful tactics, high turnover? Are there legal risks I should be aware of? Thank you, Rob. I look forward to hearing your insightful insights. And before I toss it to you, Derek, to take the first crack, I want to read a brief poem, a brief disclaimer. I love to chat. I love to share. This is an original composition between me and chat, GPT. By the way, I love to chat. I love to share about startup’s growth and how to prepare. I’m not a lawyer, I don’t advise on contracts, filings, or legal ties for lawsuits, trademarks, taxes, to find a pro. That’s what they do. So take my thoughts, our thoughts, use them, right, but for the law, get legal insight.  

Derrick Reimer:
That’s the best legal disclaimer I’ve ever heard.  

Rob Walling:
There it is. Alright, so we’re not lawyers. We can’t give legal advice, but we are two guys on the internet who have opinions. So you want to weigh in on this one  

Derrick Reimer:
First? Yeah, yeah. So I don’t know if there’s a right or wrong here. I mean, you see a whole spectrum of approaches around this. My approach has generally been to try to craft the narrative around how you’re a better choice for your target market than the competition. So keeping it kind of framed positively on what you bring to the table and drawing helpful comparisons that speak to the customer’s underlying motivations. So with Savvy Cal for example, we tout ourselves as more thoughtful and more collaborative than most of the other players in the market, specifically our largest competitor. We have a comparison page where this narrative is sort of fleshed out a bit, and we claim that and we back that up with features that support that and things that are kind of unique to our product. So we’re really focusing on this is what we have to offer and we’re telling this narrative that hopefully resonates with you and it’s not necessarily a narrative that the other competitor could tell because they’re doing different things. 

So instead of saying, this competitor uses deceitful tactics, you could say, we will never lock you into X, Y, and Z, or we have a transparent cancellation policy. And if you’re talking to someone who has experienced those deceitful tactics with that other competitor, that’ll resonate in a particular way. But worst case, you’re just expressing something positive and noteworthy about yourself. So that’s how I think of it. I usually avoid those stupid checklists are skewed and biased where you get all the green check marks and everyone else gets all the red Xs. I think people see through those pretty easily. So I usually try to stick to more of a narrative around what’s the story of why your product’s better and keep it mostly focused on yourself, but obviously identifying those areas where clearly you’re casting yourself as separate from the others.  

Rob Walling:
I like that. I think there’s three. There’s a continuum of what you do here. Do I name ’em by name and put a bunch of negative press out about them? Or do I say nothing that maybe the two ends of the continuum? But let’s just take three points on that continuum. You’ve just named one, which is you’re not mentioning a competitor, you’re just calling out your pros. And I think that’s the most kind of chill, relaxed, non-confrontational way to do it. And if that’s, it’s totally viable and reasonable, I think it’s a good way. If that’s your personality, that’s how you do it. Let’s take a middle ground, which is, are you tired of deceitful sales tactic? You know what I mean? You are a little bit all up, but you’re not naming ’em by name. That might be in the middle. And that’s what we did. 

Well, no, the drip, remember when the drip homepage was just a long form sales letter and it did call out a few companies by name and it was like Marketo part, Infusionsoft. I think it was never MailChimp and HubSpot by the way, because I just always respected those founders. I respected the companies when I was write that marketing copy and get all angry, it wasn’t at them. We did name some folks by name on that homepage. And that of course is the third one is to come out and name people, not people I guess, but competitors, company names anonymous, asks, are there legal risks? There’s legal risks with anything. What’s going to happen? We’re not, lawyers can’t give advice, but what’s going to happen is if you put the company’s name on your website, they’ll either completely ignore it and not care, or they will come and write you a cease and desist or a huffy worded email. 

The odds of someone suing you without ever giving you any notice is really, really low. And we do see TinySeed companies from time to time get cease and desist of this manner. Or again, a huffy email from a CEO demanding, it’s a legal threat, but it’s just some CEO pound on the table. So we did it, we named companies by name, but the thing was they were so big we were nas just little gnats compared to them. And I think if we’d gotten big enough, they probably would’ve said something, but it was literally on our homepage. So it’s a risk tolerance thing, but I don’t think there’s a ton of risk. I agree with you. Having no, having a comparison page like us versus them to me is fair game. And that’s pretty common alternative to them. You’re trying to rank for stuff at that point in Google, and so people can compare. 

I agree with you about the check boxes. You can do the checkbox thing or not, but I think there’s a continuum here and a little bit of it comes down to your personality as a founder. You and I both know people who are just, they just give fewer s than you and I do is how I would phrase it. Or they’re just a little more aggressive or they like getting into arguments. They like sparring, they like to kind of have conflict. A friend of yours and mine, Matt Sing does not give a shit if someone’s mad at him. You know what I mean? And to his credit, that’s his personality. So him as a founder would probably go all the way to that third stage that I talked about, which is just name him and fight it and it brings him energy. For me personally, conflict and arguing or being called out. I can do it and I can handle it. I have the thick skin, but it is exhausting for me. And so I have to pick as I’m doing marketing or as I’m doing sales or thinking about this, I do have to think long-term, what problems do I want to create for myself? Starting a company, trying to get something off the ground, you’re building it, you’re creating a lot of problems for yourself just in doing that and which other ones do you potentially want to stir up is kind of the way I think about it.  

Derrick Reimer:
Yeah, and I think that the other thing to consider is what is the brand you want to create, which is a little hand wave, but are you entering a space where you’re going to be the bulldog fighting everyone and you’re going to attract a certain type of customer who that resonates with? And other people will be totally turned off by that. If you’re just super negative and you’re just going after another company, then you’re sort of painting yourself. You risk painting yourself as a company who is just a response, a negative response to somebody else versus something that’s positive. And I think that that can paint you into a bit of a corner with your market as well. And certain people will just be grossed out by your marketing if it’s all kind of point finger pointing at someone else. So I think it’s like who do you want to attract? And it just comes down to strategy, I guess. Where do you think the opportunity is? Is it with and the industry too? I think there’s certain product spaces where it’s just inherently more combative and then others where it’s not. So it’s knowing your space, I think too,  

Rob Walling:
And knowing how your customers and potential customers view this competitor. There are some companies that are just despised, they’re just widely hated and it’s like they charge too much, they gouge us, their support sucks. I mean, let’s name a few names. Most people I know who interact with Salesforce in any way as a customer, do not like them. I’ve never actually been a customer. No, I have. Because we were paying six figures a year for Slack, for MicroComp Connect. It was outrageous. They were so hard to deal with and they were a pain in the ass. So if I was competing with Salesforce, would I throw shade at them? I would because I know that people don’t like them. I mean, Infusionsoft back in the day was the classic example. Anyone who used Infusionsoft, which is now called Keep, and they just sold the private equity for a one x less than one X error multiple, if I’m being honest. 

No one liked their software. It was just old and clunky. And so it was easy, it was an easy target and I never felt like I was being so aggressive in the copy. I keep saying it was you’re in my company. But I wrote the copy. I remember I writing those, the homepage in that and being almost angry for our customers. Customers would come over to Drip and they would just tell us horror stories. And I was like, that sucks. And that was kind of the motivation of like, ah, that how I justified it to myself. And I don’t know that it ever came off. I don’t know if it came off aggressive to people, but it felt justified. Now if let’s say I did that to Stripe, I think Stripe is pretty widely loved. I know some people have complaints on my Stripe account, whatever. There are some things on the edges, but compare Stripe versus PayPal. Most people don’t like PayPal. And I would say most people like Stripe. I like Stripe. Punching at Stripe in this way I don’t think would go over that well.  

Derrick Reimer:
Yeah, it’s just bad strategy. I think that is a good point. If I were competing with Salesforce in some dimension, I mean whether you’re attacking them by name specifically or you’re attacking kind of the notion of the Salesforce type product where it’s like they’re going to try to aggressively gouge you and they’ve gone so far at market that they have highly optimized pricing, you will pay through the nose just sort of what they stand for. And they don’t have total control over that. It’s the reputation they’ve gained from the decisions they’ve made in the market. And so you’re putting yourself in the position of you’re an advocate for your customer and you’re telling the story that resonates most with your customer is the most important thing,  

Rob Walling:
Right? Anonymous asked several questions, but one of them is, do you stay above the grain and focus on how my service and customer experience is superior or do I explicitly point out the limitations of the competitor, outdated product, blah, blah, blah. And for me, we’re talking marketing website right now, but what if you get on a sales call? What would you do? So for me, I would want to find out if you’re currently a customer of that competitor, that’s what they’re comparing you against. You have to point out the differences. To me. Usually I would say something like, oh, you’re comparing us to X, Y, Z competitor, or you are currently a customer of X, Y, Z competitor. Would you like to hear how we’re different? That’s how I would phrase it. Would you like to hear how we’re different people tell us that we are much easier to use? 

Obviously our sales process is different. We’re month to month, not a year, whatever you point stuff out. I think if I was on a sales call and the prospect started leaning into, yeah, I feel like I really got hornswoggled in this hole. That’s a good one. Horn Sled 1887 called it once it phrased back, I dunno why you that I feel like I got really tricked on this thing that yeah, we hear that quite a bit. It’s a bummer. We definitely don’t do that. You know what I mean? Yeah. I would kind of almost go with the vibe of the person I’m talking to a little bit and that’s different. You can talk as much smack as you want on a sales call versus putting it in public on a marketing site. So I think those two things are different. So thanks for the question anonymous. 

I hope that was helpful. Our next question comes to us from X Twitter. This is Sander Fish at Sander Fish who asks often it feels like SaaS success is an accumulation of many small decisions and improvements over time. And me jumping in, I think any success, anything you build is you build a brand, you build a reputation, you build an audience, you write a book, you build. Yeah, I think you build any company. I think most things in life to get good at running or lifting, I think it’s all that small decisions and improvements over time. So I like this Sander fish’s question is how do you identify what really moves the needle? And I think we should limit this one to SaaS and not talk about all the other things I just mentioned because is really how do you identify Derek Rimer as founder of Sical? How do you identify what moves the needle in your business?  

Derrick Reimer:
Yeah, it’s a great question. It’s a very broad question, but I guess I’ll start by riffing on the high level of this, which I think it comes down to, comes down to having a strategy, which is just the most simply put, how do you win at the game you’re trying to play? So this implies that what game you’re playing, are you trying to build a rocket ship unicorn? Are you building a TinySeed type scale business? Are you building a true lifestyle business? So it’s like what game are you playing to orient yourself around the kind of success you’re trying to achieve? And then once you have that set, then you can start working with a strategy of how do we get to the goal that I want? Do you want to work four days a week and spend a bunch of time with family? Like okay, that’s going to mean different decisions on moving the needle towards the success you’re trying to achieve. 

And then once you have the strategy, then you can tactical decisions in support of what you’re trying to achieve. So if you’re trying to grow really, really fast, then making some endeavoring down a path towards a channel that’s only going to send you a trickle of prospects a month, probably not a great decision. You need to orient your sites higher. Maybe that means you need to raise a little investment to be able to take a bigger swing at something. So I think it’s orienting what constitutes moving the needle for what you’re trying to achieve. And that’s something you have to define first. So sort of a non-answer, I’m not really answering specifically, but that’s how I think about figuring out what even constitutes moving the needle.  

Rob Walling:
And it really depends on the stage of the business obviously. I mean we can say it depends, but I do think there are certain founders I know who are better at identifying what moves the needle. And there are certain folks who are not as good, and this is that thing that a R and I talk about a lot about the TinySeed founders we see succeeding, they do a lot of things, they ship a lot of things relatively quickly and they’re right the majority of the time. And by majority, I say it on this podcast over and over, it is not 90%, it’s some number, it’s 60%, 65 set. I don’t know, you’re right, just enough, but you’re doing a lot of stuff. You’re not flailing, but you’re shipping high quality things quickly, whether that’s features or marketing or whatever it is you need to ship. 

The biggest question that I ask myself as any business I’m doing, whether it’s SaaS or whether it’s MicroConf or TinySeed, there’s always one and only one bottleneck is how I see it. And now I’ll take that back. There are usually, there’s one that is the most critical at the time, and then there’s five that are below that. But oftentimes you don’t even know what those five are until you fix that first one. And you don’t know if fixing that bottleneck will get you another 50 KMRR before you see another bottleneck or if it’ll get you $500 of MRR before that next bottleneck. It’s really hard, at least for me, I can’t see the second one, but in almost every business, every tiny C call or even when we’re doing strategy and r and I talking about how to grow TinySeed itself, how to grow MicroComp, how to whatever, make more revenue, get more people in the audience, it’s like what’s the next step? 

What’s the one thing? And if I’m thinking about SaaS in early stage, it’s like I have no one interested in buying this thing that I’m thinking about building that is the actual bottleneck. It’s not the product, right? It’s interested people, it’s sales, it’s marketing, it’s interest. And if I’m doing 10 KA month and maybe I’m not growing, usually you can look and be like, oh, it’s because churn is high. That is my single biggest buy, 11% churn. This is business on fire. I have to fix that before anything. And if I’m at 10 KMR, that’s probably lack of product-market fit. If I’m at a hundred KMRR and it’s 11% churn, that’s a whole different conversation. That’s my short answer is what is the bottleneck? I mean, we are right now with TinySeed, we’re launching a premium coaching plus masterminds and stuff. So it’s similar to the tiny seat accelerator, but it’s paid and it’s for 1 million a RR founders between what’s 1 million end up. 

That itself is something that we’re working hard on. And how do we decide what moves the needle? Well, we look and we’re like, well, right now we have no one committed to paying for this, so how do we get that? And then it’s like, and we need a coach or two and we need the program itself, which we know a lot from TinySeed. So those are the only two things we should be working on is finding more people and finding coaches. Once we have those, we can do anything else. And I think the biggest problem that developers especially and makers and builders do is they either don’t know or they kid themselves. They convince themselves that the bottleneck is actually the product and features. So fun. It’s the fun part and it’s easy to just be like, well, I’m going to tell myself that’s the bottleneck. But it’s like that usually it’s usually not the product.  

Derrick Reimer:
And I think it’s a good point that there’s usually one thing, but that one thing may set off a cascade of different sub things that need to happen. And so I think to take the example of fixing churn, it’s like that one comes up all the time where it’s like, well easy, just fix your churn. It’s like, okay, well that is much easier said than done. So then it means maybe you’re attracting the wrong type of customer. You have problems in the product where you’re not meeting their needs and so they’re churning out maybe you’re, so it could be prequalification, could be product problems, could be on and on and on, positioning, marketing, all this kind of stuff. So then you start breaking the problem down and you start busting this up into small little things. But I think the hard part can be you get lost sometimes in the forest when you do this and then you find yourself five months later you’re working on something and you’re like, wait, is this in service of the thing that is still the biggest problem? 

Are we still trying to reduce churn? Do we feel like churn’s in a good place? So I feel like the game is having that step back to reflect on what’s really bottlenecking the business, and then oftentimes it means six months to a year of work that is in service of that, but you’re going to kind of lose sight of that. You have to get down into the weeds on actually working the process. So I think that probably takes regular check-ins and reflections on what’s the state of the business? Is this still the biggest problem? Are we still prioritizing our day-to-day tasks in service of that thing? And that’s the challenge I think  

Rob Walling:
I agree with you. Yeah, it’s easy to lose it when it’s over a long-term like that. This is where, as much as I don’t like process long-term planning, any of that, this is where it makes sense to be like, Hey, what’s our plan for this week, this month, and this quarter, maybe this year? It depends on the maturity of the business. If you’re early stage, it does not make sense to do that, but with my businesses Micrograph TinySeed, they’re six years and 15 years old and they’re multimillion dollars and there’s multiple employees, it actually does make sense for us to sit down and be like, loosely, what do we want to do in 2025? What is that? We don’t have a strict annual plan of every week this happens, but during the year, I think we’ll do this. And then we start looking at quarters and breaking it down, and we do look at what’s going to move the needle. 

And if you’re a SaaS company and you’re early stage or even middle stage, it’s like I could see this is where you do say, well, 2025 is the year I conquer churn, and Q1 is going to be these things and month one is going to be these things. And that I think having some type of plan that’s written down somewhere could be a Google Doc with a few bullets or a spreadsheet or something that you refer back to, can be helpful to keep, as you said, forest for the trees, right? So thanks for that question, sander. I hope it was helpful. 

Most marketing agencies promise growth, but never move the needle. But Cory Haynes and the team at Conversion Factory, they know how to deliver results. Derek Rimer said that under Cory’s marketing leadership savvy cow broke into the market with a successful launch and steadily grew to several thousand customers. And Eunice coup of less annoying CRM said that their first a b test with conversion factory delivered a 20% increase in visitor to trial conversions within the first two months. Imagine having a senior copywriter, a designer, and a web developer at your disposal to turn every marketing idea into a reality. Head to conversion factory.co and mention this podcast when you book a call to get $1,000 off your first month. That’s conversion factory.co. Our next question is from Austin on how to sell slash market a SaaS before it’s built. So you can tell I did take a few early stage questions. This time I’ve been doing only the later stages, but I forget I’d bounce around considering this question is from August of 2023. Sorry, Austin, Austin’s like, we just hit a millionaire r bro, I don’t need you. We’ve  

Derrick Reimer:
Pivoted five times and we’re not even doing that.  

Rob Walling:
Totally. It’s not relevant at all. I still like the sentiment question. Hey Rob, thanks for all the great advice you put out. I hear from advisors that you need to start working on the marketing already before or while building the product. Download my free ebook, start marketing the day You start coding Rob Walling dot com and your email address back to Austin’s email. I’m working on a SaaS product together with a co-founder. He does the programming and design while I do marketing, product development and sales. My question is how do I sell the SaaS that hasn’t even been built yet? How can I build an email list when I don’t even have a product? Should I do marketing already? Now before the product is launched, we work on a talent management SaaS where businesses can put milestones that need to be satisfied in order to get to the next level. Example to go from programmer to senior programmer. This SaaS is pretty general to general. Any ideas for marketing this before it’s built? That would be very much appreciated. Thanks and best wishes. Austin, what do you think Derek? Rimer?  

Derrick Reimer:
Well, I consider taking the opposite and saying arguing that you should not market before you start coding, but I didn’t. The conflict, I didn’t think I could steal that. That’d be  

Rob Walling:
Great. Radio. Yeah, the April Fools, I’ll bring it back for April  

Derrick Reimer:
One. Yeah, so yes, you should market, you launch your product. I guess to be more specific though, I was thinking about what does this look like at the earliest stages and trying to think about what do I see working right now in the year 2025? I mean, historically it was like build a landing page, drive traffic to the landing page, and I think a lot of that stuff fundamentally still kind of works. I mean, I think there’s more noise than ever out there with so many different startups trying to get attention all the time. So I think just strategically, I would be thinking focusing initially on your network. I mean, presumably you have people that kind of fit this target market in your circles where you can, they have some kind of warm connection to you, even if it’s just like a LinkedIn connection or something. 

So people you can have conversations with to get their buy-in directly and then try to amplify this messaging in places where other people who aren’t in your direct network will be able to see it. Your casting vision about the change you want to see in the world, maybe you have a manifesto or something, and it’s like this is enough to gain someone’s a couple seconds of engagement as they’re scrolling by in a feed to catch their attention. And so you’re just trying to build some anticipation around the product you’re building. And then while you’re doing that, you’re testing positioning, you’re writing a landing page with the headline and maybe you’re driving some traffic to it. I think a lot of those tried and true techniques for testing out positioning still work.  

Rob Walling:
Yeah, I think so. And you don’t have to sell it before built, but I do think you want to market it.  

Derrick Reimer:
Yeah,  

Rob Walling:
Right. I mean, selling is be like, all right, so give me money. Well, I don’t mean some people talk about pre-sales. I’ve never ever pre-sold anything. I have pre-market everything. And yeah, it is more competitive every year. It always is. And frankly, the tactics that I outlined in start small, stay small are 15 years old now. And so a lot of people know them. I mean, they came from other places too. I think a four hour workweek outlined that the smoke test and all that. I still put up a landing page for anything that I launch, including a new book with SaaS institute.com. As of today, as you and I are recording, this is a headline, an H two a sentence and an email capture form. And I get it that at this point I have an audience. I can just say, talk on this podcast and talk on Twitter and such. 

If I did not, I would still do exactly that, and I would still be talking on Twitter. I would be in founder Slack groups and on, I was going to say Facebook, but founders, it’s like where do founders hang out? That’s the real question that you hang out there. You have conversations, you do what you said, which is you get a landing pitch up, and then if you’re selling something that’s quite expensive, well, you actually want to get conversations. You want to get into conversations with potential prospects. You’re not trying to sell it. You are trying to find out are we solving a problem that they have? That’s usually the big early thing. If you know that they already have this problem and they are already paying for other software to do it, then the next thing you’re trying to figure out is, well, how are we going to be different? 

I don’t want to be a commodity. So that’s what you’re trying to assess out. We did this with Drip as we were launching. It’s like, well, we know people need to send email. There’s 300 other competitors that do it, so how are we going to be different than MailChimp infusions stuff to all these, right? And you did it with Avial where it’s like, well, we know that there are other scheduling links that exists. So I know that it’s a pain, but if I launch an exact clone of a competitor, I’m not. I mean, my little, I’ll get to three KMRR we, but you’re not going to build a great business if you build a commodity. So it’s as much, it’s customer development, it’s customer conversations, and it is, I think there’s a lot of learning that can happen here, not just marketing and selling  

Derrick Reimer:
When it’s in the vaporware stage, the goal is different. You’re still trying to inform the building process very much with reading what the market needs. And maybe hopefully you’ve gotten to the point where you feel confident enough to start investing in product that there is something here, but that’s not a place to stop. You need to continue the refinement of what exactly we’re building and who’s it for and how are we going to get these people. So as you’re proving out the product hypothesis with building, you’re also proving out the marketing hypothesis and the sales hypothesis with trying to read the sentiment as you’re putting this messaging forward.  

Rob Walling:
Last thing I want to throw in is if you put up a landing page, but I don’t have a product, what do you put on it? You put a headline that addresses the problem or the pain point that you’re fixing, and you put a sentence of text. My first book Start Small Stay Small, was a headline that said A developer’s Guide to launching a startup. And then I think it had one or two sentences of copy that was it, email capture, and it said something like, finally a book written for someone who wants to launch a product or someone who wants to start a company without 5 million of venture capital in your bank account. It was something that was it, and it was an email capture. Now it’s a book, it’s not a SaaS, but if I was doing a SaaS, that’s what it would be. The same thing of I’m solving a problem, this is it. Opt in if you want to fix that problem. And again, if there’s already existing solutions, then you can’t just say, I’m going to help you send email to your marketing list because a solved problem. It’s like, how am I going to be different? Why are the other solutions failing? So thank you for that question. Hope it was helpful. Our next question is an audio question from Noah Tucker.  

Noah:
Hey, what’s up Rob? This is Noah. I’ve been listening to your podcast weekly for years now. I’m the founder of a company called Social Snowball, which is an affiliate marketing platform for Shopify brands. And we are mid seven figures of a RR. And my question for you today is about free trials. We have always been very generous with free trials. We offer a standard 30 day free trial, and we’ll sometimes extend that if a brand asks or if we’re working with a partner and they want an exclusive deal, we’ll do a 45 day free trial occasionally, for example, and obviously this is great for the sales team, it helps get deals over the finish line that maybe are dragging their feet a little bit because it’s just an incentivizing offer, but it comes with downsides. And what we’ve realized is that a lot of brands during their trial period aren’t really taking onboarding that seriously and are kind of slacking off and losing excitement to launch. 

And they don’t have as much urgency to launch their affiliate program with us because my theory is that since they’re not paying, they just don’t really have that sense of urgency and they’re just kind of like, oh, we’ll get to it later, and then their 30 day trial completes and they’ll ask for us to extend it. And then sometimes it just continues to drag out until the brand just forgets about it or loses interest. And this has been a little bit of a challenge for us to work through. So I’m curious to what your thoughts are on considering just chopping the free trial altogether for a few months and seeing what happens and just kind of adjusting accordingly. Another idea I had is basically offering a refund for the first month. If the merchant, our customer completes all of onboarding. So if they finish the steps and then they won’t ask for a refund for the first month, we’ll give it to them. So there’s an incentive for them to actually set everything up or they won’t be eligible to get a refund on that month. But that’s just one idea I have. I’m super open-minded to anything you could suggest. And yeah, thank you so much for taking the time. I appreciate you.  

Rob Walling:
So I’ll start by saying I actually really like that idea of that Noah threw out of if they finish their onboarding, then their first month gets refunded. I think that’s pretty clever just to start. I hadn’t thought of it, and when he said it, I was like, that’s not the worst idea. But beyond what are your thoughts?  

Derrick Reimer:
Yeah, so I think, I don’t know, free trials are tricky because it comes down to what is the goal of the free trial? So is it to give the customer time to set up, do they have resistance to pay for this until they make it through some kind of long setup process, or are you letting them kick the tires and learn about the product to themselves before they make a decision about going forward with your product? So they, in that preliminary buying phase, we’re still sussing out the options, or are you trying to actually give them a certain amount of tangible value before they pay? So you’re trying to say your customers refer a certain number of people before you’re obligated to pay us just to give away some value for free. Based on what you’re describing, it sounds like you have people coming in who are, you said not taking onboarding seriously or they’re losing excitement. 

So it sounds like they might be more of the aspirational type of customer where maybe they’re looking around at options, but they’re not ready yet to move forward with this. So I would be thinking like, well, is there value in letting them explore around or is that better that you control that process and just like, well, let’s watch a demo or have a live demo with us to explore this first before we get you into the product. I don’t know if it’s worthwhile to try to force them to have a stronger sense of urgency about the project. I mean, maybe it’s just not the top priority right now, but they’re doing a little preliminary research, so I dunno about arm twisting tactics to try to get them to do this right now. Although maybe they’re encountering something in the product where, oh, this is looking like it’s going to take longer to set up. So yep, this is maybe a for later type of thing. So that also could be something to look at. Are they getting tripped up at a certain point where like, oh man, I have these 10 different settings forms to fill out and there’s way too many decisions. Can you shortcut that? Can you make it easier to that minimum viable activation path? So there could be something in the product to look at too. It’s hard to know exactly what’s going on with these trials, but these are some things I would think about.  

Rob Walling:
Yeah, I like that. I think you’re right on the money. I would give you a bullseye emoji. If we were on Blue sky, did you just invent an acronym? An MA minimum viable activation Path? Derek Remer, just coming up with the great thing. We might want to workshop that a little bit with chat GBT to get a better acronym.  

Derrick Reimer:
Yeah, probably. Yeah.  

Rob Walling:
So yeah, you’re right. I mean social snowball is the H one is scale your affiliate revenue with creators and ambassadors. And so if you are trying to get an affiliate program set up, you can imagine you got to install some tracking snippet on a website. There’s stuff, and if you’re at a big bigger company, it’s like, well, I got to get engineering involved, I got to get it involved. When they say it, you’re like, this is only going to take six months. But having known the founder of ambassador get ambassador.com, Jeff, and seen him just deal with exactly this where it’s like, well, they’re not installing it. He was working with a big Fortune 500 company. He’s like, it takes them 90 days to install this line of JavaScript on a website of all the security and all the other stuff. So I’m not opposed to Noah’s idea of refund that first month. 

Some motivation if they get it installed or I’m sorry if they get onboarded. The real thing I would ask though is, is that motivating for them? If you’re dealing with a Fortune 500 company, let Target, they’re here in town and I was going to do affiliate tracking for Target. Do they care? Does the person buying care if they get the first month free? No, they don’t. But I don’t know what social snowballs customers are motivated by. So that’s the first question I’d ask. The other thing is, it is so common, especially if you’re selling to enterprise, and I’m not trying to make that assumption here, but let’s just dip into that real quick. Paid pilots, there’s a reason there are paid pilots and it’s like, you know what? Let’s do a 60 day paid pilot or a 90 day paid trial you could call it. 

And they do pay and then they have some type of motivation. It’s that time pressure. And this is always the thing where people say, well, I’m going to remove the trial or I’m going to remove, it’s not going to be a 14 day free trial. It’s going to be you log in and you can send X emails or you can book X amount of meetings. Well then there’s no time pressure and time pressure can be a good thing to get people motivated. And that’s kind of what Noah, I think what Noah is struggling with here.  

Derrick Reimer:
If it is a larger company and you’re like, okay, we need to get approval to pay for starting to do this thing, the question becomes, well, how far can we get without paying, without getting finance involved? So it could be a function of once you get the finance ball rolling, if you make that happen sooner, then that unblocks the project almost. So there could be some, when you’re selling to larger companies, these interesting dynamics start to emerge where I’ve heard Jordan Gaal talk about this too, how some have seen more success like asking for a large sum upfront from a larger organization because that means it’s taken more seriously or it’s viewed as a more legitimate. So  

Rob Walling:
Yeah, what’s funny is Jeff who started ambassador, which was affiliate management, I’m not going to say it’s similar to it, but it it’s the same category of this. After he sold Ambassador started his next company, and you know what it is, it’s onboard.io and the H one is onboard better and reduce customer churn. It was such a problem getting people onboarded. That was his number one thing. He could close these, he would close these big enterprise deals. And exactly the problem Noah’s running into is he was like, they’re just not getting onboarded and it’s a team. It’s like I got to get eight people at Target Best Buy, Verizon, whatever on the same page, and they’re all from different departments. And it’s like, how do you do that? His next SaaS was a tool just to do that because it was such a pain point for them. And it just shows you that this is probably not an easily solved problem, but it really does come down to what are the incentives and if you need to keep a time constraint and make ’em pay, I love coming back to the very first thing you said, which is what’s the purpose of a free trial? Because when you’re starting out in a new category or not a new category, but when you’re entering an existing category that’s competitive. People might want to poke around and see your product, and that’s what the trial’s for. 

But if you’re MailChimp, do you need a free trial? Everyone know how you send email, you don’t need a free trial. You just get in and you do your stuff. There’s just certain times where I just don’t think a trial is warranted at all, and I like that. Cool. So thanks for that question, Noah. I hope it was helpful. Our last question for today is from Xavier from France.  

Xavier:
Hi Rob. This is Xavier from France. I am working on this niche that I will qualify as a B2B C ish kind of niche, and I would love to have your feedback, your feelings about it and to know if it rings any bells to you. First of all, this niche has some good qualities that you mentioned. It’s small enough for big player to not care about it. It’s targeting to help people in their main job in the job with which they make a living. But my concern is it’s this kind of job fueled by patient in which the salary are very low. And for sure, my product won’t help them to make more money. It’ll just help them to execute better the job to make them win a bit of time, but at the end of the month, they won’t win more money because of my products in any kind of way. 

Because of this, I think the price that I can target for my project can be more than between the five or 15 USD per month as another B2C solution. And this is where my concern is because as you said over time is not that good price range for any people who wants to bootstrap a company. So yes. So this is a bit my wonder about this and I would love to have your feedback about it. Just keep up the good job. Your show is amazing and your content helps me a lot. So see you soon and thanks a lot.  

Rob Walling:
So to recap, he said this is for people to help them at their day job, but that the day job has a low salary and it won’t help them make more money. It will just help them execute a better job of what they’re doing to win a bit of time back to be more efficient. And then he says, I think I can charge between five and $15 per month. So he’s asking for feedback. What do you think?  

Derrick Reimer:
Sounds like a really hard road. 

I’m gathering that this is sort of, he’s describing this as B2C, but in a business context. So they’re using it for work. It’s not just for personal life stuff, it’s for work life stuff, but it’s sold. He’s imagining selling directly to the worker so that they can improve their productivity. I’m assuming it’s probably some kind of productivity thing, which I would say this sounds like almost zero willingness to pay. This sounds like a free, something you would install for free on your phone, free mobile app or something. I don’t know. I mean, one thought that just occurred to me is if this does benefit the business, is there a way to sell this to the companies that are employing these people? Because now you’re improving the productivity of their workforce and it’s not an expense that’s on their dime. But again, not knowing what it is, I’m not sure if that’s at all feasible for this, but I would be thinking how to make this more B2B, because trying to sell directly to the consumer sounds like a really, really tough road.  

Rob Walling:
Yeah, me as well. I mean, this breaks pretty much every rule of anything I would launch ever again in my life. It’s just a low price point B2B two B2C ish. So I agree. Can you sell to the business? The other question that I had about this is, do these workers even care if they’re more efficient? Because a lot of people just don’t in their day job. 

Some people care and want to get better, especially if you are a sole proprietor, you run the business. But then that’s back to being a business owner. And that’s not what he’s saying here. If I’m an auto mechanic or I am a dental assistant or a nurse’s assistant or a construction worker, and do I care if I’m, I, of course always cared if we’re more efficient, but we are entrepreneurs. That’s why we we’re kind of built a little bit different. But most of those people in those roles really think, man, I wish I could get more done in this day. I don’t know. I genuinely don’t know. And so are you solving a problem no one has or no one cares about?  

Derrick Reimer:
Yeah, I mean if he says it doesn’t lead to them making more money at all, and I’m like, well, that’s the problem. That sounds suspicious. I mean, even if there was some kind of vague tie of if they can prove to their employer that they are this much more efficient, then they have become more valuable and therefore should be ultimately compensated more in some fashion. But he made it very clear, this probably won’t have any link to their compensation, which is a good tell that the business won’t really value this. They won’t necessarily value  

Rob Walling:
This. Yeah, it’s hard to weigh in further without some specifics because it’s not detailed enough, I think, to really offer strong opinion. But that was it from Xavier. I hope that was helpful for you. Derek Rimer, people want to keep up with you. You are at Derek Rimer on X Twitter. And are you derek rimer.com on Blue Sky?  

Derrick Reimer:
Yes. Yep.  

Rob Walling:
Alright.  

Derrick Reimer:
Set up a profile there as well.  

Rob Walling:
Amazing. And of course, if people want to use the best scheduling link on the internet, they can head to savvy cal.com. Indeed. Thanks for joining me, man. Thanks for having me. Thanks again to Derek for joining me on the show. Once again, I’ve enjoyed having him on every month or two to answer your questions. If you have a question for the show, you can email it to Questions at startups For the Rest Of Us dot com or click ask a question in the top nav of our website, startups For the Rest Of Us dot com. You can send audio, video, later stage questions and audio video. Go to the top of the stack text questions I answer eventually, and all questions are welcome. This is Rob Walling signing off from episode 758.

Rob Walling:
Welcome to season four, episode five of TinySeed Tales where we continue hearing Colleen SCH nestler’s startup journey. Before we get into the episode, applications for my SaaS accelerator. TinySeed are open from now until February 23rd. If you are bootstrapped or mostly bootstrapped SaaS founder and you’re interested in the perfect amount of funding, mentorship, advice, and community, head to TinySeed dot com slash apply  

Colleen Schnettler:
And I know what I want even though I have failed at it over and over and over.  

Rob Walling:
Welcome back to TinySeed Tales, a series where I follow a founder through the wild rollercoaster of building their startup. I’m your host, Rob Walling, a serial entrepreneur and co-founder of TinySeed, the first startup accelerator designed for Bootstrappers. We’re back with Colleen Schettler for episode five. Colleen is a developer, entrepreneur and co-founder of Hello Query. Last time we spoke, Colleen and her business partner Erin, were at a turning point in their business relationship and since then, Colleen and Erin made a tough decision about the future of the business. I’ll hand it over to Colleen to explain.  

Colleen Schnettler:
So what we had done in the past two weeks is we had actually hired a contract Laravel developer to help Aaron to speed up the development process. We had agreed that we would have an MVP of Hello Query to put in my side project, simplify upload on Monday. I had expected it to be done and he told me it wasn’t, which is okay. Estimating software timeline requirements is very, very hard. But then he told me that when he sat down to code on Hello Query, he just could not summon the energy for it. He said he was burned out and he would just sit down at his desk and he would just feel an overwhelming sense of dread and burnout’s tough. So many people in our community have experienced it, and so I said maybe if you came to some customer calls, because I get a lot of the positive dopamine endorphins, the one doing all the customer calls, and so I asked him if he wanted to join me on these customer calls and he said no because he was concerned that would just increase the pressure. 

Now, it’s not only do I have Colleen to answer to, but I have all these customers, so I took a beat too because my question is do I beg him to stay or do I let him go? Right? And so I had to decide because here he is on the phone telling me he’s totally burned out. He has no excitement for the product and he just can’t bring himself to work on it. So what we landed on that day was we landed on why don’t we both take a break, think about what we want and come back and talk again in a couple days.  

Rob Walling:
During that time, in the back of your mind, did it feel to you like it was going to end or did you still have that maybe Aaron will reconsider and decide, oh, I really do want to be part of this.  

Colleen Schnettler:
I knew he was going to leave. Have you ever heard that vending machine breakup analogy like breakups are shaking a vending machine, knocking over a vending machine. You have to shake it a few times before it falls over, and I was like, oh man, we’ve already had this conversation once. There’s a disconnect in terms of the speed at which we want to work and what we are trying to do. So maybe if I was just more chill, maybe if I wasn’t trying so hard and I was just like, it’s fine. Let’s just hang out and we’ll just do this at whatever speed we do it. Maybe we could have made it work, but  

Rob Walling:
Sounds like a recipe for a really successful startup. I’ll just chill out and I’m sure things will take care of themselves.  

Colleen Schnettler:
So I think that I knew we were going to part ways, but also, I mean it was ultimately his decision, but I didn’t beg him to stay.  

Rob Walling:
So now Colleen is left without a co-founder, a difficult spot to be in during this time. She recorded a voice memo titled it Crushing Failure and sent it to me.  

Colleen’s Voice Memo:
I don’t really know what to say. I’m in a position where it feels like I have no options for this business, and it feels awful, especially after taking funding and having people bet on me and for me to be in this position where I can’t execute and it doesn’t even feel like I did anything wrong. It just feels like my partner and I fundamentally wanted different things and we thought we wanted the same thing. We’ve been in TinySeed for almost a year now, I guess 10 months, and we’ve come so far in this space. So to walk away from it right now, gosh, the failure level feels massive. I don’t know what to do. I don’t know if I should do this alone, but if I’m not going to have my business partner, it’s his tech stack. So it’s almost like, no, it’s definitely I need to have a product and a tech stack. I understand, and I’m a senior developer, so should I spend the next three to four months learning or should I rebuild the whole thing in Ruby on Rails? Should I shut this product down? Because reporting, I actually don’t care that much about reporting or should I recognize that I have put so much time and energy into this space and I have people that are interested. I don’t know what to do, but it feels like crushing failure  

Rob Walling:
In that amazing crushing failure. M four A. You mentioned the word failure. Why did you use that word?  

Colleen Schnettler:
Well, is that not exactly what this is? I mean, what have we been doing for a year, Rob? We’re getting to the end of our TinySeed year. Everyone’s like, what did you do all year? And I’m like, I don’t. No. What did we do all year? Sorry.  

Rob Walling:
No, no, this. That’s how it feels. Yeah,  

Colleen Schnettler:
I have been working. It feels like we’ve, both Aaron and I, because he’s been putting in a ton of time working so hard and we have nothing. I even walked away from 20 KA month when we were consulting. I shut that down.  

Rob Walling:
I was going to ask about that. If you regretted that at this point,  

Colleen Schnettler:
I mean, if I hadn’t shut that down, that wasn’t just 20 KA month, that was infinite KA month, I could just keep scaling that up indefinitely. I could have a whole freaking consultancy right now. When we raised the TinySeed money, I made the decision to walk away from the product ties consulting and that, like I said, that was a significant amount of money. I cut my legs out from under me, but you know what? I do not regret it. I do not regret it. I would rather fail this way than still be doing that stuck in limbo forever.  

Rob Walling:
That’s really good to know about your own decision.  

Colleen Schnettler:
Yeah,  

Rob Walling:
It would be terrible to feel like huge waves of regret of like, oh, can I go get that back?  

Colleen Schnettler:
Yeah.  

Rob Walling:
It doesn’t sound like you want it.  

Colleen Schnettler:
I think that this is the most important thing and we get wiser as we get older and all that stuff, but to get what you want, you have to know what you want and I know what I want even though I have failed at it over and over and over.  

Rob Walling:
Now, hypothetically, let’s say you had not raised money. Given where you are now, what do you think you would do? Would you keep going with this or would you shut it down and look to get a job or do something else?  

Colleen Schnettler:
The problem with this idea, hello Query is this is really Aaron’s idea. It’s his baby. He’s the one who experienced the problem and he’s the one who has a vision on how to solve it. And so to take his vision and run with it, I don’t know if that is something I want to do. I don’t know if it is the right product for me. So if we didn’t raise money and he decided not to be involved, I can almost say I would not do this without him. For sure.  

Rob Walling:
I feel like, tell me if I’m wrong on this. I feel like you have a particular gifting and or desire to solve problems for developers and or product people. Would you say that’s accurate?  

Colleen Schnettler:
I think that is an audience I know, so that is probably why I have gravitated to that particular audience.  

Rob Walling:
But it’s not necessarily something that you would pigeonhole yourself into?  

Colleen Schnettler:
I wouldn’t because we spent a first year before we hooked up with TinySeed, we spent a year trying to sell this as a Ruby gem to developers, but they’re a hard market to sell to  

Rob Walling:
Because you mentioned several things. You mentioned it was Aaron’s idea you were going to work on it with him and also you’ve done it. So have you been there, done that kind of bored, not interested in it? What are the factors?  

Colleen Schnettler:
The problem is deep and complex, and there’s a lot of data, not only data privacy, but data authentication issues in this space. And one of the things I realized rewatching the customer interviews is people don’t want reporting off of a single table. They want their users to be able to go in, see what data they can access and work through these tables to get that other data. And that’s a hard problem to solve. I have no idea how to solve it. And then you’re in this kind of scary, not even regulatory but scary space where if you screw it up, you can really screw it up. And so I think my concern isn’t that I can’t do it, it’s that the product Erin and I had envisioned, it’s not the right solution. I can already tell you from the customer interviews what we have 50% done, that is not the right solution right now. 

It’s this iframe that loads in your site that your customers can build queries in. But I know the first thing people are going to say is, this is customer facing. I don’t like the way it looks. What? It loads an iframe. So now, I mean, it’s not actually that easy. There’s technical problems that I think, I mean, I’m sure I can solve them, right? All technical problems are solvable. I just think the layers of this problem and our solution do not match. And so unless you really, really care about it, I think it’s a hard sell to figure out what the right product is in this space. I don’t think we have it.  

Rob Walling:
That’s interesting. So not only have you lost your co-founder, but what you’ve built to date you don’t have confidence in and you feel like you need to start over without a  

Colleen Schnettler:
Co-founder. That’s why.  

Rob Walling:
Yeah,  

Colleen Schnettler:
And I feel like if we had still been together, we would’ve figured it out. It’s a hard problem to solve. I don’t know how to solve. It feels like the reasons not to do it are stacking up  

Rob Walling:
A lot of headwinds. Yeah. The way I see it, she has three options. Colleen could go it alone or find a new business partner, rethink the approach and bring Hello Query to life, or she could pivot within TinySeed. We’ve certainly seen our share of entrepreneurs who pivot their business. It’s not the most common thing, but it’s also not unheard of. So I pose these options to Colleen. Where are you with that decision? What are you thinking?  

Colleen Schnettler:
I don’t know. Robert is so hard to decide because I watched the customer interviews and I’m like, clearly there is a problem here. So there’s something we’ve hit a nerve somehow. Can I solve that without Aaron? But then another part of me is like, man, it’d be nice to walk away from filters and sequel. I have been doing that for years and years and years, and I cannot make it work.  

Rob Walling:
I’m kind of sick of it.  

Colleen Schnettler:
I’m kind of sick of it. Maybe I should do something else. Why not? These past eight months, I mean, my skillset has just exploded, so I just need an idea and a little bit of luck and maybe I can do something else. It’s an interesting position to be in because when you see other people in this position, you want to play your tiny violin for them. You’re like, oh, you have funding and no idea how hard for you, and now I’m in this position and I’m super stressed.  

Rob Walling:
As you think back over the past six months, 12 months, is there something that you wish you’d done differently?  

Colleen Schnettler:
Yeah, I think originally when we had talked about this idea once we got rid of our consulting arm, we had talked about starting, which is SQL to CSV and Iteratively building. And for reasons that I’m still kind of unclear, I couldn’t get Aaron to do that, and I think part of it was he felt, I don’t want to put words in his mouth, but he felt like that wasn’t well aligned with his vision, and so I feel like we should have shipped something faster. It should have been SQL to CSV instead of going with this huge vision where we’re going to solve all your problems. Well, gosh, it’s so cliche to say this out loud now, but we should have shipped SQL to CSV and because Aaron and I, we maybe didn’t, I don’t want to say we’re conflict, but when you have a personal relationship with your co-founder, you don’t. 

I was always really worried about pushing him too hard and we broke up anyway, so I should have pushed him harder eight months ago. We should have broke up eight months ago. I learned a lot about communicating from him, which was great. Lessons I will take, if I ever take a co-founder again, lessons I will take forward with me. Business relationships are hard, and it’s not awesome the way this turned out, but also people have real lives and we like to pretend that’s not true, but we’re not 22 living in a van by the ocean, right? We’ve got kids and lives and sometimes people’s priorities change and I’d like to believe that he and I handled this maturely and we separated with class and we are still friends, so I do not regret it.  

Rob Walling:
There’s a reason entrepreneurship is often equated with a rollercoaster ride, and while it may seem like Colleen is at a standstill dips, this are all part of the journey. Next week we’ll follow up with Colleen and see where she’s taking Hello Query.

Rob Walling:
Welcome back to Startups For the Rest Of Us. I’m your host, Rob Walling, and today I have the pleasure of talking with a good friend of mine, Brendan Fortune, about how to be a great product manager. And you might be thinking to yourself, well, I’m a founder. I don’t want to be a cog in a wheel at some large organization, product manager. That sounds like a title of someone managing things that doesn’t matter, what being a product manager is about, making decisions of what to build, how to build it, how to market those, how to frame them, how to explain them to the rest of your team, and how to explain it to the world at large in a way that gets people interested. Product management is a skill that any SaaS founder needs to be aware of, and I think all of us can improve on that. 

Brendan Fortune was the first person aside from the two founders of Drip, to make any product decisions about what went into Drip, what was built and how it was built. Brendan has been a product manager at several companies. You’ll hear us kind of talk about it in his intro, but we have a great conversation not only defining product management, and you can hear me at the beginning, kind of prod him like what is product management and how should someone think about that if they’re a founder? But then we get into a framework that Brendan introduced me to that involves building a flywheel and helping that decide how to make your users more successful and how to make your product more successful. If you listen to this episode and you decide you have product questions, things about how do I decide what to build? How would I think about being a product manager, how can I hire a product manager, how can I become a product manager? 

Anything around product management, any of this stuff. If you want to send those in to Questions at startups For the Rest Of Us dot com or you want to click the ask a question and put product question in the subject line, I will invite Brendan back on if we have enough questions to do a full show before we dive into our conversation applications for my SaaS accelerator, TinySeed are currently open. We will be having a live q and a if you’re interested in applying or just have questions for us on February 13th at 10:00 AM Eastern time. For more information, head to TinySeed dot com slash apply. And if you’re ready to apply, same url, tiny c.com/apply. If in doubt, fill it out. If you have at least $500 of MRR, you’re a B2B SaaS company and you’re interested in exactly the right amount of funding, mentorship advice and community tiny c.com/apply. Brendan Fortune, welcome to Startup For the Rest Of Us. Hey,  

Brendan Fortune:
How’s it going?  

Rob Walling:
Great, man. It’s good to have you on the show.  

Brendan Fortune:
Yeah, I’m excited to be here. I’ve listened for so long. We’ve worked together. We played DD for so long together and now finally on the show, the pressure’s have,  

Rob Walling:
He’s been waiting. Were you checking your mail every week? Where’s  

Brendan Fortune:
The invite  

Rob Walling:
To come on startup  

Brendan Fortune:
Service? I was about to rage Quit this friendship and move Right on.  

Rob Walling:
I know, I get that a lot. Yeah, I get from a lot of people. So as folks probably heard in your intro, you and I worked together at Drip after the acquisition, after we sold the lead pages and became the company. You were the first person aside from Derek or I to ever make product level decisions about Drip. That’s the honor. That’s tombstone level. Yeah, that’s what you’re printing.  

Brendan Fortune:
Yeah, I’ll drop that right on my tombstone. I mean, it is kind of cool when you phrase it that way. Yeah, I’ll take it.  

Rob Walling:
And your role today is your title?  

Brendan Fortune:
I’m a director of product over@customer.io.  

Rob Walling:
All right. And most people listen to this podcast will know customer.io. I wanted to start us off though with a brief kind of discussion definition of product, that role, that department, because back in the day when I was bootstrapping early, let’s say 2005 to 10, I’m a developer. I’m trying to build stuff people want and just trying to make enough money to pay my house payment product. That role, that department didn’t, I don’t know if it didn’t exist or I just didn’t know what the hell it was. It probably existed at Proctor and Gamble, right? For toothpaste, there’s some product owner or product leader or QuickBooks, maybe Intuit, they would have a QuickBooks product leader. I’m sure back in the day Microsoft, there were program manager program, maybe they were product. Yeah, there were product managers. Yeah, of course there were in the nineties for Excel and Word and all that.  

Brendan Fortune:
There were even as far back in HP I think in the nineties. But of course product doesn’t mean the same thing.  

Rob Walling:
And so my question then I remember starting to hear this term as I was building more SaaS companies and it just became much customer success kind of sprang out from nothing to being a role. Now in a department, I feel like Product did that with SaaS and I don’t know the history of it that well, but what I want to do is for the 25% of the audience, it’s like of course we know what product is, we know what project manager, product owner, all that, but there’s a good chunk of this audience. I think that’s kind of like whether they’re a solo developer, whether they’ve only worked at small companies, whether just the founders, they are by default the product managers and they don’t call themselves that. It’s like, oh yeah, the CEO and the CTO of our five person company. They make all the product decisions. What does that mean? What does product do and what are product decisions? Talk us through this as someone who’s been in it for what, 15, 20 years?  

Brendan Fortune:
Yeah, I think the segue from a founder is probably the simplest way to understand it because what’s one of the things the founder does? Well, a founder has to understand their market, they’ve got to understand their product area, they’ve got to understand their customers. They’ve got to be thinking about pricing and packaging and how they’re going to make money at the end of the day. And that’s very much what product managers do once a company or product has scaled to the size where one person just can’t do it all. There’s just too much going on and not even that they can’t do it all, but they’re just not going to do it as well. There’s a limit to the capacity of details that we can ingest as companies grow and products grow. so@customer.io for example, we’ve got eight product managers now I think actually we’re about to be up to 10 writing two more later this month.  

Rob Walling:
And I often describe product as this is my very how I always, it’s like I have a lot of gut feel and I have a lot of very shorthand things that are not necessarily official, but I’ll say product decides what gets built next, what features often in what order, often how they’re built, meaning what do they look like, how do they operate, how do they interact with other areas of the business, how are they going to impact pricing, which tiers do they go in? And then there’s even beyond that, there’s product marketing, which I had never heard that term before. You came on with Drip and then you and Tedesco and the execs were telling me these things and it’s like, oh, is this how they do it at big companies? It’s like, yeah, that is. And so that was the merging of me being in the small companies, the small SaaS and hitting that. So that’s my loosey goosey run on sentence definition of it. How do you think about it?  

Brendan Fortune:
I think that’s right. And the reason I pause is because there’s a lot of debate in nerdy product circles about whether it is the product manager who makes certain decisions versus kind of guides certain decisions. And that weasels is part of why don’t want to, I’m not sure the details are actually useful, but at the end of the day, the product manager is accountable for the features that ship and whether they are actually adding value both to customers and to the company. And so that does involve what are we going to do first? What are we not going to do? Which are, it’s like 95% maybe more of the decisions that have to get made. So I think I’d agree with that. Product marketing, I don’t know if you want to go deep on that, that’s just really splitting hairs, but product marketing is kind of a fascinating dual head of product management and the most concise way I’ve heard it described is product management is listening to the market and reacting and building and product marketers are speaking to the market. So both of them need to understand what customers very, very at a detailed level, they need to understand, have an opinion on strategy and personas, but one builds stuff and the other one tells stories.  

Rob Walling:
And this is the thing, this is why it’s hard is because again, there’s a chunk of people listening to this podcast that either do work at big SaaS companies or have seven or eight figure SaaS companies. So I don’t want to act like everybody here is doing 10 KMR mri. That’s not true. But a lot of folks, if you are a founder or two co-founders of an early stage company, I think of Derek and I with Drip when we were doing 20 KA month product management and all the decision making he and I made together, that was actually a huge chunk of our job. What do we build next? How do we build it? Let’s collaborate. We got an architect, we’ve got to get the naming right, blah, blah, blah. And then as we were getting close to say, launching that feature, the automations or workflows or whatever, we’d get together and I was like, alright, we’re going and this is when product marketing happened. 

But I didn’t know that what it was called, but it was like we got to communicate this to everybody, to all the prospects in our pipeline. I want to communicate it to the world. I’m going to tweet the shit out of this. We’re going to email everybody. I want to try to get on podcasts and talk about workflows. Now we didn’t have a later on, you have a sales team, a customer success team, a customer support team, and you have to keep all of them appraised. There’s some internal product marketing happening right now to me was we had one email support guy. I was like, Andy, here’s a feature. Try it out. Here’s a loom. Tell me if you have questions. That was literally our internal communication and the sales, the customer success. We would circle up in a room, we’d walk it through, Derek would walk us through for 10 minutes. Any questions? No. Start integrating that in your thing, right? It’s easy when there’s seven of you, but you imagine again as a listener, if you’re a hundred person or a 500 person or a thousand person org, someone has to be like, Hey, this is what’s happening and how do we communicate this to everybody? And that’s again how I think of product marketing. Is that right? That’s just my image of what it is.  

Brendan Fortune:
Yeah, I think product marketing, like product management, it depends a little bit company by company, but when I was at GoDaddy before, which is a much larger company, product marketing was responsible both for the internal training and communications and the external. And again, the more people you’ve got, the more time and energy needs to go into helping others help you. They’re going to support the feature that you’ve shipped. So if they don’t know what it does or how it works or some of the details, they’re not going to do a good job. And that’s going to translate to the customer experience. Of course, if you are building features that are intuitive for enough customers, then there won’t tend to be as many support requests. But yeah, I mean the way you’ve described it I think is exactly right.  

Rob Walling:
Now we’re going to play a little game. You and I are each going to answer a question, but you’re going to answer first so that I can answer with mine second and I can say, that’s why you’re wrong. No, I’m not going to do that. Just so people know, you and I have known each other now for 10, eight years and we play d and d every two weeks. So there is a lot of rapport, so I’m going to be jokey and stuff. Don’t let it make you uncomfortable if you’re listening to this and being like, why is Rob being such a jerk to this guy? Question is though, before we get in, because I want to get it, we’re going to get into pricing and flywheel and how I often say on this podcast, pricing is the number one lever in SaaS. And if you it up, you can have an amazing business that should be a million dollar business. That is actually a $200,000 business. I’ve seen companies do that. And you can do the math, it could be a 10 million versus a 2 million. It’s pretty easy. So we are going to dig in to how product and product management and all the decisions around that integrate with pricing and flywheel. But before we do that, I want to ask you, when do you feel like a SaaS company should have its first product manager that isn’t the founder?  

Brendan Fortune:
There’s a rule of thumb that I use to answer this question. I’ve gotten it from a few founders. Customer io works with many founders, drift did to, and it is, when can you afford to pay an employee 120, 130,000 a year? Now I’m assuming USD, and it kind of depends on where in the world you’re hiring, but when can you afford? And that’s not the only question, but it’s a pretty good indicator. If you’re not at that point, then you don’t need someone else trying to get close to details. You need to be closer to the details yourself. Because as we’ve been talking about, a lot of what founders do is what product folks do. Product managers are going to come in and do for you. So that’s the usual rule of thumb. And then you can kind of take that deeper depending on, well, okay, but what if I got these projections or what if I have this specific problem that I want to offload to someone else like project management or something. Is that okay? So you can go more detailed, but product managers, the way that I have experienced it across my career, you don’t need them until you’re doing, you’re doing pretty well.  

Rob Walling:
My rule of thumb across kind of TinySeed companies, they will ask me or even just I’ll get a question on this show, and it’s a rule of thumb can be broken, is that you don’t need a product person before a million a RR. And usually I see it between one and 2 million somewhere in there. And it depends a lot on the product. Look, there are some very simple products out there that are kind of a feature or a collection of a handful of features. And do you need a product manager? No. And then there’s customer.io and Drip and HubSpot and Salesforce and these very complicated. It’s like, yeah, you probably need one earlier, earlier than not. Similarly, my rule of thumb for when do you need kind of a head of marketing or someone to run marketing that’s not the founder, usually it’s between one and 2 million. 

That’s also my thing. And part of that is what you’re saying, which is well then you should have the budget to do that to hire someone good. They are going to be 120, 150 K or more. And usually you just are at a point where you can bring someone in from the outside because the product’s mature enough. It’s not that mature, but it’s way more mature than when you were at 240 KA year doing 20 KA month products. Still we need some founder level decisions at that point. It’s really, really hard. There’s still so much fuzziness around the decisions. And to piggyback on that, one of the things that I see non-technical founders struggle with is you get someone who’s a subject matter expert in the construction industry or in brick and mortar or in just whatever, we could name any industry legal. They don’t have a developer founder. 

So then they go hire either an agency or a developer and they hire the developer and they say, I have an idea for a thing that’s going to help legal people do this. And it’s like, great, what should I build? And it’s like, well build the thing that helps legal assistants do that. And it’s like, okay, let’s take a step back. Where will every checkbox, where will every setting, what will the top nav look like? I mean I’m preaching to the choir here to you and to everyone. Listen to the podcast of like you can’t just hire a developer and expect them to build an incredible product. Not unless they’re Derek Rimer. I know three in my life, you know what I mean? Who are developers plus really good product people? I’m exaggerating, they’re more than that. But you get the idea is that’s where as developer I think we often get that intuitively of like, oh, we’ve learned to build software, therefore it’s just a thing. You make decisions. And that’s why I never called it product in my head. It was just what to build. But when you don’t have that, you’re missing an entire skillset, right?  

Brendan Fortune:
And that’s how my career in product started. I was not an engineer, I was technical, I was more of like a cis admin. But it started because there was a really large gnarly project that required a lot of alignment building and coordin. It was a people problem first, I guess is my point. And when you get into product, there are lots of different paths, but if you’re coming in non-technical, it’s substantially different.  

Rob Walling:
So let’s dig into pricing and flywheel. When I asked you what you wanted to talk about on the show, a bunch of stuff we could go down. You mentioned how much pricing ties into product and I was kind of like, yeah, I guess it does. It is not something I would think of every day. But the moment you said, I was like, well of course it does. And I want to hear your thoughts on this whole concept because everybody struggles with pricing and everybody wants their pricing to be optimal, net negative churn, all the things I talk about, the cheat codes I talk about on the show. So why don’t you kick us off?  

Brendan Fortune:
Yeah, I’m really passionate about this topic or this framework that I’m going to run through because it’s something that helps not only with pricing but also with decisions about how you prioritize and even how you organize as the company grows. It’s this really amazing tool that you can do early on and it grows with you kind of just keeps on giving the foundation of it is this concept of a flywheel and that concept, I was using that word for maybe two or three years before I actually stopped and looked up exactly what it meant. So if there’s anyone else in the audience like that, you imagine a crank on a wall that you’re cranking with your hand and you crank it faster and faster and faster and at some point you let it go and it’s a self-sustaining crank at that point. You don’t have to put any more pressure on it, it’s just going to keep on rotating. 

So that concept is what the flywheel tries to embody. And the reason it ties into pricing is because if you can find a pattern of customer behavior that works like that flywheel where customers will do it over and over and over again and you can find a way to price based on that behavior, that’s how you can get some of the expansion revenue and the cheat code you were talking about with a net negative churn. That’s how you achieve that. And not all companies can pull it off, but particularly in SaaS, there’s a very good chance that you can, I think a lot can, and we, anytime you see usage-based pricing, that’s someone who’s trying to take advantage either of a flywheel or maybe it’s just a cost plus model where you’re like, well, I pay for these text messages to go out to Twilio, so I’m going to charge you for that. Now, I dunno, we could go into some examples flywheels sometimes that really helps. Why don’t we start with Drip because that’s a fun one we can both relate to and it’s very similar to customer io.  

Rob Walling:
Yeah, I know you have a diagram for this one, and what we’ll do is we’ll probably have it in the X Twitter snippet that we put out, but we will definitely take a still screenshot of it and put it in the show notes. If folks want to add to start up For the Rest Of Us dot com and look for, I believe this will be episode 752, possible it’ll be 51, but they can peep in if they want to see the diagram you have. But describe to us what you got. We’ll first share it and then describe to it.  

Brendan Fortune:
Alright, perfect. So I’ve got it shared here. Let’s zoom into our drip example. So it starts at the top with integrating customer data and anyone who’s used a marketing automation product, we’ll be familiar with this. So maybe you’re putting in an email address or the person’s name or their plan. If you’re a SaaS business, B2B SaaS, you put some sort of data in. And then with that data you craft messages that are personalized. So that could be personalized off a trigger really. A simple example is an onboarding campaign. So someone signs up that triggers a message to that person telling them, thanks for signing up and here’s some features you should try and et cetera. That’s at its most simplest. That’s stage two. Stage one, integrate customer data. Stage two send messages that’s personalized with this data. And then the last stage, stage three is you want to influence the recipient of that message. 

So you send the message out to them and there is a behavior that you’re hoping the recipient will take. So an onboarding campaign, maybe it’s that they log back in two days later, maybe a feature catches their eye and they’re like, oh, okay, that maybe that’s worth me reengaging with. Maybe it’s like a case study or a customer quote that they resonate with that’s going to push them back into your product and make it more likely that they’re going to convert. So that’s step three. And at that point you’ve completed the drip flywheel because you’re like, oh wow, I can put data in this system and set up this message automation once and it’s going to continuously impact the behavior of new customers as they sign up, which is great for my business. That’s amazing. So maybe I’ll put more data into Drip or I’ll use more of the data that I’ve already put in to send more and different kinds of messages that are going to influence more and different types of behavior. And for Drip and many marketing automation products, we price on profiles or people or contacts,  

Rob Walling:
Subscribers,  

Brendan Fortune:
Whatever subscribers. Yeah. See this is how I’ve been at customer for five years.  

Rob Walling:
We have five names for the same thing.  

Brendan Fortune:
Yeah, exactly. And again, the more you put in, the more you pay. So there’s some sort of starting fee, but the expansion revenue comes in with companies like Drip and certainly customer. What this results in is enough companies are expanding their profile count enough companies are running around this flywheel successfully to offset the companies are not and end up churning. And that’s why you can sometimes have early cohorts of customers, I know customer IO does that are still paying the same amount of MRR as they were like 10 years ago, even though maybe like 20% of the companies have stayed with the product. So that’s kind of the power of attaching your pricing to this flywheel. If you have that pattern of customer behavior that you can identify that makes your customers successful and that you can fairly charge on. And that last part about fairly charge on is where the rubber meets the road and that’s where this can fall apart for some businesses, but most that I’ve gone through, you’ve been able to get something pretty good.  

Rob Walling:
If you want to invest in founders, you can do so through my world-class accelerator and venture fund TinySeed. We are currently raising our third fund after having raised and mostly deployed almost $42 million across our prior funds. If you’re an accredited investor or the equivalent in your country and you are interested in indexing across dozens if not hundreds of B2B SaaS companies that are handpicked by myself, a r and our team at TinySeed to be the companies that we believe will succeed, you can head to TinySeed dot com slash invest. If you enter your info there, it goes straight to a R. You’ve heard him on startups For the Rest Of Us, and you can have a conversation with him if you have any questions or you can receive our deck and our memo and just the thesis of what we’re investing under because we are a unique venture fund and SaaS accelerator. 

So if you think you might be interested in putting some capital to work in ambitious, mostly bootstrapped B2B SaaS founders, head to TinySeed dot com slash in. So I want to pop in here. The reason that drip charged per person contact subscriber, well, I’m going to say subscriber, that’s that’s what we called it when I left and then they renamed it when they went to e-comm. It’s person now or something. But the reason we did is because I saw the ESP market and I was like MailChimp and HubSpot and whoever else, Infusionsoft and everybody charged per contact or subscriber, that’s probably the way to do it. And I was aware of net negative churn and all that or of expansion revenue and negative churn, but I wasn’t fully aware about how powerful that would actually be. That’s why we did it. There was no more thought to it and it worked. 

Hey, I got a little lucky, I was smart a little bit and got a little lucky is really what happened. Could an argument be made based on what you’re saying here, which is it’s about customer data, not about, I mean you have this flywheel of integrate customer data, send the message and then influence the behavior. So should I have charged based on customer data, not number of subscribers? How do you know? Is it so clear from discussion that it should have been per person rather than what if a person, a subscriber has 50 data points, 50 attributes or a hundred attributes or a thousand? Can we describe charge on that? How do you think? Is that where fairly comes in?  

Brendan Fortune:
That’s where comes in, but actually it adds another dimension and that question’s kind of awesome because at least in marketing automation folks have tried it different ways. So we actually have some results of the impact of that. So Segment is one example. They started, and they’re a CDP, but they’ve added marketing automation to their suite. segment.com is a customer data platform. I’m again not sure if the whole audience is familiar with that, but it’s about aggregating all of your data in one place that you might want to send out to one or more marketing tools like Google Analytics or Drip. And they charge by API call because that’s what they do. They’re like, okay, well how many API calls?  

Rob Walling:
That’s how they started.  

Brendan Fortune:
Yeah, exactly. And they were an engineer first company. And so they were like, yeah, a I calls they get that. And they went along for a while and I actually got to talk with one of the pricing folks who was involved in what I’m about to describe this pivot. And it was okay, but they weren’t growing that fast. So they started doing some pricing work and the insight they got out of it is a lot of the buyers of their product were marketers at this point who were like, oh yeah, my engineers are a pain to work with. They’d never want to work on my stuff. I want to get stuff into Drip or wherever else into Google Analytics, and they’re always kind of bothered by it. And so can you sell me this product that my engineers will like and they’ll integrate with once and then I can take it and connect it to the various different tools that I want. 

I don’t even have to bother engineering. And that message resonated. But then when they were asked, all right, great, yeah, totally. So how many API calls do you need? The blank stair comes and they have no idea it’s not, and then they lose the deal. So the insight was charged by person or they called it Monthly tracked user or MTU, because Google Analytics has that concept. Yeah, it’s not a good name, but it’s the one that Google Analytics has. And so they were like, well, that’s something that’s familiar to them. So that’s where some of the art over the science comes in where you want to figure out what is going to make sense to your buyer and then price based on  

Rob Walling:
That. Yeah. Okay. That’s super helpful.  

Brendan Fortune:
I can jump into theory a little bit more because oftentimes when I’m sharing this kind of concept, it’s like, well, okay, this sounds like it’s going to be interesting, but how am I going to apply this practically to my business? And there is a pretty straightforward method that I’ve seen work for several folks, which I can walk through.  

Rob Walling:
Yeah, let’s do it.  

Brendan Fortune:
So first thing you want to do is find your best customers, and maybe that’s your highest paying or your highest growing customers. And you can start with just one from that one customer. You want to ask yourself, what are the actions that they do in my every week? Or for some products it’s like every month marketing automation. It doesn’t always have as close of a login cycle, but what are the things that they’re doing over and over and over again? That’s the key. And once you’ve identified that, then you want to try and distill that into this pattern, the cyclical pattern of behavior. So going back to the simpler drip example, they put data in, they send a message off that data, that data actually influences behavior, and they can measure that. So whether it’s by a conversion or some other thing that’s measured in the product that says, yeah, someone clicked on this thing. 

And then that’s the movement that puts them back into the data part of the flywheel. So pick one of your highest paying customers, look at what they’re doing on a recurring basis and then figure out what the pattern of behavior is. Less than five steps, ideally just three, even if it means cutting some stuff out and cutting some corners. And the one requirement when you’re doing that is to make sure that each step naturally leads to the next. When you’re telling a story about it, it makes sense to you take some thinking. A lot of times I see people kind of come in and just jump straight to a flywheel and they’re like, yeah, they log into my page and then they search for a document and then they click to open the document or something. There’s some fairly simple pattern of behavior, and that’s where the last part of this flywheel exercise comes in, which is once you’ve identified this recurring pattern of behavior that you think represents how your customers get value out of your product, then you have to ask yourself, could I charge based on that behavior? 

And if it sounds totally insane, I mean Google Docs for example, like, oh, we’re going to charge you for every search that you run. Well, that seems kind of insane. Who’s going to accept that sort of pricing it? I don’t get value every single time that I can quantify off of that. That’s where you might need to pivot your flywheel a little bit and say, okay, well that behavior is not price worthy, so what else could I potentially try? And that’s where if you can get that nailed down, that’s where you can answer that question. Can I turn this into an expansion revenue engine? Which is really what the flywheel is meant to materialize for your business. And if you can do that, then all you got to do for your product strategy is be like, why aren’t people going between each step of this flywheel? Why aren’t they, oh, it’s because this is too hard. Okay, what are we going to prioritize making that easier? Great. And then that’s going to accelerate your flywheel, which is going to accelerate your expansion revenue and that’s going to grow your business.  

Rob Walling:
That’s the key. The two are linked. Yeah. Yeah. If they’re disparate, if they’re two different things, if you’re charging not for anything in the flywheel, then you now have to optimize the flywheel to get people onboarded and to improve retention. And then pricing is separate. And what you’re saying is if you can tie the two together, your job is so much easier.  

Brendan Fortune:
Yeah, it’s so much easier. Then you have to not mess it up. But a lot of times it’s one of the problems with user-based pricing is you buy it, you’re one person, you’re always going to be one person. Maybe a company’s going to come in or your company’s going to grow and you’ll want to add more people to it, that’s fine, but it’s not tied to any pattern of behavior and you’re going to grow slower.  

Rob Walling:
Yeah, that’s interesting. When I talk to founders and I’m trying to help them with their pricing, sometimes it’s a first crack of like, well, we kind of got to go with our gut on this and let’s make it up a little bit. Or if they know something’s off, which is very common with new TinySeed batches, there’s usually like 60, 70% of the batch is like something’s off. We might either need to raise or our value metric is off or there’s something, or I have too many value metrics. There was someone with five value metrics and I was like, Nope, nope, nope. There’s no way you need all these. And he was like, oh, well this one’s for resellers. And I was like, then have a completely separate pricing page for resellers and move all that over there because you do not want all that cumbersome here. 

And I think we get from five down to either one or maybe two. And the second one was more of with an asterisk of within fair use, it was kind of really simplified. And I think, do we know it’s right? No. Do I think it’s better? I do. And now he gets to experiment with it and see over the next 3, 4, 5 months it feels right. And I think that’s a big deal. I used to say this was back in the hit tail days, 20 12, 20 13, so was that almost 13, 12, 13 years ago. I remember doing a talk and saying what I’m about to say is going to be so obvious, but it was not obvious, but no one was saying this. It was not obvious 13 years ago of you should be making more money, you should be charging more money, the more value your customer gets from your product. 

And it’s like, okay, that’s cool. And again, I say that today and it’s like, well, obviously it was like I’ve never heard that sentence ever. And then it’s like, okay, so what value do they get? What is the value? What is the value of an email service provider? Right? Email marketing like Drip, is it number of, because you and I consider and brainstorm and be like, well, it’s the dollar amount they make off of the emails they send maybe can you track that? This is where it comes back to, can I track that and can I charge based on that if I’m not doing the payment processing? Probably not. Probably can’t charge on that. And then it’s like, so is it the revenue? What if someone has an email list and they’re a blogger and they don’t sell anything really? They sell some courses maybe, but a lot of it is ad revenue, for instance. 

Well then that doesn’t make sense either. So then it’s like, well, is it number of emails sent? Well, maybe. And actually that’s what SendGrid does, right? But they’re more of an API. There’s something about, and I don’t know why the whole industry landed on people subscribers or whatever, but that does, the beauty of subscribers versus emails sent is I don’t know how much emails sent goes up every month, every month, every month for different accounts. But I do know that the ones that are succeeding, the customers that are succeeding, they do add subscribers every month. You know what I mean? Not every business can have the amazing, it’s good for the customer and it’s good for the business. It’s actually really hard. You can often find pricing that’s like, Ooh, this is optimal for the business and no customer is willing to pay it. That comes back to the, I think you said fairness, is it right?  

Brendan Fortune:
Yes.  

Rob Walling:
Or what’s so great? I have founders who come to me usually not TinySeed founders unless I’m telling ’em to change their pricing, but they’ll say, well, the reason that I’m a project management solution, all the other project management solutions charge based on either seats or projects or something like that. And the reason that people come to us is because unlimited all that stuff. And that’s why I have customers. So I can’t stop doing that. And I’m like, you are building a terrible business. You are not increasing. They’re getting more value and they’re not paying you. You’re going to cap at 5K MRR or 10 KMR. You’re never going to make it to seven or eight figures because it’s too in favor of the customer. Your pricing is too generous. So threading that needle as they say is harder than it sounds.  

Brendan Fortune:
Yeah, it is. And that’s also when thinking about different businesses to start, this is an interesting exercise to play around with. There’s a session recording is an interesting one, like full Story or Log Rocket, and I think there are a couple startups starting there. One of the best things about that model is it’s usage based on sessions, and that makes a lot of sense to customers. For the most part. They’re willing to do it, so you’re going to be able to get some of that expansion revenue. Another interesting one, and I shared only in case it sparks something, Intercom has their AI powered chatbot and they’ve got an interesting pricing model for that, which is they charge based on successfully resolved chats as marked by the user. Okay, did we solve your problem? Yes. Which is interesting because that system feels like it could be kind of gamed, but it is something that can be measured and it’s something that the company itself isn’t selecting and perhaps it could influence. That’s on the spectrum of not fair at all to super fair. That’s on the super fair front. I actually am curious to see if they’re, see how it works, how their expansion revenue, it’s working. Yeah, it’s a fun story, but  

Rob Walling:
I saw a screenshot of a customer support tool, I think it might’ve been HelpScout Scout, which we use back in the day Drip. And they were moving their pricing from seat based, which they’ve been forever to number of tickets responded to or something like that. And that people were rage quit. And this was within the last few months, and I hope it’s Help Scout, I hope I’m not throwing ’em under the bus, but it was one of those kind of startupy ones that has become much more prominent. And I was like, oh, I wouldn’t, no, that’s too far. That is not fair anymore to me. Unless you, now if you start that way and everybody knows that going in maybe, but to change now from seed after having to begin seed base for 15 years to suddenly that it’s like, oh, that’s a real, that’s tough.  

Brendan Fortune:
It’s a hard sell, especially if you are raising your prices by doing that. And that’s the one way I could see it potentially working. If you’re like, Hey, we’ve got this a new model and it’s actually going to save you money, then you just hope that you’re not again, screwing your business because that is then a heavy risk 

Mix panel for anyone who uses that. They may have experienced their kind of pricing back and forth, which is just unusual. I haven’t seen that very much. But they started charging by events and then they were like, you know what? That’s not fair. We’re going to charge by Mtus segment or by people, unique people, and then we’ll put a very generous cap on the number of events you can log against a person. And they did that for two years and then the founder updated or the CEO was like, Hey, just kidding. We’re going to go back to event-based stuff. And the short version is because they had to make more money than they were able to make off empty use. So it’s a risky thing, but also, I mean, like you were saying at the beginning, if you can get the pricing and packaging, I dunno, sometimes it’s like 80 or 90% of the money challenge. And even as you’re constructing the business just thinking about, am I actually going to be able to charge for this thing? That’s almost all that matters at the end of the day, if it’s a business that you’re creating.  

Rob Walling:
Brandon Fortune, thanks so much for joining me on the show. If folks want to keep up with you or get in touch with you, they can hit you up on LinkedIn. You are Brendan Fortune and you were telling me offline if people have thoughts, comments, if they think fly pricing and Flywheel is bs, right, or if they think it’s great or have questions, they can reach out to you.  

Brendan Fortune:
Yeah. Yep. Absolutely. I love to discuss it and there’s always room to improve some of the process of pulling this thing together.  

Rob Walling:
All right, thanks again for joining me man.  

Brendan Fortune:
Alright, thank you.  

Rob Walling:
Thanks so much to Brendan for coming on the show. He shared a link to his Miro template and an image. We’ll be in the show notes. It’s all the stuff we were kind of talking about during the episode. He was very generous with his time. In addition, a reminder that if you have any type of product questions, product management, deciding what to build, when to build, how to market it, how to communicate it to your team, just anything around product management. Brendan is an expert and if we get enough questions, I will have him back on the show To answer those, you can send ’em to questions at startups For the Rest Of Us dot com or head to startups For the Rest Of Us dot com. Click ask a question in the top nav and of course put product question in the subject and I’ll get ’em back on the show. Thank you for listening this week and every week. This is Rob Walling signing off from episode 756. Hello, dear listener, you found the hidden track on startups For the Rest Of Us, episode 750, something in this track. I’m going to ask Brendan Fortune five trivia questions about Fifth Edition, DUNS and Dragons for those in case I didn’t already say it in the episode. Brendan has played in my DD game with Derek Rimer, who listeners of the show know as well as a couple other founders here in the Minneapolis area and Brendan knows the rules pretty good. You know why  

Brendan Fortune:
I know the rules pretty  

Rob Walling:
Good. Don’t say it. Why do you know the rules? Pretty good. Balder’s Gate three. Balder’s Gate three. So whenever Brendan references Balders Gate three at my table, I force him to drink something. And it’s not always alcoholic because we need to be responsible kids. But BG three, it touched the rules. It did. It’s a good game. Yeah, it is. Actually. I’ve seen it. I’ve never played it. Alright, so let’s dive in. We’re going to go from easiest to hardest and obviously if you’ve never played Fifth Edition, DED, you don’t give a crap about it. Just skip to the next podcast. This is just fun people we’re chilling. The first question, what ability score is used for range attack  

Brendan Fortune:
Roles? Dexterity all day?  

Rob Walling:
Yes. Final answer.  

Brendan Fortune:
Final answer. Do you need to phone a friend? Not yet. Although I have Chet GPT up. I’m going to try not to. Don’t dare it, Don. Don’t you dare  

Rob Walling:
Use it. It’ll make me sound so  

Brendan Fortune:
Smart. Alright, fine.  

Rob Walling:
You got one out of one so far. Ding ding. Yes. Second question. Getting slightly harder. What saving throw is required to resist the fireball spell constitution? Incorrect. It is dexterity. It was a trick because the first and the second answers were the same.  

Brendan Fortune:
Boo  

Rob Walling:
Fireball,  

Brendan Fortune:
Correct? Not representing three. Well,  

Rob Walling:
The best you can do now is 80%. B minus. Nice. Next question. Getting slightly harder. What is the maximum level a character can reach in a single class?  

Brendan Fortune:
I should know this, but we’re so far away. I’m going to say I’m watching your face. 1220. The answer is  

Rob Walling:
20. Yes, that’s what I said. Got it. 67% right. Now you have a D plus, which I’m sure was your GPA and I got to be Derek though in high school. What did he get? I don’t remember. Actually we need to look back at that episode. The fourth question. How far can a character typically jump with a strength score of 15 long jumps?  

Brendan Fortune:
15 feet? That is correct. Oh wow. Okay. This is, I’ve never jumped in our game.  

Rob Walling:
Not once. GBTA character can long jump 15 feet equal to their strength score. If they have a 10 foot running start,  

Brendan Fortune:
Look at that.  

Rob Walling:
Okay, the fifth and final question. Oh, this is brutal. This is really detailed. How many spell slots does a fifth level wizard have for third level spells? I think just one. Two. Yeah, one. So here’s the thing, I’m not going to hold you to this one because that’s just not fair. It’s two. But why would you Who memorizes that? No. So how about this is your fifth, which condition prevents a creature from taking actions or reactions?  

Brendan Fortune:
Incapacitated.  

Rob Walling:
So here’s the thing  

Brendan Fortune:
And paralyzed, but that’s incapacitated.  

Rob Walling:
I think you’re right is in, because the answer that GPT has is stunned, but I think paralyzed but I think wouldn’t paralyzed do the same thing. I’m going to give that to you.  

Brendan Fortune:
Okay,  

Rob Walling:
Good. I think there are multiple answers is my gut.  

Brendan Fortune:
Yeah, because a lot of things could cause stunning  

Rob Walling:
As everyone know. Well, stunned is also a condition, but as everyone knows who plays at my table, I’m the dungeon master and I barely know the rules of dungeons and  

Brendan Fortune:
Dragons. That’s where to play.  

Rob Walling:
That is the best. So you got an 80% solid B minus way to show up. Thanks for playing.  

Brendan Fortune:
Thanks for having me. And I’m going to rub this in Derek’s face. I don’t even care what he got. I’m just going to say that I did better just be like, I beat you. I did better than you. Yeah, exactly.