Episodes

Rob Walling:
You’re listening to Startups For the Rest Of Us, I’m Rob Walling. Every week on this show since 2010, I’ve been showing up sometimes with a co-host, sometimes on my own to talk through what it’s like to build ambitious SaaS companies. And in the early days as SaaS was just becoming a thing, we also talked about downloadable software and mobile apps and even sometimes content websites and e-commerce sites because at that time I was running the Gamut info products, there was all kinds of stuff. But over time, this show honed in on SaaS software as a service because SaaS, especially B2B SaaS is the best business model in the world. And that’s why myself and the tens of thousands of listeners of this show, as well as the guests that you hear appear on the show, go all in on building incredible companies that bring us freedom, purpose, and relationships and that we can build and create and bring into the world without sacrificing our health, our family relationships, and the rest of our lives. 

Because we build businesses to support and to improve our lives rather than sacrificing the quality of our lives and our relationships for our companies. We want to be ambitious. We want to build incredible companies, but we want to do it in a way that isn’t unicorn or bust and that doesn’t require asking anyone for permission. So today I’m going to be digging into controversial takes from Scraping Bee co-founder Pierre de Wolff, and what I’m going to do is walk through a tweet that he posted in the middle of 2024, so about eight or nine months ago, and he says, these are my semi controversial beliefs I have about bootstrapping a successful product, and he has 15 or 20 bullets that I think are fascinating, some of which I agree with, some of which has more nuance, others I inevitably will disagree with. The best part of this is I’m not telling him that I’m recording this. 

Pierre and I know each other pretty well. He’s spoken at MicroComp. He’s a TinySeed founder. Scraping Bee is an incredible business. They’ve been public about mostly bootstrapping it to millions of dollars in revenue and they’ve done very well and grown very quickly. So an accomplished and successful founder and also a prolific ex Twitter user. And so I look forward to diving into his thoughts here in just a second. Before I do that, I want to tell you about our MicroConf Growth retreat that we’re going to be holding in London. This May of 2025, May 14th through the 16th. There are only 60 tickets available and by the time you hear this, there will be less than 60. We will sell this event out, and this is a new type of event that we’re trying, MicroConf Growth Retreat where SaaS founders connect, recharge and grow with the size. 

We’re planning it at 60 people. It’s an intimate gathering designed for SaaS founders who want to build deeper connections, gain clarity on their business and experience London like never before. So there’s going to be deep networking sessions. There’s going to be a morning work session to get feedback on your business, solve roadblocks, and there will be workshop strategies in small focused groups, then afternoon excursions and a ton of founder-led conversations throughout the event. Activities include things like going to electric shuffle to play shuffleboard. I’ve actually been to that place. Relaxing Paddleboard sessions on Region’s Canal, a guided tour of London’s best pubs and more to find out more and to buy a ticket before this event inevitably sells out. Head to MicroConf dot com and look in the top NAV for events and it’s called Growth Retreat 2025. 

All right, so let’s dive in to Pierre’s thoughts. We are going to link this tweet up in the show notes. The interesting thing is X, Twitter has some weird bugs these days. It doesn’t actually show a date of his tweet, but the replies are mostly from July 11th, 2024, so I’m going to assume that’s when this tweet went live. It’s such a weird bug. Anyways, Pierre says, today Marks six years since I left my job to start my indie hacker journey. I would say they’re far beyond being Indie hackers. They’re ambitious SaaS founders. They’re mostly bootstrapped, they’re TinySeed backed. Pierre continues. We’re now making millions a year, but we started from zero many times. Here’s a list of semi controversial beliefs I have about bootstrapping a successful product. Number one, don’t waste time on a rebrand. You don’t have a brand. You have a product of barely making $2,000 a month and at $2,000 a month, I would agree with him. 

The question then, of course I think through, because I’m on a podcast, he’s on X Twitter, on exter, you have to be extremely brief on a podcast. I would then think to myself, well, when does it make sense to rebrand? And usually that’s further down the line. It’s if you basically get an MVP brand out and you’re doing 20 or 30 KA month or your brand is hurting your efforts, it’s not helping you close sales, it’s actually driving prospects away because your design looks cheap. It isn’t conveying the messaging and frankly, the gravitas or some element of your product or your business. That’s the time when I think about a rebrand, and it is very rare that I will do that. It’s only when I’m seriously bothered. Like recently, Rob Walling dot com, which I had designed in 2018, and it was on WordPress. I had that redesigned and moved to Squarespace, and there were two reasons for it. 

One was because of the site was hard to edit, and I needed folks on my teams MicroConf TinySeed to be able to spin up new landing pages and change text. And even just adding a mention of TinySeed, there was no mention of TinySeed on Rob Walling dot com. Adding a mention of TinySeed would’ve been clunky. I would’ve basically had to hire a developer, not hardcore developer, but someone who can muck around with a word pressing and I just didn’t want it. And is Squarespace the best platform in the world? Of course not, but is Squarespace really easy to edit and my team knows how to use it? Yes, and so we paid for a rebrand of Rob Walling dot com. Now I think that’s worth it. It’s Rob Walling as a personal brand, not Rob Walling me as a person, but Rob Walling dot com sends a lot of people into this MicroConf TinySeed podcast, YouTube and Books ecosystem, and improving the brand of that property will absolutely sell more books, get more people into the ecosystem. 

And you should check it out actually, Rob Walling dot com, as I’ve said 17 times already on this podcast, but you can head there. And the about page I think is probably the one I’m most proud of. I just think our designers did an incredible job, but not only of the visual design, but of the informational design. And shout out to producer Ron for pulling almost all the content for that together in just a handful of days. But the idea there is this is a mature brand. If we were to redesign MicroConf tomorrow, I wouldn’t want to because it would mean we were standing still. But enough people see that site and the brand is solid enough that at times it can be justifiable. Do I think you should rebrand every year or two? Absolutely not. Do I think you should not rebrand as Pierre says, when you’re barely making $2,000 a month? 

Yeah, he and I are locked in on that. His semi controversial. Take number two, I think I’m just going to say controversial take so I don’t have to say semi every time. His take number two is.com, dot io dot. so.ai. In the end, no one cares. I think he’s mostly right here. I think.com is superior, but how much does it matter if you’re do io dot? So ai, I don’t know. I don’t think it’s the end of the world to be honest, as long as people can find you in a Google search. And as long as, the thing that bothered me so much Derek and I both was that we used get drip.com, so people kept calling Drip get drip, and that was infuriating. And what I wished I had done is bought drip.io or drip.co, even these days, drip ly. No, I didn’t want ly but Drip. 

So drip ai, any of those would have made sense. And I think that’s the big lesson I learned from there is to get your brand or exact company or product domain name, and then the TLD. The top level domain I make is less important because for maybe a month or two before we got TinySeed dot com, we got TinySeed fund.com. That was the initial $8 domain that I purchased before I went and bought TinySeed on the secondary market and people started calling us TinySeed Fund, and that was not fun. I did not enjoy that. And the misrepresentation is too strong of a word, but it is not how I wanted people to know us. It’s confusing. And so in the end, I do agree with Pierre, although I would say he says no one cares across these. I would say.com is the clear winner. And then for the others, I just don’t think it makes that much of a difference. 

Controversial. Take number three. Don’t think a affiliation or affiliate marketing will fix your acquisition issues. It’ll just create another acquisition problem acquiring affiliate partners. 100% true. And I don’t know if Pierre found this on his own or I’ve been saying this for 10, 12 years, that affiliate marketing is enterprise sales. And this is why I say if you are going to be a SaaS founder, don’t build your audience, build your network. Because if you build a network of folks who have audiences, that’s the killer play right there. You can then go to your network, which are people that you can text or email, and they respond right away. You’re in private Slack groups with ’em, you see ’em in person, you recognize them. Maybe you’d go out to dinner with ’em and you can ring them up. And just like Sherry and I did when we wrote Exit strategy recently, I emailed John Warlow and said, Hey, John, nice to talk to you. 

I haven’t seen you in six months. I hope things are well with you and the business. Hey, Ben Chestnut, co-founder, MailChimp. Thanks for speaking at MicroConf. Would you be interested in writing a testimonial for this book? John Warlow, would you write the forward for exit strategy? Derek Sives. Hey, man, been a couple years since we chatted and we hung out in Thailand 10 years ago. Would you be willing to read my next book that I’m writing with Sherry and write a testimonial? Hey, Sam Parr, founder of the Hustle, host of my first million, Eric Huberman, founder and CEO Hawk Media. Sherry actually knows him and on and on and on. I say these names and if I didn’t know them and they didn’t know me, it would be very difficult to get them to write endorsements of our books. And if I was a SaaS founder or wanted to do affiliate marketing, it’s these kinds of people that I would be going out to saying, does this make sense for you to promote this for this commission? 

Are you willing to help me? That’s why your network is so, so important when you’re building SaaS and your audience itself is fine. It’s an initial leg up, but your audience isn’t big enough to build a viable SaaS business on. And so back to my point about affiliate marketing being enterprise sales, it’s basically you going out and acquiring the affiliate partners that have existing audiences. Affiliate partners without existing audiences will not drive anyone. They will be rounding errors. It will be the long tail where they send you one new customer a year, and it’s more pain to deal with than it’s worth. And you want affiliate partners with large lists, large audiences. Now, whether that’s a big YouTube list, whether that’s a big podcast audience, a big email list, people that are listening to them in one way it’s owned media, right? It’s the channel that they own and they can promote you as an affiliate. 

You have to then go recruit them. If you have a great network, boom, it’s done. Otherwise you’re doing SPR said, it’s basically enterprise sales. It creates another acquisition problem acquiring affiliate partners, a hundred percent on board with this one. Number four, there is no silver bullet. There isn’t one thing that will grow your product from zero to one, but many things will grow it from 0.1 to 0.11. So from point 10 to point 11, if you think about it for the most part, yeah, there’s been a couple silver bullets that I’ve seen, but this is across hundreds, hundreds of companies, maybe thousands where people do stumble into an idea exactly the right time. I had Braden Dennis, the co-founder of fin chat.io on this podcast and them pivoting into the AI space, really was kind of a silver bullet and brought ’em from zero to one, but there’s a bunch of reasons. 

They had a bunch of data that was proprietary for the past several years, and they launched this MVP, I think it was in like four weeks or six weeks. You can go back and listen to the interview. There was a silver bullet there. There was also a silver bullet with Drip, although it wasn’t zero to one, so it’s still in line with what P is saying. But when we launched our visual workflow builder that took Derek five months to build, that was an unlock. And we went from growing from let’s say three to 5,000 MRR each month it went up to 10 KA month. I mean it was noticeable. Noticeable. It really wasn’t unlock, it was very difficult to build. It was complicated, but that feature was holding back a lot of folks from signing up. And so Pierre is right though there are no silver bullets and across the 212 companies that I’m invested in as well as the literally thousands of founders that I’ve spoken with over the years in general, it’s going to be even by the definition of silver bullet that I was giving where it’s not actually a silver bullet, but it’s just a level up or something that really accelerates growth or you feel like isn’t unlock. 

It’s extremely rare, so don’t count on it if you get lucky. We have hard work, luck and skill. Basically what Pierre is saying is develop your skill and work hard. Don’t count on luck, and I would agree with that. Number five, if you don’t know where to begin, copy what works best. That probably means emulating the best in class, not your competitors. Stripe for documentation, Amazon for conversion, apple for copywriting. Expand your copy scope. I really like this advice actually. I dunno that I’ve ever thought of it this way, but he’s exactly right. I know I’ve quoted on this podcast some copy that I’ve seen in Instagram ads that I thought was really clever about things not being the cheapest. These socks are not the cheapest because it’s not cheap to make amazing, awesome socks, and he’s right. Amazon obviously spent a lot of money converting and Apple does have quite good copy and Stripes documentation is amazing. 

So I think this is great advice. Hell, you’ll hear me on this podcast, talk about Picasso, talk about Paul McCartney’s baselines, talk about John Lennon writing Strawberry Fields forever. Talk about Dave ett on his Comic lab podcast. He’ll talk there about drawing comics and the philosophy behind being a self-employed entrepreneur. Basically, as a comics artist, I pull things in from all kinds of disciplines to help me make sense of this B2B SaaS landscape, and I definitely think you should as well. I like this advice a lot. Number six, once you find an acquisition channel that works, forget everything else, every dollar spent elsewhere is a dollar that could have been spent with a guaranteed and increasing return since you’ll get better at this acquisition channel. In general, I agree with this. The only time that I see it, I guess not say not working is when you top it out. 

If you’re doing SEO and you kind of own all the keywords you think you can own or you’re running ads and you’ve topped out all the ads, that’s when you do have to look for something else. But if I have an acquisition channel that is halfway working, much like, look, we started going into YouTube and it kind of worked and then we pumped tremendous amount of time, attention, energy, and dollars into growing our YouTube channel and LinkedIn is the place we’re doing that now. We’ve found that LinkedIn resonates with folks. It’s a lot of you listeners are on there. And so now we are recording a bunch of videos, creating a bunch of carousels for that. And I won’t say we’ve forgotten everything else, but I do like the idea, especially in the early stage of being extremely focused on what’s working and grinding on that for three to six months until you feel and three to six months to kind of get it to a place where it’s working. 

And then depending on the channel, you could then literally spend a year or two just expanding, expanding, expanding and growing that single channel without adding anything else. The only time I think you get in trouble with this is when you have a multimillion dollar company, two, three, $4 million of a RR, and you’re still relying on a single channel. That’s when it makes me nervous because even if it’s SEO, which is huge, man, what if Google accidentally de ranks you or delists you? If you don’t have any other channels, it becomes dangerous, but it’s all about that risk versus reward calculation that you have to do as a founder, as to when should I branch out into the next one? What you don’t want to do is try to experiment with and develop four channels at once because you’re basically probably with your limited resources, not going to succeed at any of them. 

So I definitely like this. Advice number seven is be the generalist hire specialists. The best way to work with people, better than you is to find those who excel at one thing. People who are good at everything will not work for you. They’ll build their own company. Yeah, I mostly agree with this. As a founder, you have to be a generalist hiring specialist, especially in the early days. I think it’s helpful. Well, there’s a couple ways to look at this, right? In the early days of your startup, you often need someone to do two things at once because you don’t have enough support to keep someone busy. You don’t have enough customer success to keep ’em busy full time. But man, if you can hire someone who could do both, would you say they’re a specialist? I don’t know. They’re kind of doing two roles technically, but I wouldn’t call ’em a generalist, so maybe this is in line with what Pierre is saying. 

As a company gets bigger, you definitely hire more specialists. I think people who are good at everything are still hireable. I think people with multiple skill sets, like Tracy Osborne, who’s been on this show many times, she’s an author of multiple books. She’s a graphic designer, she can write copy, she can do build Funnels, email marketing, she can manage people. She runs the accelerator. She and I are doing sales calls currently for SaaS Institute, which is the premium coaching for seven figure SaaS founders, SaaS institute.com, if you’re curious. So she can do a lot of things. And while she has built her own company, she did come on board early with TinySeed because we are doing really interesting things that she wanted to be part of. So there are times when you can paint a vision, paint a picture of what the future will look like, and granted, we did have budget TinySeed raised funding. 

We have currently $42 million under management, and the management fees from that allowed us to hire someone more senior who could do more things. And I think in this case, Pierre is talking to Indie Hackers. She’s not expecting ’em to have funding in the bank to be able to hire someone like a Tracy Osborne. So this is where I’m just adding nuance on a podcast. And again, if I was on Twitter, it would be one sentence and I would leave it behind, but I think that in the early days of a bootstrapped SaaS or a cash strapped SaaS, as I might say, I like to hire people who have that skillset, but maybe who have one other skillset like, oh, they’re in customer support, but then maybe they also can write support docs and maybe they could do blog posts. It’s a stretch, but maybe they could help with some other thing. 

You don’t want to search for a unicorn, someone who’s good at three things. Hiring generalists is really challenging, but I do like the gist of this advice, which is to be the generalist and then usually hire folks who are good at, especially if they’re contractors, actually freelancers or contractors, if I’m working with them, yes, I want them to be extremely specialized. I can just hire a bunch of them for all of the little things that I need done. I don’t need ’em to work part-time. Number eight, never offer a plan with unlimited features. It leaves money on the table for whale customers who could make up 70% of your revenue. And I think Pierre is talking from experience here. I don’t know if he took this one from the tiny C Playbook, which we have a pricing playbook where we talk about this kind of stuff, don’t do unlimited, or if they just discovered it on their own, but a hundred percent no unlimited. 

The only time, I mean, there’s some rare instances where you can offer unlimited something but not your value metric, right? If you’re measuring based on the number of email subscribers, there is no unlimited email subscriber plan with MailChimp or if I was starting an email service provider, you can offer unlimited other thing like, Hey, you get unlimited sends within our terms of service because that’s not the value metric that you are charging based on. And ASPR says, these whale customers are, your large customers are going to make up a huge chunk of your revenue if you do your pricing right. Number nine, if you can’t offer both a cheap plan and exceptional support, then don’t offer a cheap plan feature. Gating support means potential. Big customers will have a terrible experience and look elsewhere, and worse, you’ll never hear from them. And then I’m going to add and worse, everyone at that cheat plan will bitch about you on social media, on Reddit, on private forums. 

It’s not a good look. I agree here, don’t do it. Number 10, there is absolutely no reason to add Google login and any relevant social logins to your signup page. I think I disagree with this. I have seen folks, Ruben Gomez with Sewell and O Heat and Shaw did this where they add the Google login and it does increase their funnel. It increases the number of folks coming through their conversion funnel. So I think that’s the reason to me, there’s no other reason other than to improve your funnel likely. So I’m curious if Pierre and Kevin, his co-founder, have firsthand experience with this one or where it’s coming from because I do think I disagree with him on this one. Number 11, read all your competitors reviews on G two and Capterra several times per year. I love this idea, not only so you get an idea of what people are upset with, and that can help sometimes guide your direction and your positioning and your copy and your strategy and how you do support and all that stuff. 

But it can also help you in sales calls where you can specifically point out to a review or hey, you can say, Hey, go to look at Capterra. Here are the general complaints. I think this is really good advice. Number 12, it’s delusional to think that if you can make it to 10 KMRR, you’ll magically get to 100 KMRR. There’s this little thing called churn. That’s funny. Yeah, I mean, 10 Xing a business like that always requires, it usually requires you to do something different. It doesn’t always, but definitely there’s churn. And oftentimes as you get bigger, you’ll find that there are headwinds that creep up that you just can’t foresee until you get there. And then there’s churn number 12. If you share your success on Twitter, you will get copied 100%. There’s no way around it. He’s probably right. I mean, I’ve shared my success at conferences and on this podcast, and I’m usually copied a hundred percent. 

I think everything I know hit tail a hundred percent was copied almost pixel for pixel Drip was copied by several folks. TinySeed has been copied. MicroConf has been, yeah. All right. He’s right. It’s on Twitter. If you share you’re success anywhere, you’re going to get copied. Yeah, it sucks. It sucks, but it is the way things go. Number 13, people who tell you build this feature and all subscribe will never subscribe to your SaaS. He’s probably right. And in fact, here’s something that we used to do well, I have a couple counter examples, but it’s small numbers, but I remember in the early days of Drip when people would say this, I would say, great, sign up and your credit card. We will pause your billing until this feature is ready and the day this feature is ready, we will unpause your account. And I got some people to do that and it worked, but I’m not saying that to counter this because he’s mostly right. 

There’s a lot of people. What is the one on Comic lab? The co-host, Brad Geiger says the people who tell you, I would buy that comic or that joke, if it was on a t-shirt, we’ll never buy it. And he has all these examples of putting it on a little red bubble t-shirt, sending it to him, and never making a sale and never is a strong word, but realistically, you get the idea. It’s like most people say these things and just don’t mean it. So what I would definitely avoid is hearing build this feature and I’ll subscribe and going off and building it based on just that because the odds are pretty low. They’re actually going to follow through. Number 14, the Mom Test by Rob Fitzpatrick are the best 130 pages you’ll ever read about product development, and I don’t know that I can disagree with that. 

I would add in two other resources, actually deploy Empathy, the book by Michelle Hanson and the market chapter of the SaaS Playbook. I don’t think I would want to write an entire book on product development. It’s something I know how to do, but I don’t feel like I’m a world-class expert at it, but I think I know enough that I could write a chapter about it. I think there’s 30 pages or something in the SaaS playbook, and that’s another resource that I think is maybe not talked about enough out of the SaaS playbook. I think there’s some good guidelines in there. So mom test, deploy empathy and the market chapter of the SaaS Playbook number 14, and there’s only 16, so we just have another couple to go. The easiest way to sell your product when you start from zero is to provide value to your target demographic for free. 

Participate in forums, engage in Facebook groups, answer on Twitter. People will like you want to know more about you and will be open to learning about your thing. It’s not a bad way to go and this way to do it without an audience. Or if you have a network of people with audiences, it’s easy to get on their podcast or get on their YouTube channel or write something for their email newsletter. Whatever form that audience takes, it’s easy for you to get in front of them. Obviously, if you have your own audience, that’s fine, but it’s not something I would spend a ton of time building. I do think that forums Facebook groups, answering things on Twitter and being generally helpful to a demographic is good advice. Number 15, launching on Product Hunt is a nice baptism of fire if you’ve never launched anything, but don’t overthink it. 

It’s not as impactful as it used to be. I would agree with that. And I think even more so today. Again, this was written eight or nine months ago and the 16th and final controversial take, you’re probably never going to sell your SaaS for a 10 x multiple. Heck, you’ll probably never be able to sell your SaaS at all. That doesn’t mean you don’t have a great asset, but two to five X multiple is what happens in real life 99% of the time. And for this one, I think it depends. If he’s truly talking to indie hackers who build small lifestyle businesses, then I think that’s true. And I think when you look at Quiet Lights, numbers or like acquire.com will put stuff out, FE international, these smaller assets where you’re just selling the tech, it’s net profit or seller discretionary earning multiple, but let’s just say net profit multiples are like five to seven, four to seven, five to eight, four to kind of in that range. 

And then if you get to about a million and a half, 2 million a RR and you’re growing and you’re selling not just the technology but kind of the team, like the whole company, the product, everything you’ve built, that’s more than two to five XARR usually. Now I have seen, I saw one that was, what was it? Super flat and it went for 3.5 x. I’ve seen some go in that two to four range, but that could be declining or flat. But if you are growing healthily, I would think, Hey, I might be able to get, it depends on the time. It really does depend on what year you selling, because in 2021, you sell for a lot more, and then in 2025, the multiples were down. But have I seen exits for five to 10 XARR and up more than 10 XARR in the past 18 months for multimillion dollar SaaS companies? 

I have, and I’m intimately, this is not secondhand. This is firsthand knowledge of being affiliated with it. And so this is where it just depends. Multiples are, if you think about a bell curve and there’s the bottom end, which is the, it’s very few sell in that range and the top end, very few sell in that range, and then there’s this big kind of bubble in the middle and on the bottom end, it’s usually declining or flat or your churn is high. Growth is the number one factor. Churn is the number two factor. And man, if you are two, three, 4 million and you’re growing a hundred percent year over year or 50% year over year, you can get crazy high multiples. And then it also depends on just who’s in the market for it, who really wants this? Are you vertical SaaS versus horizontal? There’s a bunch of factors that go into it, so these multiples are helpful, but realize Pierre is probably right. 

You’re probably never going to sell your SaaS for a 10 x multiple, and in fact, you’re probably never sell your SaaS at all. It’s not an unreasonable thing to say. So that’s it for Pierre De Wolfe, co-founder of Scraping Bees, semi controversial takes on X Twitter. I hope you enjoyed walking through those with me. I really enjoyed just thinking through them, asking the what ifs and expanding on them, because again, that’s the beauty of a podcast is that we can sit here and think more deeply about it than you can on Twitter and explore all the ways that these things are true today. Maybe they weren’t true 10 years ago, maybe they won’t be true in 10 years, but at least for now, I think Pierre’s pretty close to being dead on with his takes. Thank you for joining me again for this episode of Startups of the Rest Of Us, the podcast for ambitious B2B SaaS founders. This is Rob Walling, signing off from episode 768.

Rob Walling:
Welcome back to Startups For the Rest Of Us. I’m your host, Rob Walling, and this week Brendan Fortune returns to the show and we answer questions focused on product management. We talk a lot about identifying and focusing on your ideal customer profile, how to prioritize feature requests, some dangers around using tools to prioritize feature requests, how to think about pricing and more listener questions, focus on product. Before we dive in to the questions, we are raising Fund three for TinySeed. We are investing in ambitious SaaS Bootstrappers. We’ve made 192 investments to date, and fund three is slated to invest in well over a hundred B2B SaaS founders over the next few years. Tiny c.com/invest. If you are interested in indexing your investment across a lot of different B2B SaaS companies that we identify through our application process and we identify as being high velocity and as companies having a high chance of succeeding and providing an amazing return for investors. 

So if you’re an accredited investor or the equivalent of that in your country, you do not have to be US based to invest. Head to TinySeed dot com slash invest. And finally, MicroConf Mastermind applications are open now and they close on March 31st. That’s at MicroConf masterminds.com. If you want to get matched up in a peer group of other ambitious B2B SaaS founders that are looking to travel a similar trajectory to you, and some will be ahead of you, some will be behind you, but frankly, we spend a lot of time to match those that are around the same stage as you. And where we think that a small group of you, four or five, maybe six of you in a mastermind, will be able to provide a ton of value to one another. MicroConf masterminds.com. And with that, let’s dive into listener questions with Brendan Fortune. 

Brendan Fortune, welcome back to Startups For the Rest Of Us, Mr. Walling, nice to be here. You are last on our show in episode 756, why Great Product Management is Critical for your startup. And in that episode, I did a call for questions for product related questions and did we ever get some questions? I think we got too many to answer in a single episode. I think we got almost a dozen. And I want to thank tom@garagetoolapp.com as well as Kyle Marr for sending these questions in. I sent ’em all to you and you handpicked the ones that you felt like would apply to the most people and would be most helpful for the audience. So thanks for doing that.  

Brendan Fortune:
Yeah, I’m excited to get  

Rob Walling:
Going on these. Let’s dive into the first one. So our first question is, it sounds like from the podcast that your ideal customer should be your highest paying customer. Does your ideal customer need to be the one that pays me the most? What if it’s someone that is easiest to work with, most responsive gives me the best feedback, but isn’t necessarily the highest paying customer? What do you think?  

Brendan Fortune:
Yeah, this is such a great question. The ideal customer does not need to be your highest paying one, but if your ideal customer is not in your, let’s say, top 20% of paying customers, it’ll be very important to understand why. The SaaS business model really depends on two things, retention and expansion. And if you can get both right, you unlock this magic of compound growth. And that’s really what makes saso special. Just as an example, so customer io where I work, only a couple percent of customers churn each month, which means there’s about 98%, 99% customer retention each month. And of those greater than 60% expand their profile count each month. And in customer io, we charge based on profile count. So when they add profiles to the system, they pay customer IO a bit more each month. So the combination of keeping these customers month over month and them growing is what unlocks this compound growth. 

So when you’re thinking about your ideal customer, one of the things to do rather than just jumping to the highest paying, although I think that’s a good shortcut, is you could look for your oldest customer that’s retention. So someone who’s really stuck around and gotten value out of your platform for a while, and you want to combine that with the oldest customer that has also grown their usage of your system the most. So whatever the key actions are, key behaviors that you want to see, you want to see not only that they’ve been around with you for a long time, but also that they’re using you consistently and ideally more and more each month. And those customers, if you’re pricing right, are almost always going to be some of your highest paying. They’ll also often be some of your most responsive because they’re getting value out of your platform. 

They’ve got questions, they’ve got feedback, they want you to improve certain things. They’re probably not going to be the easiest to work with though because they’ll be pushing the boundaries of your system, whether that’s missing capabilities or features, whether that’s the performance, if you’ve got really a high data processing type of product, drip is a good example of that or both at the same time. So look for the ideal customer again and the ones that have been around the longest and have used your product more and more and more over time. That’d be my pitch.  

Rob Walling:
And finding NICP is harder than it sounds. I remember with the Drip and I would say in the early days, but even in the mid days, the later days, there were several different ideal customer profiles. Now, drip is a pretty horizontal tool, right? An ESP marketing automation provider, however you want to classify it. And there were bloggers with these massive lists that would come in and pay a load of money. Problem was is they kind of went to the tool du jour. And so they switched, the switching cost for them was very low because they didn’t build deep automations, really weren’t that technical. And so really what they kind of needed was a newsletter service with some email sequence. This is a pretty light use case, but they paid us a lot of money. And so at a certain point they were a pretty key component of the drip customer base, but as time went on, they were less and less and less and we actually focused less on building features for them. 

Frankly, they just didn’t need the complicated features. SaaS companies were interesting because they did need the complicated features, but to your point, man, they pushed the envelope of everything because they tied into the APIs and they did all types of crazy, I say crazy. It was just what they needed to really communicate well with their customers. Very complicated setups and SaaS customers list sizes are way smaller than bloggers. You get a blogger, we had a blogger with a million emails, rarely did I see a SaaS company with even a hundred thousand emails. That would be a lot, right? 50,000 was more the size and since pricing is based on subscriber account, that’s what we were thinking about. And then what was the other one? Well, e-commerce became a thing even before there was the pivot, right? As I was leaving, they pivoted into e-commerce. We did no marketing into e-commerce. 

We did not even have a Shopify integration and 15% of our customers were e-commerce. And I don’t really know why I didn’t really have reach into e-com, but they came in and I remember their use case being a little different, but Infomarketers actually, and I’m separating those from bloggers may have been the best customers because they tended to, I’d say build bigger lists, maybe not as big as Bloggers is definitely bigger than SaaS. They really needed the components and they locked into our integrations are selling things, and so they needed either that Stripe or the PayPal or the Send Owl or the Gum Road or some type of lightweight cart. These are carts back in the day, I don’t know if Sendal is still around, but these were a lot of the integrations and they I think pushed the platform in a more healthy way that a lot of people could use versus we had some SaaS founders and I guess some info marketers who pushed it to the point where Derek and I kept building things for them. 

But at a certain point I remember being like, why did we build all these super power user features? Like Brennan Dunn, the co-founder of Write Messages, he wanted a full on JavaScript console in, he wanted to write the workflows in JavaScript or markdown or something. And I remember being like, that’s an interesting idea that absolutely one person will use. And so the reason I’m saying all this is you and I can talk about ICP and say, man, you should really find one ICP. It’s not always that easy. And there were, again, everything’s a bell curve, there’s always a spectrum. And I felt like there were Venn diagram overlap or there’s something where bloggers were not our number one ICP, but they were number four for a while and they actually paid the bills for quite a long time. They had these big lists. So I guess all that, that’s my color commentary on this. What do you think about that and how does that translate to larger companies? Let’s say I’m doing 50 million a year as a SaaS. Do I have one ICP or am I adding more over time?  

Brendan Fortune:
Yeah, I think there are almost always multiple ICPs and then there’s one priority. That’s the definition of priorities. You can only have one, at least one at the top. It’s so interesting to hear you talk back on these ICPs for drip though, because even I want to take a minute and play them back on this retention and expansion framework. So the bloggers for example, they are maybe a little bit lower on the retention side, like you said, because switching costs are down. But on the expansion side, they’re high because they’re going to be adding way more people to their list, which is how you charge. So you got one of the elements, but you don’t have both. On the SaaS side, the retention’s going to be really good, and integrations are such a key part of retention strategies for a lot of SaaS products, especially when you have to put in a custom integration, which was part of Drip’s deal, certainly part of customer iOS as well, where there’s an API integration in addition to maybe a Shopify or WooCommerce or something else. 

So you’ve got the retention angle there, but then you’re missing a little bit of that expansion with the SaaS companies and stuff. And ideally you want to try and find someone that’s going to be a little bit of both. And there are some customers, like the info marketer is maybe a little bit of a balance of both because the retention might be a little higher, not because necessarily of their integration. So that could be part of it, but it’s because of the complexity of the workflows and the automations that they might build out. And Brennan Dunn is the ultimate example of that, and he really pushed drip to its limits. So I totally agree with that. And I think when you’re looking at different ICPs, the focus is less on which one should I just go all in on and instead, what’s the stack ranking that I want to put them in based on this combination again, of retention and expansion. 

And it’s rare when it’s just obvious, well, okay, of course we’ll just do this. So you do end up having to focus a little bit on multiple. So that makes a ton of sense. And I think as you get, as company sizes increase as you’re making more and more money, oftentimes what happens is at some point someone will sit down and be like, okay, we need to make personas and personas become a little bit of a shortcut for an ICP. Sometimes they become, I dunno, kind of more of a mental exercise than a practical exercise because people get so obsessed with who’s the buyer? Wait, who’s the user? Who are we going to pick for pictures? All sorts of stuff. But at the end of the day, if you can connect it back to expansion and retention, I think it all boils down to that. And even as companies grow, you have to find who you’re going to prioritize, even if it is more than one ICP.  

Rob Walling:
One other thing I want to add to this before we move to the next question, and it is there’s a third element. It’s not just retention and expansion, although you could lump this into expansion, but I’m going to argue that it shouldn’t be and it’s promotion or spreading the word. And here’s the thing, if you have a bunch of infomarketers or bloggers using your tool and you’ve set up an affiliate program and they like your tool and you pay ’em 20 or 30% top line, they will likely get you hundreds or thousands of customers. Like if you work hard at this and this is your focus and you do webinars with ’em and you push, it’s the playbook that ClickFunnel said, it’s the playbook that lead pages did. I’ve seen it over and over. If instead you focused on SaaS founders, they do not give a shit about affiliate commissions. 

They don’t have an audience, it’s not the same thing. So there’s a third element that is not present in most customer bases to be honest, which is why you’re not bringing it up because it’s probably 5% of potential SaaS apps have this ability, maybe 10%. It’s a very super minority, but if that’s on your radar, you can absolutely grow very quickly, often in an unhealthy way. I’ll say, I often giving away a huge amount of your net margin and often the promotion is to nascent entrepreneurs. Early stage kind of wannapreneurs is the derogatory term for it. And so the churn is really high. But man, I have seen the internals of a business that went, what did it do? I think it was end of year one, two and a half million a RR, and this was basically mostly bootstrapped end of year, two 5 million, end of year, three 10 million, end of year four 20 million. And it was on the back of this. And so it’s an interesting thing. It’s not something I’ve ever executed on, but I have seen it. I’ve seen it both, I’ll say secondhand and third hand through both TinySeed companies and other companies I’ve been involved in.  

Brendan Fortune:
So it’s like the third angle of acquisition. There we go. That’s maybe where I’d play that. And if you can get the, as long as again, the acquisition falls out the leaky bucket, if you don’t have the retention piece of it, which can be the risk and you called that out too, but yeah, that’s a total fair point. If you’ve got a Venn diagram of three things between retention, expansion and acquisition, in a perfect world you get all three. But that’s not very common at all. But yeah, that’s a totally fair point. And I think a lot of, especially like you were saying, that early stage where you’re trying to get some sort of traction, you’re trying to bring a lot of customers in the door, if you’ve got an opportunity to go after that, then do it.  

Rob Walling:
Yeah. And as I said, it may not be the right decision long term. It may not be the healthiest business. You’ll have higher churn than you think, and it doesn’t happen by itself. You don’t just say, Hey, an affiliate program and I have a bunch of bloggers, is that No, you, you have to. I’ll just say I’ll use Expression Wine and dine, but you have to do enterprise sales basically with them to get them to start recommending you. And there’s a whole conversation and stuff. So it’s not as simple as I’m making it sound, but it is a tactic that I’ve seen. 

I want to take a minute to let you know about the MicroConf Growth Retreat, a new event we’re launching in London from May 14th to the 16th of 2025. This isn’t your average conference, we’re keeping it intimate with just 40 to 60 SaaS founders joining us for deep networking and invaluable insights. We’ll have focused morning work sessions where you’ll gain clarity on your business challenges followed by unforgettable afternoon excursions, exploring the best of London, and then we’ll end each night with a reception. Tickets are limited, so head over to MicroConf dot com slash retreat to secure your spot. We will sell this event out. If you want to go to the MicroConf retreat in London, head to MicroConf dot com slash retreat. Let’s dive into our next question. How do you prioritize features slash product requests? Right now I’m doing it based on if multiple customers ask for a feature that would be high priority, along with if a feature is already on our backlog, things I felt that would’ve been a good feature. And then if a customer asked for it, is there a better way? Right now we have about 10 customers, so finding a common denominator in feature requests isn’t always easy. What do you think, sir?  

Brendan Fortune:
So I would amend the last sentence and say, it’s never easy. Even if you’ve got a hundred or a thousand customers, it’s still going to be, this is one of the hardest things to do and this is what a great product manager really, I dunno about solves for you that’s maybe too simple but really accelerates for you and kind of improves your hit rate when it comes to prioritization. So first off, I think you can go deep down a rabbit hole on this question and lots and lots of people have tried to create different equations frameworks for figuring out exactly how you do it. There’s the rice framework, which they’re all fine, they all kind of do similar sort of things, which is try to pick a few elements that are important to your business and then rank things based on them. And that can be a really smart mental exercise as you’re trying to find your flywheel. 

And that is one of my going to be my broken record thing. I know we talked about that in the last episode with pricing and packaging, but the flywheel is your strategy. It’s the thing that you want to prioritize, feature requests that accelerate, that flywheel. All that said, when you’re just getting started, I think the risk that I have seen is more inaction, sporadic action. So kind of just moving all over the place, prioritizing different things that are solving different types of problems. So I’d recommend just a simple prioritization framework like this, pain versus ease one that’s been around for forever if something is really high pain. So when I hear in this question a customer asks for a feature that would be high priority, make an assumption that high priority is also high pain for the customer. They cannot get their job done without this thing. 

That’d be very, very high pain. And if it’s high pain and low effort, which does sometimes happen, then just do it. Don’t think too hard about it, just get it done. If it is something that is a high paying, high effort sort of thing, and this could be like let’s say you had some sort of e-commerce payment product and someone came in and was like, I really need a whole website, e-commerce delivery platform and I want to be able to customize this and that and the other thing, basically an adjacent market expansion that’s going to be really high payment and also really high effort. And in that case you want to slow down and take a look at how you think that will impact your core SaaS metrics around expansion, churn, customer acquisition. And if the answer is it’s not much, I’m not really very certain, you should not do it. 

If you’re not really sure, then take some time maybe a week and spike it out. But I wouldn’t put more than into it or at least that would be my pitch. Moving down the framework. If it’s a low pain, low effort thing, then do it, but try not to do too many of them. There’s the temptation sometimes to only do these things because you see the problem, you understand the problem and you understand the solutions. So you just kind of churn these out and if you do that, you’re going to lose out on the growth potential basically of your business. And then if it’s low pain and high effort, then obviously drop it. And I think, Rob, you had a great example with the Brennan Dunn JavaScript workflow generator, super cool kind of low pain, but definitely higher effort to maintain and troubleshoot and quality control and all that stuff. 

So in those cases, drop it and move on. The other common question that comes up is like, well, does it depend on who asks for a feature if they’re like a high paying customer, if they’re my ICP or whatever? In general, we’ve been talking about you always want to prioritize who you think is the customer that’s going to bring your business toward its goals. But even in that case, I think there’s a little bit of art to this experience, especially early on when you’re trying to try out different flywheels, different patterns of customer behavior that are both good for your customers and good for your business. I think that a lot of flexibility is key as long as you have some sort of learning that comes out of shipping stuff. If you ship the thing and then you can actually answer questions like, Hey, this got used, this didn’t get used. Here’s who used it, did they continue using it? Stuff like that. Then I think your risk is really low of overthinking. Just try and learn.  

Rob Walling:
You’ve outlined the science of product management, the buckets, the low paying, low effort, high paying high, that’s the science of it. The art is when a feature request comes through, which bucket do I put it in? And that’s the thing that I want to communicate to people there is you cannot a hundred percent make these decisions with data. 

It just surveys or asking or there’s always some gut feel, some classification, some ask ai or frankly it’s in my head and that’s like the founders I see who are building products that people want. They develop this sense of their customer, who they’re focused on what they might need. I remember having conversations, we get a feature request and just kind of asking openly like, ah, this is an interesting feature. What percentage of our customer base do we think would actually use this if we rolled it out? And none of us knew, but I remember sometimes being like, my gut is it’s 5%. And so I think to me that’s a relatively, even if it’s high paying, it’s just a low adoption. So I would throw that out or sometimes it’d be like, I bet at least 20 30% of our customer base would do it, which is that felt significant or even 50 or whatever. 

And again, was I completely right? Probably not. Was I right a hundred percent of the time? Probably not. Was I close enough of the time? You don’t have to be right all the time. So that’s the thing I want to call out with this is it is such the cliche that it’s part art, part science, but it is, yes. But I like the science aspect that you’re throwing out of just having, especially early on having these four, it’s basically four buckets, right? Because a two by two matrix and then you can add more stuff later. And that’s where in the early days it’s hard. You don’t know who your ICP is yet, and you’re kind of have a hypothesis. This is also why I believe horizontal SaaS is so much harder. If you’re building Sewell, Ruben Gomez has, it’s a competitor to DocuSign, horizontal electronic signature. 

Can he possibly have one ICP? Probably not. Versus if I’m vertical, I know there’s, let’s look at Jim desk, which is software for gyms, martial arts, dojos, fitness studios, yoga centers and such. It’s just easier. And at that point, yes, of course you’re going to get some gyms with five locations or 20 locations. You’re going to get single location gyms and you’re going to get ones with this much revenue, ones that don’t have a subscription. I don’t know. There’s all things, and you do have to narrow it down, but the number of options for an ICP is much smaller when you are in a vertical, and that is something we see across tiny C companies is that they tend to, there’s less competition frankly in not horizontal markets. And there’s I think a slightly easier time honing in on an ICP.  

Brendan Fortune:
Yeah, that’s pretty, that’s interesting. Do you think when you’re balancing the art and the science, what do you think has been most successful for you when it’s building that product sense? That’s what I kind of hear with the art piece. I have thoughts on this, but I’m curious for yours.  

Rob Walling:
I think it’s a couple things. I think it is having some type of ideal customer or two or three. I mean, I’ll be honest, with Drip it was, I always thought of bloggers, SaaS, infomarketers as these three buckets and as it went on, and then E-commerce became one, and then bloggers we kind of bailed on because it was like there is not great customers for us, but I had those in my head and I, there was a prototypical one or two of each of those that was a real customer that kind of had you, you know what I mean? And I can name them here, they’re in my head, but I’m not going to name them. And I would think, would they use this? Is this kind of, so I did have personas, but they were just real people I think floating around in my head. 

So that was something, and it was knowing our customers pretty dang well. And then there was this other thing, man, it was like product vision, does this fit with what I want to build? There were times where we got requests to add a CRM to drop a lot, and I remember Derek and I wrestling with this and be like, is that where we want to go? Active campaign has that and Infusionsoft would changes name to keep had that. Is that really the business we’re in? Or do we think we can get to tens of millions of dollars without adding A CRM? Because by the time we had a CRM, we are heading down this dangerous road of we’re going to have two mediocre products attached to each other. I mean inevitably. 

And so that was our vision collectively was like, I don’t think we want to do that. If we do that, we are going all in on that. And then I only want people who need a CRM in drip. I don’t want people who, again, they don’t need A CRM. So would almost be turning our back on them and saying, if you need Drip plus A CRM, then now you’re our ICP. And I never felt like that was the right call. So that’s why tying that vision, product vision of seeing where we want to go and where we want to be in the market and what market we want to be in and who we want to compete with was really the thing. So those are my thoughts. How about you?  

Brendan Fortune:
Well, I think the specificity is so useful that you’re talking through. And I agree a lot of the times, especially early on, the more customers that you talk with deeply, so not just like a random one-off or like, oh, I’ve got one email, but you’ve actually had conversations with them, had lunch with them even or something that’s a little bit deeper. The more you can drive them into your head, the more you develop this product sense. And I think that is a superpower of most founders is if you can be more in touch with your customers, more intimately involved with them, you develop that product sense a whole lot faster than if you’re a product manager, for example, coming into a bigger company that’s just trying to develop that same thing. And that is why I think it’s a little bit easier to develop products that customers love when you are more intimately involved with those customers. 

And it’s because again, your product sense or the art is a little better when you talk about the product vision stuff. What I love about that is there’s a little bit of combo of art and science that’s just really inherent there. The way you were talking through it, you were like, well, we’re going to spread ourselves too thin and quality is part of our vision. We’d rather be best at one thing than okay at two things. And that is more of a, I don’t even know about product sense. Maybe that’s more of a business sense thing developed over trying different ideas, different startups and things like that. But the reason I ask that question is because along my career sometimes I’ve found it really hard to follow exactly what does that mean if I want to develop this art, is that like a nature thing or is that a nurture thing? And I still think it’s a little bit of both, but I think a lot of it is nurture. That’s why the power of curiosity is so great, I think as a product manager or as a founder is because then again, you’ll develop this sense which you need in order to balance making decisions quickly with making the right decisions on priorities. So I basically wholeheartedly agree.  

Rob Walling:
Alright, let’s dive into our third question. Brendan talked a lot about pricing and not leaving money on the table, but what if your competitors pricing does leave money on the table? For example, we charge for user, well, one of our competitors lets you have unlimited users for a fixed price. Ooh, that’s kind of rough. That competitor is probably making a mistake. So the question is how do you compete against that?  

Brendan Fortune:
Yeah, such another great question and I think the core answer, which is a little bit, can be a little bit frustrating, is you want to compete on value, not on price. Okay, so what does value mean? Value is the reason that your customers are paying you. It’s the job that you are helping them perform or just doing entirely for them. And if you can keep the focus on how well you’re going to deliver that value, then you’re going to be able to compete even if the prices don’t match up. So instead of having it be like an apples to apples comparison where it’s just so tempting to go just based on price, you make it an apples versus oranges sort of comparison by focusing on the value of your product. And this really is a psychological exercise which can make it challenging, not a technical one. 

And some questions to think about are what is the sales pitch that earns you customers if you’re talking with someone, but what is the pattern? What is the story that you end up telling where you can see a little light bulb like click oh, now I’m actually interested in this. Now I’m going to lean in a little bit more. So that’s going to get you closer to understanding the value that you’re providing. Same thing with learning from your customers through their feedback about why they stay with you, what are they doing with your product and what are the kind of requests they’re making. All that kind of stuff helps you understand your value and if you can figure out the right story, stories, sell and prices help has been my experience. I’ve even seen really impressive product managers, founders, and certainly salespeople sell future roadmaps over the current value and just blast through some of the pricing conversation. 

Again, it depends on your ICP and how price sensitive they are, but I’ve seen that work really well. Now to this specific question, when you’re doing usage-based pricing, which can be user-based pricing as well, and you’re competing against some sort of all in fixed price, two things come to mind. One, you’re competing against simplicity, which is a hard thing. Customers just being like, I get this. I feel like it’s simple, I feel like I can predict it, but a common way around it and customer I has done this is you start a little bit less expensive than where they’re at with users and maybe that continues for a while as they kind of build up their usage with your product. But if you find a good fit with that customer, you’re going to end up with higher margins, you’re going to end up more expensive. But the difference is you’re going to have proved your value out to the customer and they’re going to be happy to pay for it because they understand the value. Whereas upfront, it’s a little bit harder to do that. So if you can start a little bit cheaper, I think that’s a fair way to compete with someone who is trying to go all in.  

Rob Walling:
Something I like about what you said is basically if you’re undifferentiated, you become a commodity. And if you are a commodity and you are competing on price, good luck. Don’t do that. It’s basically like if you’ve listened to this show for any length of time, I will frequently ask people, especially when I’m challenging them about their product, how are you different? How are you different? How are you different? If you’re the same as anything else, then you compete on price and that’s it. I have a section in my book SaaS Playbook called How Can I Build a Moat? And I talk about network effects of integrations. I talk about building a strong brand. Brand can be bullshit, but frankly, the larger you get, the more it matters, right? When you’re doing 10 million a year and they’re like, I know I’m going to go with customer.io over X, Y, Z competitor because the brand is stronger. 

I talk about a switching costs and some other things. I’m trying to think if I’ve ever competed on price ever with any product, probably some commodity stuff I had years and years ago like pre drip and even pre hit tail because like MicroConf itself, it ticket to MicroConf is more expensive than most startup conferences. But guess what? We sell out every event. Why do you think that is? When someone could buy a ticket for half the price to go to another event because MicroConf has a strong brand, there is trust that we are going to deliver. With Drip, we used to get, oh, you’re 20%, 30% more than MailChimp. And so we would say, great, if MailChimp has what you need, you should go with MailChimp. But guess what they don’t have. We had the whole visual builder, we had all this stuff. If you need this, we are way cheaper than any other competitor. 

And that’s how we positioned ourselves. Even today, TinySeed itself is not the cheapest money that you can raise. And I’ve seen this ad on Instagram, well, it’s being copied by a bunch of things, but it’s for socks or for pens or for whatever. And there’s this one for this sock company and it says, these socks are not cheap because they’re not cheap. It’s not cheap to make a sock that lasts four times longer than cotton. It’s not cheap to create a marina wool that blah, blah, blah. So they’re leaning into why they’re expensive. And so we were batting this around. I like these types of things where it’s like this counterintuitive approach and I put it in the TinySeed team, slack and Alex, who is our program director for the accelerator just wrote this out for TinySeed and he wrote, our funding isn’t cheap because we’re not cheap. 

It’s not cheap to build a program that’s four times longer than the average accelerator. It’s not cheap to create a world-class group of industry leading mentors. It’s not cheap to connect a network of hundreds of SaaS founders through events worldwide. It’s not cheap, but when it comes to your business’ growth, it makes a big difference. That right there is an interesting position. So we do absolutely have people, whether it’s individuals or whether it’s other funds that are paying homage to our model, I wouldn’t say copy, but they’re paying homage to us. They will match or beat our offers, right? It’s like we make an offer and then they’re like, well, obviously I’ll give you a higher valuation because they have to. And yet we win almost all those deals. And why do you think that is? Because we are better, I believe, but because the public thinks we’re better because people who see TinySeed think, man, that is the gold standard or a gold standard like a world-class accelerator. And so the same thing applies to your SaaS, I think is what we’re, that was my long rant on positioning commoditization. This is something founders, I think some founders forget or they don’t pay attention to and they think price is the only factor and it’s not.  

Brendan Fortune:
No, the story is so important. The branding is, yeah, that is the power of the brand.  

Rob Walling:
Moving on to our next question, question number four. I find opinions tend to vary when it comes to how good product managers should be spending their time. Some seem to suggest talking with users is all you should ever do while others spend all their time project managing the engineers and still others interface mostly with marketing any good rules of thumb. So anytime anyone says always or never, I’m like, that’s definitely not the right answer. So if someone says they always talk to you’s just like, yeah, slow down there, or always project managing it is probably a mix. But what’s your take on this?  

Brendan Fortune:
Yeah, this is, I think part of the reason this question will never go away is because where good PMs focus their time changes depending on the projects that they’re working with and more importantly the team or teams that they’re working with. But it doesn’t have to be that complicated. So I do have a rule of thumb for this, which is as a pm I often like to ask, are you aiming or are you executing? And the question is intentionally I guess a little bit ambiguous. Oh, I’m just aiming, oh, I’m just executing. It’s always a little bit of a combo, which is right. But in general, product managers, the unique thing that product managers should be bringing to their teams is prioritization. They should be saying, this is an important problem that is both important for our customers to have solved, and if we solve it, we are going to make more money for it. 

However that happens, that is what product managers are uniquely there to do. So when you’re asking yourself, am I aiming more than executing or the other way around, you want the balance to be more in the favor of aiming than to executing. But aiming does not mean talking to users nonstop. As a matter of fact, that’s a problem. I think if that’s all that you’re doing, because as anyone who’s talked to a lot of customers knows at some point you start just hearing the same thing over and over and over and over again. So it’s not just talking to users, it is synthesizing information from lots of different streams. So some of that is talking to users, some of it is market anecdotes, maybe that’s like a competitor’s marketing or ad or press release or website or something, surveys, business metrics, product analytics and other problems and ideas that you might hear through your team no matter how small your internal team is. 

And synthesizing means sifting through all the noise. There is a lot of noise in any communication and looking for those common themes between what you’re hearing. And this brings me to one of my favorite points, and this is a trap I have fallen into many times myself. When you are synthesizing all of this information that you’re hearing that doesn’t happen alone in your own mind, and I think that’s a common myth. It happens with creatives too. Like authors of books or great musicians or performers, they kind of went off and into their zone, created this amazing art and then shipped it out to the world and it was just perfect right there. It’s rarely the case. And as a pm I think trying to retreat into your own mind, write a lot, maybe do a bunch of diagramming and stuff that rarely is going to help you synthesize. 

Instead what happens where that happens best in my experience is when you’re talking out a theory with another member of your team or a customer. So you’re saying, this is the pattern that I think I’m seeing and here’s why, dah, dah, dah, and then letting some questions come in about that from them and iterating based that input. So trying to have those conversations I think is super, super important. And I’ve got a tool called rock tumbling, which we won’t have time for, but if you’re a bigger customer with a larger PM team, it’s a really cool way to make this happen. One other kind of related point, and this is more for people that are working with product managers, even if it’s just one, I have encountered several times product managers, especially product leaders that will say something to me in a very confident and decisive way, this is the problem, this is the opportunity we need to go after and here’s why. 

And it doesn’t sound like a debate or an opportunity for curiosity. It sounds like an opportunity to fall in line and start taking action. And what I’ve learned time and time again is that a lot of times product managers are incentivized to sound this way because they don’t want to come across as wishy-washy and they want people to feel focused and they have clear direction and clear priorities, but actually they’re making it up kind of on the spot. They just get really, really good at communicating in a way that makes it sound like they’ve got it all figured out even when they don’t. So again, I tie this back to the whole synthesizing thing. It’s really important for any product manager or someone who’s deciding priorities to have conversations with others and get questions and challenges back because that is actually what the product manager or founder need. That’s what everyone needs to make better prioritization decisions. So don’t do it in a vacuum. And even if you do, you are tempted to present it in a confident way, ask for questions even if, does this sound right to you? What part of this doesn’t make sense? Could you repeat it back to me? Even depending on the partners that you have, try to iterate on it and not just steamroll everyone.  

Rob Walling:
That question and your answer actually dovetails nicely into our final question of the day, which is I’ve lately been using a SaaS product called Air Focus for managing our roadmap and user feedback. I like it, but I do like hearing more about how other PMs organize their planning and feedback.  

Brendan Fortune:
I’m going to try and refrain from Hot Takes on this one because I think product roadmap tools are really great and they’re also incredibly dangerous because they incentivize making a process. The goal, like the outcome, like following a process becomes the goal rather than making more durable prioritization decisions. But they do have their use. So what I’ve found is organizing user feedback, whether it’s an air focus or any other tool, there are many of ’em. It’s a great way to synthesize information for maybe the first quarter or two or maybe three when you’re immersing yourself in a new market that very little about or a new area of your product. Like going back to the drip example, if you were to expand into CRM, that might be a time to be a little bit more deliberate and organized with how you process feedback. But after a certain point, and that certain point comes pretty soon, there’s just severely diminishing returns to spending your time categorizing feedback. 

And what I mean by diminishing returns is your prioritization decisions. They don’t tend to get more accurate for all of the work that it takes to be like, I got this email. There are three pieces of feedback. Here’s where I’m going to categorize this. And tools that are around road mapping and organizing feedback often encourage you to go to that level of detail. So what I’d say is it’s more of a time thing. So use Air focus, use any of those tools. At first, I find a spreadsheet is about as good of a job. If it’s just about organizing the feedback, less so about presenting a roadmap visual, which actually brings me to the second point. Roadmaps are a fascinating topic because what the best roadmaps are lagging indicators or outputs of alignment with the team no matter how small that team is or how big the team is. 

So they’re not connections to your user feedback. It shouldn’t be the output of an equation where I’ve, okay, well I’ve got five high paying customers that requested this thing, therefore boom, it’s on the roadmap instead. It’s more about, again, communicating the alignment around this is a business opportunity that I think and members of my team are all in agreement, like in alignment, they’ve challenged it, they’ve had a chance to hear and discuss it. And so the roadmap is kind of inconsequential. It’s just a representation of what we’ve already talked about and decided. And tools like Air Focus, again, sometimes incentivize creating a roadmap document without those conversations because they tie it just directly into your user feedback organization and you can do that. But in my experience, where that tends to work is in organizations where you’re not being challenged and then I point back to my synthesis, you’re probably not going to be making the best prioritization decisions if you are making them in a vacuum just out of that organization. You’re going to make better decisions if you’re forced to build alignment with other people and not defend your decisions necessarily, but at least process them, rock tumble them. That’s the old Steve Jobs analogy of you want to bang them against something hard a little bit because they’ll be smoother. You’re going to get a better output if you allow them to be beaten up a bit. So in a nutshell, tools like Air Focus are great. I’ve never seen one that’s better than another personally, but don’t lean on ’em too heavily would be my recommendation.  

Rob Walling:
And I would be remiss if I did not mention TinySeed company savio@savio.io. Their H one is centralized, organize and prioritize, go to market team product feedback. So folks can also check that out if they are evaluating options. Brendan Fortune been quite the pleasure, man, having you back.  

Brendan Fortune:
Yeah, I love these questions.  

Rob Walling:
It’s a good questions. I know, and there were several others that we didn’t have time to answer today, but really enjoyed having you on the show. Again, folks want to keep up with you. They can search for your name on LinkedIn. We’ll obviously link that up in the show notes. That probably the best spot.  

Brendan Fortune:
Yes. Yep.  

Rob Walling:
Brendan Fortune, just like it sounds. Thanks again for coming on the show, man.  

Brendan Fortune:
Alright, thank you.  

Rob Walling:
Thanks again to Brendan for coming on the show, and thank you for sending in your listener questions, whether you sent in the product focused questions that came for this episode, or you head to startups For the Rest Of Us dot com, click the ask a question link in the top nav. Your questions are what allows this podcast to feel more like a community, more like a living, breathing thing, rather than just me talking on the microphone every week as I’ve done for 15 years. And speaking of that, episode, one of this very podcast came out on March 30th, 2010. This is going live on March 25th, 2025, just a few days off from 15 years of shipping this podcast every week. If you keep listening, I’ll keep recording. This is Rob Walling signing off from episode 767.

Rob Walling:
It’s startups. For the Rest Of Us, I’m Rob Walling. Today I’m joined by four time guest, Stelli fd co-founder of close.com. We have what I consider to be an amazing conversation about their pretty amazing growth being a mostly bootstrapped company to $40 million in a RR. I love talking with Sally because he is so thoughtful, but also very passionate and he and I have known each other for more than 10 years. And so there’s just this kind of common frame of reference and this understanding of each other’s history that allows us to go pretty deep, pretty quick on topics that I think matter to entrepreneurs. It’s a great conversation and I hope you enjoy it. Before we dive into that exit strategy, my new book is available on Amazon and Audible. You can of course go to exit strategy book.com to get the links or go to Amazon or Audible and search for exit strategy by Rob and Sherry Walling. And with that, let’s dive into my conversation with Stelli Stelli fd, welcome back to Startups For the Rest Of Us.  

Steli Efti:
So good to be back.  

Rob Walling:
It’s your fourth appearance. Your last appearance was May of 2020.  

Steli Efti:
Wow.  

Rob Walling:
May of 2020. If that day, the rings a bell with it. And it was something about how to sell during a pandemic and you were doing a lot of tugging about it. I don’t think fondly of those days. Pandemic days. I believe you’re a four time MicroConf speaker. I was trying to recall. It’s always hard to remember.  

Steli Efti:
I think so.  

Rob Walling:
And you’re the founder of close.com, your H one is stop using slow cluttered CRMs. You guys have been in business for, what is it like 13 years? Am I remembering correctly?  

Steli Efti:
Yeah, I think the product has been launched in January, 2013. So 12 years.  

Rob Walling:
And I tend to refer to you as mostly bootstrapped, meaning you raised a little bit of funding early on and then never raised again. Is that still accurate?  

Steli Efti:
Yeah, that’s correct.  

Rob Walling:
Cool. And do you want to give folks an idea of where the business stands today in terms of if you’re willing to share a RR and employee headcount?  

Steli Efti:
Yeah, so we are at 110 people fully remote and over 40 million in revenue. Good  

Rob Walling:
For you, man. Hell of a business. So when people hear this, there’s a good chunk of this audience who will know you. They will know you from this podcast, they’ll know you from MicroConf, and then there’s a chunk who don’t yet. And when I hear someone saying they built a SaaS company over 12 years, I mean it’s kind of SaaS og, right? SaaS was a thing, but I mean that’s a long time. And to also build a business of that magnitude without a bunch of funding, just a high level looking back, has the journey felt, as long as that sounds as 12 years of working on the same project or has it kind of flown by may not be the right word, but have you just day-to-day you execute and suddenly you’re here.  

Steli Efti:
It’s both. This sort of life is a paradox in many ways, and it feels both much longer and much shorter depending on the mood the day. But 

Sometimes I feel so young and then I feel so old and the time spent between those two sensations does no, this have to be that long. So similarly with running a company like this, sometimes things are just flowing and you reflect back and you go, holy shit, this has been a hell of a journey. And it’s been pretty smooth. And then there are moments where there’s trouble and you’re like, how much longer am I going to be doing this? This is too difficult. So it’s like depending on the mood and the day, but it’s definitely been a very gratifying journey for sure. A really amazing journey  

Rob Walling:
I can imagine. Yeah. And do you have one co-founder?  

Steli Efti:
Two, we have three co-founders  

Rob Walling:
And they all, is everyone still working or has  

Steli Efti:
Anything done? Okay, that is probably one of our biggest accomplishments and that probably trickled into a lot of the other things that made close special is that the three of us have been working as co-founders. We did a couple of other things before we ended up pivoting to close. So we’ve been working together as co-founders for 14 years. And I would say that our relationship today is closer than ever before and we are such different people. 14 years, there’s a lot of life that happens. So a lot of moments of crisis where everything pushes you to show up at your worst or to expect the worst or to be a little bit more selfish than you ought to be or see somebody else slack off or be selfish and all these potential for conflicts. And usually these things are the things that sort of break co-founders apart, just like any other very intense relationship. And we’ve been able to work really hard on the relationship and navigate these tricky waters and all three still work at the company and still work very intensely together.  

Rob Walling:
It’s really impressive on a couple fronts. Number one, it’s very unusual to have co-founders who are able to stay together that long, but it’s also really interesting that all three of you have still felt so engaged with the business because usually what happens, even if you have two, and especially with three, at some 0.1 of them is like, well, I have a life change. I have a wife and kids and I want to just move on. Or I have an idea and I’m bored with it. Whatever. There’s reasons we all move on from stuff. And with three people there’s a lot more variable. So it’s really striking that not only are the three of you still as you sit very close, I mean you’re probably really good friends I’d imagine working together that long, but that all three of you still feel like the business is invigorating to you and the best use of your time is really impressive.  

Steli Efti:
I think in reality, just like anything else that you really invest long-term in and any other relationship that goes on for a very long time, you’re going to have ups and downs. It’s not like all ups, no matter how great the end result is or how great the current status of affairs is. There have been times where some of us were less engaged in others. There have been many times that one of us or even all of the three of us were like, what are we even doing with our lives? Is this really what we want to be doing for the rest of our life? We’ve had all kinds of crisis of meaning and all kinds of other things. I think what has kept us together has been a combination of being very honest with each other and trusting that you can be honest and that you can be frustrated or can tell people how you really feel. 

And you don’t have to hide, don’t have to pretend you’re not going to be judged if you say, I’m really stressed out or I am burned out, I’m not feeling that inspired. I don’t know if AKI want to do this. You don’t have to worry that your other two co-founders are not going to conspire with a board to push you out and get your equity or some other thing, right? There’s a tremendous amount of trust. To be honest, I think we were all three quite wise in many times, recognizing that this is an emotional state that I’m in or a face and maybe this is the truth and I should act on it, but I can’t act on it right now. It’s too hot. I need to let it cool down and simmer down. I need to look at it from a number of perspectives and then I can make a good decision, but I shouldn’t just knee jerk act because it’s been a tough couple of weeks or something. 

And I think that more often than not, after we’ve had sort of times of crisis, it went and there was something exciting on the horizon or something engaging on the horizon. And then the other thing is I think that the three of us have built so much of a commitment to each other as well, that also sort of over the years we’ve showed up so much for each other that there’s a sort of a bond that’s very strong and a recognition that yes, maybe there’s a shiny cool co-founder over there that’s flirting with you at a bar about a new AI startup and everything’s going to be simpler and more fun. But usually that’s bullshit. And usually all problems that I have here I’ll take with me in other situations. So why not fix the problem here with people I really trust and really respect instead of just hopping to the next most exciting thing to run away from my problem. So this company’s problems, I think that all three of us have have that which people don’t usually always bring to the table that sort of perspective or little bit of wisdom. And that has saved us, I think, from making decisions that ultimately, I don’t believe that at any point, anything that we thought about of doing that would’ve been more fun or more exciting would’ve been as fulfilling and successful as what we’re currently doing.  

Rob Walling:
It’s a mature perspective for sure. And as you said, a lot of entrepreneurs have this, what do you call it, shiny object syndrome or a DD or grass is greeners on the other side type thing that as you said, maybe it’s, it’s an idea, maybe it’s an opportunity or maybe it’s just frustration or burnout because you do anything for 13 years, 12, 13 years, you hit points of being very unmotivated, uninterested in it. I mean, I’ve been married almost 25 years, I’ve been doing this podcast for almost 15, and I talk about same thing, right? It’s like there are ups when it’s great and there are downs when it’s like, Ooh, this is not going well at all. And I really resonate with the fact that you said, but when it’s not going well, you say, I’m not going to make a permanent solution to a temporary problem, is really what you were saying, A permanent solution is to I’m bailing, right? I’m shutting it down, I’m walking away, I’m selling my shares, or I’m just not going to work on it anymore. And that I think is something that a lot of people don’t have. It’s crazy. It’s maturity and loyalty it sounds like that the three of you have for each other. So it’s really quite striking.  

Steli Efti:
I think honestly, Rob, when I think back at our success, we’ve done some great things at a time, but I think most consistently it’s not been that we’ve been so brilliant that’s gotten us to where we are. It’s been that we have consistently avoided being stupid. It’s that sort of like that Charlie Munger quote of how far you can come in life if you consistently can avoid being stupid. And that’s definitely something that looking back there are very tempting times to be stupid. There’s times where it’s almost impossible not to act stupid as a founder. And in those times, I think that we’ve had the ability to sort of disconnect how we feel and realize that that may be the truth and should be acted on, but it very likely isn’t. So what is the right action is to just hold that emotion or hold that frustration, hold that anger or fear or greed and go, in Germany they say, go pregnant with it. 

Just walk with it a little bit. Just carry it for a couple of days. Talk to a number of people, marinate on it instead of instantly making a decision, especially decisions that can’t be easily reversed where you walk through a door you can’t go back from. And most people will act when they’re overwhelmed with fear, with greed, with whatever it is. That’s why I think a lot of companies don’t reach their potential because they kill themselves. They commit suicide rather than being killed by external forces because they overreact in situations where they should think it through a couple more times before they make a final decision.  

Rob Walling:
I think longevity is underrated, just staying alive and sticking around both in SaaS because as we know, it’s a long slow SaaS ramp of death. And I bet if we went back and traced close your amazing $40 million company now, but after 12 months, do you remember what the revenue was? It probably wasn’t very much.  

Steli Efti:
No, actually our first three years were pretty amazing. I think the first you went, oh, were they? Yeah, yeah, yeah. I think we’re not a good example there, but we came with a lot of unnatural momentum of running this elastic sales sales agency. We had a bit of a name in the market and all that. So the first three years were great, but we had years where growth stalled and we had years where, especially where it seemed that there were a couple of peers that surpassed us, or I even remember at MicroConf in Vegas, meeting a founder and giving him advice, and he was like, whatever. It was 5K an MRR after many years of hustling. And then I was already at whatever it was at the time, 9 billion, 11 million, whatever it was. And then two years later, his company surpasses mine and rocket ships. And if you’re long enough in the market, you’ll meet people that get richer quicker than you. And you’re like, huh, what are we doing wrong? What is going on here?  

Rob Walling:
There’s always something, huh?  

Steli Efti:
There’s always something. Oh  

Rob Walling:
Man, it’s funny. So I feel the same way, right? Let’s talk about this podcast, which is one of the, aside from my marriage is probably the longest thing I’ve done in my life. I guess raising kids is the other thing. I have an 18-year-old, but a lot of this podcast is just showing up 52 weeks a year. I’ve shipped an episode every week since 2010, and some people are like, wow, startups For the Rest Of Us really popular. How can I build something like that? And I’m like, I don’t know how to do it and not do it over 15 years. But then Sam Par, who for my first million, is an unknown kid. I mean, he was very young. He was in his twenties. He sends me an email when I’m in Fresno back in, I was doing Drip, so it must’ve been 2012 or 13. 

I still have the email in my Gmail account and it’s like, Hey, I’m in San Francisco. And he was very broey, but it was super fun. And he’s like, you, I’d like you to come to this meetup or something. I was like, I can’t make it. And then Sam Parr starts a podcast. How old is my first million? Three years, four years. And it’s 10 times the listenership of this. So to me, you, I’m like, oh, what happened? What have I been doing with my life? But then I think I have the success that I want. I have the success that I deserve. I have the success that I should be happy. It’s only through comparison that I have ever found myself not being happy with what I have. I have plenty of my life in terms of my family, my professional success, financial success, this podcast, the audience, whatever you look at, comparison is a thief of joy. That’s the quote. But I feel you that the 5K to surpassing you, it happens.  

Steli Efti:
And there’s a part of me with those examples, these kind of Sam pars people that you mentored and then they have a more successful company than you and all that. I have both joy and pride for them. I’m happy, I want people to be successful, but being somebody that is ambitious, being somebody that poured a lot of hard work into something and is very self-critical, you do go, what the hell am I? This is proof that I suck at this. I’m not good at this. I’m not living up. There’s this idea of full potential, which for most of my life I was chasing and I was like, I just want to grow. I want to live up to my full potential. And I think I’m coming to a stage where maybe out of convenience, maybe out of wisdom, at an old age, I come to this, what is evening? 

If you ask people of their full potential, we have this imaginary idea where if I did everything that I can think of myself doing, possibly, I’m like a superhuman robot. I just do all these things. And that’s not realistic. It’s easy to think of all these things and to actually live them. And when you live them, when you meet people, I’ve met a couple of people that are super successful and very, very well-known and are working harder than I’ve ever worked on to live to that sort of wake up in the morning cold plunge, this, that every minute is strict and you just fly over to this airport, do this event, fly over there, do that. And when I meet them, there’s a part of me now that just, it breaks my heart where I go, wow, they work so hard and they’re still on this treadmill and they’re not any little bit happier or more fulfilled or richer in any substantial way than they were when they were. 

And so there’s a part where you have to sort of realize, well, I’m doing the best I can and let’s see what’s next. Let’s just see what’s next. But there’s also something to be said for just consistently showing up in the business world. It’s just like if you cannot die, if you can just not die while maintaining optimism, fun and curiosity, which is very difficult, people that just survive usually become more cynical and then just surviving or committing suicide. I don’t know what’s better. Maybe you should just exit. If you’re just so miserable, burned out and depressed, just keep going. Maybe it’s not the right advice. But if you can survive while staying positive, curious, and having some fun, you are going to, I mean, you’re already winning, but you are going to, the chances of you eventually breaking out of whatever plateau you are and experiencing massive success are dramatic, dramatic. 

So if you can do something with longevity, if you could just show up day in doubt with a good attitude, with the curiosity and open-mindedness to learn to adjust where you’re not just doing the same thing that doesn’t work forever and pretend it’s working. If you can have that sort of balance of the two, it’s really magical superpower. And I didn’t do my podcast for as long as you, I did a ton of content for many, many years. I’ve been in this space for a long time, but now that I just started doing a bit more content, again, it’s surprising and humbling to get these emails and messages of people that are like, for 10 years I was reading all your stuff and blah, blah. Stelli did this for me with employees. This is a fun little experience that I have now that we are hiring people. 

And for the past couple of years, consistently, people would either be like, oh, I remember watching you or seeing you at MicroConf. And I thought, maybe one day I’ll work for a guy like that, and now I’m at this company or people saying, oh, when I said, when I announced on LinkedIn, I joined Close. I didn’t know about close before. I’d never heard of you before, but when I announced it, I got 15 messages on LinkedIn. Hey, say hi to Stelli. I love this content. They’re like, you’re a big deal. People know about you. And I’m like, I don’t know. I guess putting that much out there and helping that many people and showing up so much, the dividends are just even many, many years later. I can still benefit from that. My business still benefits from that. And same with you. You have such an incredible reputation. 

You had such incredible impact to so many people, and it’s hard sometimes you just look at the numbers, you just look at the download numbers of the YouTube views. And I remember this, he and I had a podcast, the Startup Chat for five years. We did two episodes every week, but we had plateaued for a number of years. It was just X amount of downloads, whatever it was. And then we saw all these other people that did two founders doing a podcast about startup stuff, and some of them were millions of downloads, and there was some frustration in the room. I remember I was frustrated about it, but when I think about it, there were thousands of founders that were listening to our episodes that benefited. There are hundreds, I’ve met hundreds of people. If you put it in a room, it’d be a whole conference of people that I met just from the podcast that told me one way or another, you changed my life. 

That’s a lot. And even meeting one person that tells you that is so moving, it’s like, wow, I really had an impact. I really did something good here. But when it’s thousands and thousands, tens of thousands, it’s a huge number. But we look at count on a YouTube and it’s like 8,000 views or something. You’re like, I’m a failure. I don’t matter totally, but it compounds. If you do it for a long time, I don’t want to rant too much about this. And it will benefit your business and your career in many, many ways and showing up consistently. It’s very, very hard to do emotionally, not to get discouraged, not to get distracted, but if you can, it’s an incredibly powerful unlock of impact and success, and it’s much more fulfilling than just doing some viral thing that gets a bunch of views, but nobody cares. Nobody uses anything that you told them. It doesn’t really make a difference in their lives.  

Rob Walling:
Yeah, no, I fully agree. Obviously, as someone who’s been doing this for a while, the numbers, as you said, I know I have a couple of friends who’ve been doing a podcast for years and they have 2,500 downloads per episode or something, which when I say that, a lot of people think, wow, that’s obviously a failure, but how many of us have 2,500 people listening to every word we say on a show? It’s like, yeah, you can have a lot of impact. And if you have a big impact, even on a small number of people, I still think you’re moving the world, moving it forward. I want to ask you a question about if you ever with CLO had a moment probably with your co-founders where I use this expression. I think Pel said this, Peloni founder of Balsamic said this one time at a MicroConf, but he said he woke up one day and what was it? 

He had deleted the credit card table or they’d been hacked or there was something that happened and he said, well, I guess it’s been a good run. I love that. I guess he literally thought the business was done, and this was years into it, and I had a few of those. I’ve had a few of those over the years. Is there any one of those moment where you guys are after the initial, the first year or whatever you’re trying to survive, but after that, did you ever think, oh man, this is going to tank us?  

Steli Efti:
No, so I don’t have a good story that there were many moments of crisis, right? There were many moments where, I mean, last time we talked, it was just around the pandemic. When it just started, it did raise the question, what will this mean? Is this going to be like, will we survive this? How will we survive this? But there’ve been also many sort of just internal things that happened where we did have fraudulent attacks on a massive scale, but we were lucky to catch it early enough. And it was more of a, once the crisis was averted, it was like a, oh, if we had caught this a couple of days later, it would’ve been game over. We had some moments like that, but never a moment where I thought, this is it. This is it. We’re done. No, it is also a mentality thing, and many founders have this. 

I am much better in a crisis than when things are particularly going well, actually, when things are going really, really well, it’s very hard sometimes to motivate myself or sometimes there’s a guilt, a weird guilt of, I know I’m not working as hard as this success right now. There’s all kind of weird things going on, but when things are going really well, it’s not my happiest time. I’m doing okay. I’m learning to get better at this, but it’s not my happiest time when there’s a big crisis. Not that I don’t enjoy it, I really worry. I have anxiety, I have stress, I fear, but there’s a deep rooted trust that I know I’m showing up and I’m going to weather this crisis. There’s something that just, there’s a voice in my head that says, you’re going to survive this. You’re going to find a solution to this. 

I don’t know where that’s coming from, but it’s always been there. And we’ve gone through enough of these that now it’s over many. I’ve been an entrepreneur for over 20 years, over so many crisis. There’s a very deep rooted, and we had a security issue two years ago, three years ago where something happened, something was exposed. Somebody emailed us about that exposure of something, and there was, it sort of very quickly skyrocketed into almost like panic mode where a couple of engineers looked at it and they’re like, oh my God, we didn’t realize this thing. And they extrapolate it. And even one of the co-founders got sucked into this panic mode. And the problem when I started catching up on the threat as I was reading it, the problem was growing bigger and bigger and bigger. It was really like, this is a huge issue. 

And the proposed sort of like, we have to email every customer right now. We have to do all these very drastic moves. And again, I thought, all right, wait a second. This is not the vibe here. It just doesn’t feel right. Let’s analyze one thing at a time. This person that emailed us, there’s all these insertions in interpretation. So who this person is and what the context is, do we really know? Let’s isolate that. Let’s research who is this person and what is that person’s intent in sending us this information? Then secondly, let’s actually how many customers were really affected by that right now nobody knows. Let’s put a team together where we research what is the security problem, how quickly can we fix it? Let’s put the most resources in just fixing it right now, and then what we communicate and to whom and who we pay money to, and the legal implications. 

We’ll tackle that one team at a time, one thing, but right now we can’t tackle any of this unless we know these other factors. And then we put three or four teams on these different little projects, and a day later we came back with some information that was like, okay, everybody calm down. It’s not as bad as everybody thought. Let’s take another two days to get more answers. And by the end of the week, it was like three customers were maybe affected by probably not, and we send it to a legal team, we send it to a security company. What do we really have to do? Is this really the right evaluation? Everybody came back. Almost nothing has to happen. We fixed the issue. Almost nothing has to happen. Everybody’s protected, everything’s fine. I was like, wow. We were so close to sending an email that would’ve put thousands and thousands of all our customers in panic mode. And then once that cat is out of the back, you can’t put it back in. There’s no way to reverse that. Oops. Yeah.  

Rob Walling:
By the way, remember the email we got the other day? Well, that was said in mistake. So now it’s like, we don’t know what  

Steli Efti:
The fuck we’re doing. Don’t know what fuck we’re doing. Trust us, we told you you can’t trust us, but we figured out you cannot trust us about not trusting us, but you should trust us. And that was so easy. There was such a momentum towards that action. There was such a built momentum, and all it took was one cool head at that time, it was mine. At other times it had been other people’s. I remember when I mentioned to you when we first started in the very first year, we had telephony always enclosed, by the way, inbound and outbounds. You can make calls, receive calls, enc close, you can phone tree with closed everything. And in the beginning we had free trials and we gave people complete free unlimited telephony on the trial, being a bunch of noobs and a startup we’re like, oh, free. Just do as much as you want.  

Rob Walling:
Listeners, don’t do that. Don’t do that. Don’t do that. Yeah. So what happened? I’m waiting for this story. This is building up for me.  

Steli Efti:
So then we were lucky. We were lucky that one of my co-founders out of interest would randomly look at the call logs to just see what kind of interesting calls which countries just out of an interest. And one random weekend was, this is weird. There’s these calls and they’re very long. They’re going on for eight hours. That can’t be right. And then he started digging and figured out, well, they’re calling sort of pay per minute numbers, whatever it is. And it’s like, wait a second. That account is calling 20 of these numbers, and he’s never hanging up. And then started looking into it. And I think he discovered that we had one kind of fraud account that had generated 20, 30,000 in calling costs for us in 48 hours. And we had at that point, no fraud detection. We didn’t have the systems in place to sort of flag that. 

And if it hadn’t been for us, just generally curious, looking around once in a while, we had sort of calculated out that within a week it would’ve bankrupt us. It’s just like we didn’t have enough money. It would’ve bankrupt, and it would’ve been such a sudden death that we would’ve seen it coming. And since then, I mean, we’ve gotten really good at fraud production and we don’t allow people to just make calls. But even since then, I’ve been amazed how consistently and creatively fraudulent scammers would use some scheme to make money with texting or calling or whatever in close or use the email capabilities or any other tool that we have. I’ve been always amazed at the creativity. I’ve always been amazed at how do these people even know we exist? We’re such a small company, especially in the first couple of years, but that was an example of that. We would’ve just gotten $300,000 in calling costs from free accounts, and we didn’t have that much money on a bank account to pay. And that would’ve been it. And if it was me and just the third co-founder, the technical engineer guy, and the sales marketing guy wouldn’t have seen it needed the ops guy that looked under the hood and wandered around to catch that early enough to save the company.  

Rob Walling:
So that’s getting a little lucky in that case. I talk a lot about, I’ll tell founders, Hey, to be successful, you need some combination of hard work, luck and skill. That’s what I believe, whether everyone may or may not agree with it, but I think you have to put up hard work in to do most things that are worthwhile. And I think you have to develop and build some type of skillset to do it. And then sometimes you get really lucky and you need a lot less hard work and skill than other people. But usually, usually, I don’t want to count on luck. I want repeatable things that I can do. I want to start a company with a repeatable approach. That sounds like you guys stayed alive. I know you’ve worked hard over the years. I know each of you have developed skills to be able to grow the company, and sometimes you need to get a little lucky in order to stay alive, it sounds like. 

So I want to ask you about a recent pricing change that you made in January, which was last month as we’re recording this, and you mentioned offline that for years your entry level plan into close was in the 39 40 $9 range. And there were folks, there’s always folks saying, oh, I would use you. This is every SaaS ever. If you were cheaper, I would use you. Right? But you said you’ve gotten a lot of feedback over the years of, hey, if you had whatever, a 15 or $19 plan that for one seat that I would be willing to do it. And so in January you launched this plan, and I believe it’s $19 if you pay monthly and 15 if you pay annually, give or take. So I’m curious to ask a couple of questions. Why did you decide to launch that plan? I’m sure you’ve been hearing the same feedback about having a cheaper plan for 10 or 10 plus years since the day you launched, right? But why do it now and then to find out is that working for you? Do you have enough data to be like, oh, this was a good choice, or is it more cannibalizing your, I guess, your $49 plan?  

Steli Efti:
Yeah, I’ll say a couple of things about that. One is that I think pricing is a much bigger deal in software than I realized for the first couple of years, especially once you get to some level of scale, pricing is really a big driver of growth. And I think that for many, many years, we were just too small up until, whatever it was, two, three years, we were just less than 50 people for most of the company’s history. We’re a very small team, and we just didn’t have people to really work on pricing in a dedicated manner to really do a lot of testing. And I think we always thought about, we were always a little scared to have compete on low prices and get more volume of customers because we’re such a small team and because our more higher ranked pricing always worked really well for the business and for the kind of customers we wanted to attract. 

But there was always this, it was always bumming us out that I would get on a podcast like this one and I would talk about clothes, and then sometimes we did promos about eBooks, other things, and sometimes we told people that We’ll give you a good deal. And then they would come and sign up for clothes and they would say, Hey, I’m a micro entrepreneur. I’m trying out a couple of ideas and I really love clothes, but my ideas are not taking off yet. Or This thing I’m doing is not taking off yet. It’s going to take probably a little longer than I thought. And there’s this competitor product and it’s not as nice as close, but it does do the job and it’s three times cheaper, so I’m going to just switch over there and then once I’m really successful, I’ll come back just, and it’s just always a bummer when people would leave because of that versus the product isn’t working or it’s not working for me. 

Now, you’re right, there’s always going to be people that want cheaper when it’s free, they’re going to complain that you don’t have enough features or you don’t give them enough support is going to end. But only recently have we really felt like, wow, the company’s big enough now where we can make some more investments in the growth of the business into our customer base, sort of grow earlier with them and grow with them, versus being sort of very disciplined about what kind of customer we can really serve. And when we had the internal resources to run experiment to know people can consistently work on something like pricing versus we were always afraid to touch it because we knew once we touch it and change it, nobody here will want to look into it again and have to redo the work of pricing because we’re such a small team and everybody is too much on their plate already, and it’s too early to conclusively say. 

I can tell you that I think two years ago, we packaged our prices and we did a big pricing change, somebody champion at close where the prices were higher and it were packaged number of seeds, and that was a terrible decision for us. And instead of helping with retention and fixing a bunch of problems, it messed with all our metrics. And it took a long time to really admit that and a long time to reverse that. This pricing change is newer, but it’s also less sort of all compounding. It’s just an entry level plan. It doesn’t touch or change everything else that we’re doing. And the instant result is that our customer acquisition is skyrocketing in terms of just how many customers we’re converting. So with a lot more customers, those customers seem to retain a little bit better. Now, what we’re going to have to look at over the next couple of months is do they grow and upgrade and how does that affect all other numbers? 

But we’re pretty excited about it so far, especially as I believe we’re going to see more entrepreneurship. More and more people will start things, try things. We’re going to see more smaller teams accomplish big things in the future. I want the earliest youngest entrepreneur in their journey to come and use clothes and use the power of clothes and not feel like, oh, that’s a solution once we’re sort of enterprise level ready. So I’m psyched about just getting more entrepreneurs and business owners and more small businesses on the platform, and it feels now that we have a scale and a size where we can make these investments, even if it takes a long time for us to pay off,  

Rob Walling:
That makes a lot of sense. Pricing changes always take a long time to figure out, because there’s retention, there’s all these things. It’s not, oh, hey, I got more people or I’m making more revenue in the next 60 days. It really is kind of a long tail. So folks want to check out close, obviously close.com, and I often recommend close.com/guides, which is, I mean, gosh, an extensive collection of sales guides ranging from the ultimate sales pitch deck 12 sales pipeline templates, sales management software tools. The ultimate sales pitch guide is just a lot of eBooks. I know you originally wrote, I think most of them, but I think maybe other people on your team have contributed to those in the recent years.  

Steli Efti:
Maybe the last of, I don’t know even how many there are there, but if you go back to the first 40, they’re all for me and I’m going through them now that I’m back in the content game to revisit my old videos and my old stuff, and most of them still hold up pretty well. I would have to say any advice there on how to sell as a startup, how to negotiate as a startup, how to hire salespeople as a startup, all that stuff is pretty solid. It was timeless, so I’m happy to say, so that stuff should help anyone that is doing a startup and is trying to get customers.  

Rob Walling:
So that’s close.com/guides, and then you have a YouTube show or a podcast, a video podcast, I dunno how you think about it, but it’s called The zero to 30 million Blueprint.  

Steli Efti:
Yeah. Last year people eventually pressured me into our corner at the company and said, you have to get back in the game. People want you, you, let’s revisit how we went from zero to 30 million in revenue, and let’s do a couple of seasons where we sort of break down the different stages. So you can go on YouTube and find the zero to 30 million blueprint, but also just go to Elli on X or Stelli FD on LinkedIn. I’m getting back into the game of publishing a lot of content that’s timely and relevant right now. And as always with people that listen to this podcast, especially, send me an email stelli@close.com if you need advice, if you want feedback. I’ve been a part of the MicroConf community for many years, as you mentioned, and really some incredible stories have come out of it and some great friendships. So I’m always happy to hear from people that listen to the podcast and want to connect or want to get feedback or help.  

Rob Walling:
Amazing. Sally fte, thanks so much for joining me again,  

Steli Efti:
My man. Rob, thank you. It was a pleasure.  

Rob Walling:
Thanks again to Stelli FTE for joining me on the show. And thanks to you for listening this week and every week. This is Rob Walling signing off from episode 766.

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.