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and he recently stepped back from that after doing it for five or six years. He and I kick off our conversation by talking about that thought process. Then, we dive into listener questions, deciding when to quit your day job, anxiety from a second-time founder, and some really good questions on the show today. 

But before we dive into that, I wanted to ask—if you have Spotify—if you could go to the search, type in Startups For the Rest of Us, and leave us a thumbs up or a five-star. I don’t even know what the rating system is. We’ve been getting traction in Spotify, more listeners, starts and listens, engaged listeners, and all the metrics. If you’ve gotten some value from the show over the last months or years, it would take you 30 seconds to do that. I would really appreciate it. With that, let’s dive into my conversation with Derrick Reimer.

You’re back on the show. Derrick Reimer, thanks for joining me.

Derrick: Thanks for having me back.

Rob: This has got to be your sixth or seventh appearance, and you are quite the podcasting veteran now. You have done something that not many people do. You started a successful podcast, ran it for several years, and then made a graceful exit.

Derrick: Retired.

Rob: Yeah, you retired from your own podcast. You had The Art of Product co-hosted with Ben Orenstein. I just want to hear a little more about that before we answer these awesome listener questions we have in the queue. 

Was it a hard decision? You guys had several hundred episodes and five-ish, six-ish years of doing it mostly weekly. I know you don’t shoot every week, but I’m sure that was tough because you had a streak going and you have that feedback and comments of listeners saying, this is great. 

I know the value, rush, dopamine, or whatever that I get from having a podcast. At times when I was at my lowest with it, I definitely considered shutting it down, leaving it, selling it, lighting it on fire, or whatever I was going to do, and I never did. At this point, I don’t regret it because I still enjoy the podcast, but I’m curious what that thought process was for you.

Derrick: I guess I should say I’m technically on a podcast sabbatical, not a retirement because the agreement we made at this point is that I’m taking a break and we’re going to let this be the time away to see if this is something I want to add back in. We’re going to reevaluate in the fall.

It was a tough decision, I would say, but it was one that built up gradually, so it wasn’t a snap decision. As I reflect on what the podcasting journey has been, we started in either late 2016 or early 2017. Ben convinced me to start doing some podcasting with him. At the time, we were at Drip post-acquisition, so I had a little bit more headspace. I wasn’t in the fight-or-flight startup founder mode anymore. We landed the plane, I had a little bit more headspace to do some talking, and I felt like I had some things to say from an aspiring bootstrapper phase to the phase that I had gotten to that point. I felt like this is the right time to try this. 

I always loved podcasts like Bootstrapped Web. I liked the Startups For the Rest of Us intros where you and Mike would give us just a few minutes of updates about what’s going on in your businesses. That was often my favorite part. If it was a tactical episode about something that I didn’t particularly need, I would always show up for at least the updates to see if there’s going to be anything from your journey. 

I was like, what if we just do a podcast of all of that, just try that, and see how that feels? It was good for a long time. I really enjoyed it. It was not always easy going through the level journey where it was a low point in the journey for me but still felt fulfilling to let that be a case study out in public, but at this point, I find myself growing SavvyCal. We’re out of the earliest stages where I feel like you have a lot of good radio whether it’s a lot of vision casting and early stage figuring stuff out. You can pretty much talk about everything because it’s so early. You’re not worried about competition or keeping things secret. You just want to be out there as much as possible. 

Now, I’m in a little bit of a different stage where some of the things that I would want to talk about that’s the best radio, I’m wanting to keep off-air because there’s not much value to sharing it. It’s really mostly valuable to other people in the calendar space. Why would I want to potentially give a shortcut or some learning to potential competitors? I’m not super concerned about that, but it doesn’t feel like there’s much to gain and there’s potentially a little bit to lose from doing that. 

I felt a little bit more constrained in the things I can say on the podcasts and that has definitely made it a little bit less fulfilling for me. I just feel like I’ve stagnated with it. I didn’t get to the place of feeling total burnout, I don’t think, but I felt like I was heading in that direction, so this to me felt like the healthy way to handle it. I’m just saying I’ve been doing this for a long time. Part of me, of course, wants to stay in the seat because I helped start this thing and I don’t want someone else to take the seat, but at the same time, I just have to recognize that I got to look after my own well-being and make sure I don’t start to do something that feels like a treadmill and get burned out on it.

Rob: It’s good to go out while you’re still on top, so to speak, or still liking it, and not go into that burnout phase because I definitely did. I hear you on that. The transparency is cool and helpful to a point, and then pretty much without exception, there’s just a very, very few doing a lot of money—seven or eight figures—who are actually transparent with the real stuff. Some folks give the appearance of transparency, oh, here’s my revenue or whatever, but really what’s going on? You’ll hear someone talk with an employee who left and it’s like, oh, no, it’s so much different than they presented. They’re not actually transparent. They’re kind of market-y transparent. 

I think at a certain point, that can feel disingenuous. I know I felt the same way. I used to talk a lot about Drip and what we were doing inside, do talks, and then some folks stole stuff that I would say from the stage, used it against us, and competed with us. I remember being like, that’s really […], man. That was when I started changing and started talking less about that. There’s that danger.

Also, I hear you on just getting tired. It is hard to have something truly interesting to say week to week because sometimes, in some weeks, interesting stuff doesn’t happen, and then you’re constrained to be like, oh, I guess I’ll talk about some random thing with my espresso machine, or I got this new monitor. That’s fine too, but definitely, I think the truly incredible material that is really engaging is at the start of a lot of these stories and then at that pivot point of, oh, I just sold, we merged, or some big event happens. But that’s the thing about business, there is just a lot of boring stuff in the middle and having something to talk about all the time can be a stretch.

Derrick: Yeah. Especially being a founder who’s like, I’m deep in the trenches right now, so I spend so much of my time just either building products or working on business things. It’s almost like I’ve narrowed my focus to the point where I don’t necessarily have a lot of interesting industry insights. I’m not spending a ton of time on Twitter just thinking about cryptocurrency or the latest trends where I can just opine about that stuff. It’s just not in my nature to be someone who can just flap my lips and talk about whatever for a long time. I don’t think it necessarily makes great radio anyway, so I felt like it would be a stretch for me to try to just fill in the gaps with other things and still be interesting. I don’t think that’s me, so I had to recognize that.

Rob: That’s cool. So it is a sabbatical. I didn’t realize that. That’s a nice test. To be honest, I remember when Ben approached you about starting The Art of Product. You guys had already been co-hosting his prior podcast before then. I thought it was a great idea—it was outside your comfort zone—but it was something you and I talked about. As we were talking about selling Drip, you said, okay, so we work there for a year or two, and then what do I do? Because I’m going to do another one. 

I said, well, we need to work on making you have a more public brand. You need a personal brand to launch something from because you have the chops, experience, and blah, blah, blah. That to me was just right in that plan. It happened to just sink right in with, oh, Derrick’s going to have some more time. 

I loved the idea. I remember that it was a test. It was a trial period where I think he said, well, let’s do it for two months or three months. This is the reverse of that. Let’s try this for two or three months. I’m not going to replace you for now until you decide it’s more permanent.

Derrick: Yeah, exactly. It was super worth it. Definitely the biggest main launching pad for SavvyCal outside of Product Hunt and Twitter was the podcast audience, so it was definitely worth it. At the time, I think I was also toying around with regular blogging. That would have been just way harder to keep up than getting on the mic and talking about whatever we’re doing. I think it was a great, great thing for the time.

Rob: Great. Thanks for diving into that. Now, let’s dive into some listener questions. Our first question is from Vance Lucas, and it is a video question about how to know when you should go full-time on your startup.

We are starting to run low on questions, so if you want to appear on the show as well, head to startupsfortherestofus.com. There’s an Ask a Question link in the top nav. You can ask through audio or video which go to the top of the stack, or you can just send a text question in to questions@startupsfortherestofus.com. Now, Vance.

Vance: Hey, Rob. This is Vance, a longtime listener from Oklahoma City. My question is how do you know when it’s time to go full-time on your business or side project? I’m in a situation where I have a full-time job. I’m the sole provider for my family and kids, and I’ve finally managed to launch a side project which has been pretty successful. 

I’m at about $1600 MRR now, and it’s growing consistently. I’m still not quite at the point where I can go full-time on this. I think that’s a little ways away given tech salaries right now that I’m depending on for my family, so I’m wondering how you would go about making the decision to go full-time, what that would look like for you, and how you guide other people to do that. Appreciate your thoughts. Thanks.

Rob: It’s a good question. It’s a question every one of us who builds on the side has to face eventually. Derrick, what’s your take on this?

Derrick: I’m assuming he’s not asking about whether he should go full-time right now because $1600 MRR is probably not enough for sole income for a family. I’m assuming he’s looking out a little way if (say) this continues to grow a bit, when’s the right time to pull the trigger? I think the answer to that question is really about risk tolerance and your resources.

Rob: Startups For the Rest of Us drinking game in effect. What’s your risk tolerance?

Derrick: Is that one of them? Nice.

Rob: It depends, risk tolerance, or both.

Derrick: There’s going to be a lot of drinks, I think. 

Assuming that he has some amount of runway, whether it’s just money in a personal savings account, an investment account, or whatever, the main question to answer is can you reasonably expect to cross into default alive without depleting that resource too far? 

I’ve been a big fan of Summit, my friend, Matt Wensing. He’s a TinySeed fellow batchmate as well. He’s building a tool that helps you do financial modeling and really any kind of modeling in a way that’s less grueling than an Excel spreadsheet. He has some templates for SaaS in particular. You can just gauge I have this much money in the bank, I have MRR, here’s my churn, and here’s my growth rate. You can visualize your plateaus in there, which is pretty cool.

I would play around in Summit, honestly, and basically do napkin math on different scenarios on how long do you think you can make this savings account last? Is that within your risk tolerance? Is it going to dip low enough where you’re like, okay, if in the worst-case scenario we get below this certain threshold where I’m not comfortable, then you can wait it out a little longer. 

I think putting modeling around it will alleviate a lot of concerns as opposed to saying, well, maybe you’ve got $100,000 in a bank account and that feels like a lot of money, so you’re just going to take the leap. If you do that without doing the napkin math, then you’re always going to have that anxiety in the back of your mind like are we going to make it? Are we going to catch up? That’s probably what I would do.

I can say this because I’m not directly affiliated, but I would consider something like a TinySeed when you have a little bit more traction to also help alleviate the financial concerns in the early stage.

Rob: What’s funny is I should have thought of that myself, but I wasn’t going to say it. It occurred to me, but of course, yeah, if you get to even $1000 MMR, we funded companies that small. Vance, if that’s something of interest, one of the original hypotheses of TinySeed was we see these people in the $2000–$5000 or $2000–$10,000 MRR and they can’t quite get the job, but they can have enough money to where they have more runway and don’t have to worry about it. What we found is that’s actually a minority. Maybe 20%–25% of folks who come in to sign a seat aren’t already working full-time on the company but still, it’s not nothing given that we’ve funded 80-something companies today. That is one option. 

I love your idea. I was going to say model it out too just in a simple spreadsheet, but I always think of Summit as a forecasting SaaS, and in this case, that’s what it would be. It would be a really solid tool to be able to give you an idea of your comfort level. 

If you don’t have any money in the bank—you said if you have $100,000 in the bank, you could map that out—or if you only have $5000 in the bank, then you have to pretty much match your burn right now and match your expenses. You don’t have to make as much as you make from your day job. You just have to make as much as you burn in a month and feel okay that it’s predictable. 

It gets more complicated when you have a spouse or a significant other involved for sure, but I think that’s got to be a conversation of what is her comfort level and what is your comfort level with looking out three months and saying I project growth will be this versus looking out a year. There’s more uncertainty. In a year, I’ll be at $15,000 versus in three months, I’ll be at $5000. It’s just more likely the nearer it is. That’s how I’d be thinking about it.

The other thing I say all the time—I still think this is good advice—is if you go full-time on it and it doesn’t work out, what is the backup plan? What is the worst case? The worst case is you go back and get a job. Under normal circumstances when the economy is booming, that’s a fruit for you as a developer with entrepreneurial experience. That’s a two-week process. You’re going to have your pick of anybody.

Now, I will say there’s a bit of a slowdown, there are layoffs happening, and it’s not terrible yet, but if it gets there, the worst case right now could be worse than it was a year ago. You could be out of work for a bit. I still don’t think the worst case is that bad. That’s how I’d be thinking about it. 

I definitely took a huge pay cut, so to speak, when I left my full-time consulting job because I was making a ton of money, but I didn’t enjoy it. I think I took a 50%+ pay cut when I just said, oh, no, I’m just going to do products. I had some cushion in the bank of $20,000 or $30,000. It wasn’t a huge amount, but I was making enough from recurring revenue that it covered all of our expenses and it was growing each month. 

That’s the other thing that I actually left. It was $8000 a month, the number I needed to hit. When I was at $6500 but I was growing at $500 a month, I was like, that’s three months. I’m out of here. I think I can do it. I think I hit $8000 the next month or something because there was some fortuitous serendipity going on.

It’s a good question, Vance. Risk tolerance and it depends are part of that, but I think as an engineer, if you can map it out somehow and feel some confidence in it, that’ll probably help with the decision. Thanks for that. Hope it’s helpful.

The next question is from Patrick. He says, I’ve spent 15 years consulting in the healthcare software space as a nontechnical implementation manager. As a SaaS founder, I will be able to lead development efforts and can prioritize features if partnered with the right dev firm. 

My question is before shopping for firms, should I know the best front-end and back-end architecture for my SaaS MVP? Meaning should I be shopping for firms who specialize in X, whether that be Python, React, Java, or what have you? 

What do you think about that, Reimer?

Derrick: I would probably think of it this way. When evaluating tech stacks, I would narrow the choices down a bit to a handful of the most popular ones with the most energy behind them. I wouldn’t necessarily pick one especially if you’re not an engineer. You’re not going to be participating in the writing code part of things. I wouldn’t necessarily be super concerned about picking the one best. I don’t think there necessarily is a best one, but I would be looking for a stack that has that momentum, a really thriving ecosystem, and engineers that are working in the stack so you can just find and hire them and not have to train them on something bespoke or something really niche.

Right now in the backend, it’s Ruby on Rails and Laravel. I think there’s still a lot of Python Django out there. I’ll throw Elixir Phoenix out there just because I will say Elixir was voted the number four most loved language on last year’s Stack Overflow Developer Survey. It’s gaining some steam especially from former Rubyists like me. Probably the big three are Rails, Laravel, and Django. There are a ton of shops out there doing any of those, so I would be comparing those against each other.

On the frontend, you’ve got React and Vue as the two dominant front-end frameworks.

Rob: What if I don’t want a front-end framework, Derrick? So many TinySeed companies come to me and say, well, we have a bunch of bugs. I’m always like, well, where is it? It’s this untestable, single-page front-end app. I’m like, why did you do that? Tell me to get off my lawn. Tell me, okay boomer. Go ahead and send an email to questions@startupsfortherestofus.com.

When we built Drip, this was all a big thing. People were doing React and they were doing all the noun.js. I specifically said, all right, do you want to use one of these front-end frameworks? You’re like, it’s going to be Ruby to HTML. What are even the libraries now that we used?

Derrick: We had jQuery in there for sure. We were an app of a certain age, so we had jQuery. There were other lightweight front-end things that we added in that weren’t fully taking over the page. Honestly, this is the structure that I advocate and this is what I use for SavvyCal actually. I have React in the places where I need a lot of reactivity, and then on pages where there’s not a lot, it’s just server-rendered HTML.

I see this pattern actually emerging more and more. Trends are swinging back towards the monolith as what I’m seeing. There are some new libraries and frameworks out there. There’s Hotwire in the Rails world. Phoenix has a thing called Live View. That’s basically replacing a lot of what you would use a heavy JavaScript frontend for and moving it back to the backend, so you’re just sending HTML down over the wire to the frontend, but it’s still super snappy and feels like a single-page app.

One of my big recommendations for anyone starting something new is to stick to a monolithic architecture. I probably wouldn’t start by architecting a fully separated frontend from a backend even though there are a lot of shiny frontend-only frameworks. 

Next.js is a very nice thing, but I have experience in trying to marry it up with a separate backend and putting everything over an API to communicate between the two. That architecture can be good for large teams where you have a whole entire separate dedicated team working on the frontend and the backend and then you have the API layer that’s the contract between the two, but when you’re just starting out trying to build an MVP and iterate fast, that’s a lot to take on, a lot of maintenance. I don’t recommend that. You can always move to that if you need to, but to start out, monoliths are really the way to go.

My two overarching recommendations are stick with popular frameworks on the backend and the front end if you’re going to need any and stick to the monolithic architecture.

Rob: Wise advice. I was going to say Django or Rails because I’m pretty simple and old-school that way. Laravel, I think, is a perfectly viable option as well. We can name 10 other service-add languages, but in startups, we know that those are sellable assets. If it’s written in one of those, we know that those are maintainable. We know you can find developers that are not ridiculously expensive. We know that there are amazing ecosystems around them. 

There are the Ruby gems and the Django packages or whatever they’re called, and there are things like Bullet Trains. It’s starting a SaaS app infrastructure scaffolding. It’s just all this stuff that you get. I’m assuming it’s user auth, billing, login, password reset, and just all that crap you don’t want to write over and over. 

People have done that now in these starter packages. You pay a trivial amount of money, frankly, for them based on how much it would cost you to write them or have someone write them. You start with Rails, you buy a bullet train, and you find an agency who’s willing to work with that, or you start with Django. I forget what it’s called, but there’s something similar like that. That might even be open source. It is a SaaS foundation and some scaffolding. 

I think what both of us would do, Patrick, in your shoes is pick one of those three, or just say, hey, these are the three options so find an agency that does one of those. Thanks for the question, Patrick. I hope that was helpful.

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Our next question is actually one that came through MicroConf Connect which is MicroConf’s online community and Slack channel. This came through probably a month or two ago. I think I was doing a live stream Q&A, and I either didn’t have a chance to answer this question or I remember not having as much time as I wanted to, so I wanted to address it here on the show.

It’s from Carlos in MicroConf Connect. By the way, microconfconnect.com is free. If you want to join, we have more than 3000 mostly bootstrap founders in that channel. It’s a thriving community.

Carlos’ question is, “I’m starting a new SaaS business and despite a successful previous experience, I can’t stop feeling extremely anxious about it. Is this something you’re familiar with? How did you deal with it?”

Derrick, have you ever found yourself exactly in Carlos’ shoes?

Derrick: Never.

Rob: Why don’t you enlighten us with your experience?

Derrick: One, I think it just comes with the territory. There are resources out there. Dr. Sherry Walling’s book, The Entrepreneur’s Guide to Keeping Your Sh*t Together, has a lot of tools in there that you can use to try to balance the mental health aspect because it is quite grueling. I can attest to the fact that even having success under your belt doesn’t make the next rounds really any easier. Things do get easier once you gain that little bit of traction and once you start to feel product-market fit. The anxiety does ease up a bit, generally speaking, but those early days can be really, really tough. I would try to identify the primary sources of that anxiety, name them, and then work towards resolving them.

If you’re concerned, for example, if anyone will buy this, there are things you can do to feel less worried. You can go out there, start trying to drum up conversations with people who are in the market you’ve identified, and have conversations with them. Read The Mom Test so you can learn how to have conversations that are hopefully free of most biases. Test your hypotheses, see whether you are on the right track or not, start to get a picture of what the ideal customer looks like, and keep doing that until you feel reasonably confident that, okay, there are some people who want this thing. I’m not totally on an island here thinking that there’s a problem when there’s really not one.

To the question of building the right features, you can definitely mock things up and show early mock-ups to those people who have expressed interest and get a sense of is this on the right track or not?

A lot of these anxieties you can combat by getting outside of the cave and interfacing with customers or potential customers. That’s not often our first inclination as engineers, I know that for sure, but that stuff can go a really, really long way towards making you feel confident that you’re on the right track.

The other piece is just a mindset. I would try to look at the early phase as truly an experimental phase and try to stay as loosely committed to your existing assumptions as possible so that it becomes less about like, oh, no, am I completely off-base and going to fail, and instead as more like, let me learn as much as possible and try to form the proper assumptions from this. If I’m wrong about something, I’m going to take that as a win because I’ve just learned how to adjust my assumptions. I think that can also help if you break out of the rigid mindset of this is what I think I want to do, this is what I want to build, and if I’m not right out of the gate, then I failed. You’re probably setting yourself up to be really anxious.

Rob: That was great, the last point. Especially what I want to drive home and what I was going to start with is that your second, third, and fourth are still way harder than you remember. They’re way harder than they should be. I remember coming off of HitTail and starting Drip like, I know this. I was not anxious at all because I’m like, I got this dialed, I have the experience, I have the knowledge, I have the money, and I have whatever else you need to make this, the hard work, the luck, and the scale. It’s just going to work.

My reckoning was we built up the launch list, it’s all working, and we launched. Then, it just plateaued, people are bleeding out, and we don’t have product-market fit. I would shout, I should know how to do this. I’m pretty good at this right by now. Shouldn’t I be? Why am I floundering for months and months? 

For me, it wasn’t apparent anxiety, but it was a memory lapse of forgetting how hard this is every time. I’ve talked to Hiten Shah about this. What is he, on his fourth or fifth? He’s had venture and not venture-backed. He’s had things to throw off tens of million a year in profit. He’s one of the most accomplished SaaS founders I know with his most recent effort. We met at a Starbucks when I was in town and we were chatting. He’s like, it’s still so much work. You forget that even when you know what you’re doing and you have “infinity money”—I’m putting words in his mouth at this point—it’s still just a grind to figure it out.

David Cancel, same. I’m not trying to name-drop here. These are (again) some of the most accomplished founders. I believe he’s out there on his fifth or his sixth startup. He’s exited all of them, and they’ve been real exits, not acquirers and stuff. The dude was set for five startups ago. He and I were speaking at an event, and I was talking to him. I was like, David, you raised $10 million out of the gate with no product. He said, yeah. I said, did it make it easier? He said, nope, not at all. He was 1 ½ years or 2 years into Drift, and they were still just grinding and trying to figure out how to make it work.

With David, Hiten, and folks like yourself, we know you’re going to make it work eventually. We know that. But you tend to underestimate how long it’s going to take because if it’s your second, third, or fourth, it’s like, well, certainly, it will be shorter this time. Of course, you have a better network, you have a better audience, you have better people giving you advice to sanity check stuff, you have a better founder gut, you have more resources, and you have all this stuff. I would say it’s definitely not starting over, but it doesn’t put you as far ahead as I think one might think given all those factors.

Carlos, you’re feeling anxiety. I hope Derrick made you feel better, and then I hope I didn’t make you feel worse by basically saying it’s still going to be hard, but I love what you called out, which is to figure out and truly write down the sentences and the reasons that you are feeling worried about, and then figure out how can I address each of them head on? It’s a great question. Thanks for that, Carlos.

The next question is super tactical from Andres. It’s about TLD or top-level domain name choice. 

He says, “Hello, Rob, love the podcast. So many stories, words of advice, Q&As, guests, and founders with the most diverse experience. I’m currently in the pre-launch phase of a SaaS product, and one thing that’s been on my mind a lot is the choice of the product name and the domain name. The latter is much more of a challenge since most of the best .com domains are taken. Many founders go for .io, which is perfectly fine. As the company grows and makes enough revenue, they can afford to purchase .com but have to pay a lot of money, sometimes even in six figures. The URL of my company is very important to me, so I would like to avoid that expense beforehand by choosing a .com domain. What would you suggest: go with a meaningful and expressive name but a less serious tld.io—”his words, not mine”—or with a somewhat fictional name combined with the best tld.com?”

Derrick Reimer, what’s your take?

Derrick: I have split opinions on this because on the one hand, I’m of the mind that the domain does not make or break the business in most cases. Unless you’re being hey.com and you want those three letters, then maybe it’s a big deal. But in most cases, it doesn’t make or break. 

We had getdrip.com. We were called Get Drip forever and it was super annoying, but we made it. 

That being said, I am personally committed to .com for life. I think that’s all to do in the future and that’s definitely what I chose for SavvyCal. 

There’s just a ton of evidence out there—a lot of it anecdotal, some of it more scientific—that suggests that .coms perform better in organic search. It’s just simply the cold standard of TLDs. It’s what people expect. People kind of expect you to be on a .com, especially if you’re interfacing with customers outside of the tech space. That’s where alternative TLDs are still somewhat confusing and hard to remember. I’m a big proponent of just going .com.

Laura Roeder has a really good article about this and it’s effectively how I chose the SavvyCal domain name, although I don’t think I had read this article at that time and then came across it later. It’s called How I Nabbed The .Com for My Bootstrapped Startup, talking about how she got paperbell.com. 

The gist of that article is to set your budget and figure out how much you’re willing to spend in probably hundreds to thousands of dollars. We’re not talking huge amounts of money especially if it’s an available domain name. It may be billed as a premium domain or something, but you shouldn’t have to pay exorbitant amounts of money. 

Then, brainstorm branded words that you would want to include in the name and then run it through a domain name generator. 

I’m a big fan of Lean Domain Search. That’s what I used for SavvyCal. I knew that adding the Cal modifier on the end is something that’s been done before. It’s an established pattern for calendar-based tools, so I just put a search through there and said, give me domains that end with Cal. Then, it gave me hundreds and hundreds and hundreds.

Rob: I remember going through those lists. We’re texting back and forth. I was like, there are some really bad domain names in here.

Derrick: Yeah. Really, really bad ones and then a couple of good ones so you can weed through. I’m a big fan of tools like that because I have the domain or app on my phone. Anytime I think of a domain while I’m out at dinner, I can just pop that open and check to see if it’s available. I used to just try to come up with ideas out of thin air, type them in, and then I always get sad when they’re taken because they probably are.

Use these services that surface domains. I think Lean Domain Search is for only ones that are completely unregistered, but there are other services—I think Laura lists some of them in her article—that are maybe taken but not used, so you can potentially buy it for some negotiated fee from the owner. That’s where the budget comes into play. 

A lot of times, these domains that are just squatted on that are not a single word whatever. You can grab them for $1000–$2000. They’re usually not exorbitant.

I think at this stage in your company, it’s a great opportunity to reverse engineer a name for your brand where you can get the .com, go that route, and just not have to worry about trying to acquire it later or adding on get, use, or whatever on the front if you don’t have to. Again, that’s not the worst case and not the worst thing in the world. Plenty of successful companies have made it with that, but if you can avoid it at all possible, I would recommend it.

Rob: Yeah. I don’t mind the .io, the .co, and the .apps. It used to be .ly although that’s been phased out. I do wonder if .io and .app will eventually be that way or if they’ll stick around, but when I see a startup today with a cool domain name .io, .co, or .app, I think, yeah, I just know that there aren’t that many domain names. There are not that many .coms left. 

Is it as prestigious as .com? No, but if I had the choice of trying to get a crappier .com versus mycompanyname.io or .co, these days, I think I would do my company name. 

You brought up the Get Drip and how people would say yeah, Get Drip is this crazy product. I was like, that’s not what our product is called. 

In fact, one of the big mistakes I made—I have probably told you this—is as we were negotiating the sale, it was after the letter of intent and there was 60-day due diligence or whatever it is we were closing. Clay Collins, the CEO of the acquirer, told me, I want to let you know that I’ve bought drip.co and drip.io, and I paid $2500 for one of them and $3000 for the other. It’s a very low amount. It was a low single-digit thousand.

He says, if the sale doesn’t go through, I will sell them to you for what I paid. I’m not trying to squat your domains, but I want to get them now because I don’t like Get Drip.

I smacked myself in the forehead. I was like, why the […] did I not do that a year or two years ago? It was a few thousand dollars. It wasn’t a costly thing. It hadn’t occurred to me. I remember seeing that drip.com was super expensive. It was six figures. I was like, well, I’m never going to get that. I just didn’t think creatively about getting an almost domain.

Now, what I would say is with that said, I don’t like seeing getyourappname.io or .co because then it’s too many. The .co is not quite the .com, and then you have a get, a let’s, or whatever other prefix or suffix of that. If you’re going to go with a slightly less prestigious TLD, then I would only do it for the exact thing like Paperbell when she got the .com. But if she was paperbell.io, to me, that’s still a domain name. It’s really solid.

Think about it, man, customer.io and close.io now have the .com, but they didn’t need it. Certainly, Customer has been public, and they’re doing tens of millions in ARR. Close, I think, haven’t been public. Let’s just assume it’s tens of millions in ARR. There’s no chance it’s not given their team size and how long they’ve been around in this space they’re in. I do not think the .com would have made that much of a difference to them in their trajectory.

That’s where I am now. Ten years ago, it was different. There were still more .coms available, but these were taken. 

I do love your idea. I think that’s where I would start. If I had an idea today, here’s what we did. The most recent domain name I purchased for a company was TinySeed. Back in late—I guess it was four years ago now—2018, we were trying to figure out names, and eventually, I was like, TinySeed because it’s small and micro and it’s seed funding. The tinyseed.com was taken and tinyseedfund.com was $9, so I registered tinyseedfund.com. That was our original domain name for two months while I tried to buy tinyseed.com. That worked out and I got it for a very small amount. It was a trivial amount of money.

That’s something along the lines of what I would do today. First, I would try to use Lean Domain Search, try to find just a .com, and arrange the company name around it. Then, if I couldn’t, I’d buy a […], whether it’s .co or .io until I could work on maybe hitting the .com

Derrick: I definitely agree with the rules around if you’re going to have an alternative TLD, then make an exact match on the brand. If you have the .com and an established brand that you’re settled on, you may need to add the modifier. Maybe you use it forever, wait until you can afford the .com, or whatever, but that seems like the right move for sure.

Rob: Yeah. I remember basecamphq.com That’s how they started. Teamwork has teamwork.com now, but it was something like getteamwork.com or teamworkhq.com. They got the .com user list recently because I think they were a .io for a while. They paid a few thousand. They were public about this.

Derrick: Yeah, it’s interesting. This is just one data point, but I think Pieter Levels, the Nomad List guy, remarked that he’s gradually buying the .coms for all of his brands, and he’s probably ponying up a bunch of money for it. He was sharing traffic charts for a lot of those properties. When he flipped them over to .com, there was just a noticeable uptick across the board. He has 10 different sites or something.

For me, if I went with the .io, I would always be pining after that .com probably because it’s just the gold standard. If you have that kind of affliction like I do, you might be better served by just reverse engineering the name to get the .com out the gate, but that’s not always a luxury that we can always afford. Start with stalling your business out over.

Rob: Totally. The thing is I think people get analysis paralysis over this. I’ll admit, I have bought five domains in the past two years aftermarket because I wanted the .com and paid in the thousands for all of them. 

One of them was robwalling.com. I didn’t own that before. Another stylish and distinguished gentleman with an amazing name happened to own it, and he was willing to sell it to me. 

I bought startsmall.com because I changed the name of my LLC to that anyway. I talked to some guy who had retired and paid a decent chunk for it, but that to me was a prestige thing. 

As you’re saying, it’s a gold standard. It’s a personal thing. It makes me feel good every time I go to startsmall.com and I see the book. I had startupbook.net. That was the domain for that, which was fine. It was an SEO play.

I get it. I see it both ways. I’m doing this because I’m not super cash-strapped. It’s a little bit of vanity play, not that I want to brag to people, but it actually makes me feel good. 

That’s like having a T-shirt. We have MicroConf and TinySeed T-shirts. Do I think those drive our bottom line and get us more companies and more conference attendees? No, but I really like having T-shirts for my companies.

Derrick: I don’t know man. When I see you walking down the first avenue here in the North Loop, I think you’re a walking billboard for TinySeed.

Rob: Walking billboard, yeah.

All right. Well, sir, if folks want to follow you on Twitter, you are @derrickreimer. We’ll link that up in the show notes, and of course, savvycal.com if they want to see what you’re working on. It’s the calendaring tool that you, me, and all of our cool friends use.

Derrick: Exactly. You can be in my group.

Rob: If you want to be as cool as us, go to savvycal.com. Sign up today.

Thanks again, man. Thanks for coming to the show.

Derrick: Thanks for having me. It’s fun.

Rob: Thanks for showing up for this show every week. I’m doing some traveling over the next couple of months. We have MicroConfs and MicroConf Locals happening. If you head to microconf.com, you can look at our in-person events. It would be amazing to meet up with you. 

We’re heading to cities like Seattle, Atlanta, Austin, Texas, and a few other spots. It’s likely that we’ll be within driving distance of many of you listening, so it’d be amazing to meet up in person.

With that, I’ll sign off from this week’s episode and look forward to being back in your ears again next Tuesday morning.

Sherry: It’s not a sexy topic. It’s not going to help them 10x their business. It’s not going to help them scale. I think reading a good book about grief and being very proficient in the language of difficult things can save your business.

It’s a difficult message, because people don’t want to acknowledge that they’ve been in grief or that they’re going to be in grief. I think most entrepreneurs in particular prefer to live in the reality of what they can accomplish, and what they can push through, and to kind of push these soft or more vulnerable realities to the side.

Rob: In today’s episode of Startups For the Rest of Us, I welcome Dr. Sherry Walling back on the show. We discussed several things including the release of her new book that comes out today. It’s called Touching Two Worlds. You can get it at touchingtwoworlds.com or wherever greater books are sold, Amazon, Barnes & Noble, all the places.

We talked about the hustle of launching something like this, the behind the scenes of how Sherry has hacked her own psychology a bit to ask for favors, and ask for endorsements, and ask for people to help promote the book, even though that’s not something that comes naturally to her.

We talk about the grief of entrepreneurship, the grief of sometimes having to sell your company, fire someone, or having to leave a company that you love and how grief, which is the topic of the book, ties into entrepreneurship. Per usual, there is the witty banter and the verbal sparring that you would come to expect from Sherry and I getting on the microphone together. I hope you enjoy this episode with Dr. Sherry Walling.

Rob: As of a few hours ago, you are now a published author. Congrats.

Sherry: I’ve been a published author for a long time.

Rob: That’s true, let’s talk about that. You self-published your first book, the first book that you and I co-wrote. Now you’re through a publisher. Is there that big of a difference?

Sherry: It’s a different gauntlet to run through. You said, now I’m a published author. One of the most difficult acts of publishing I’ve done is to publish in academic journals. That’s really hard. Compared to that, writing a book is actually not that difficult. Because in academia, there’s this level of scrutiny about every word, every citation, every premise. You have to defend everything.

Self-publishing your own book, of course, like hey, you can say whatever you want. It’s just up to you to do the work to get it in front of people’s eyes. It feels like publishing with a traditional publisher is a little bit of a hybrid of that. There’s more scrutiny, there are different phases of convincing someone that your idea is good, valid, and sellable. Each of them have their own kind of world to navigate.

Rob: Right, and we covered you finding a publisher in the last episode you appeared on. We’ll link that up in the show notes. It was quite the hustle, quite the grind for you to do that. I think you cold emailed, I don’t remember what the number was, 30, 40, 50 publishers. Eventually, you got a connection and got an intro to somebody. The story went from there.

I want to start off by saying if folks are interested in buying your new book that literally came out today, it’s called Touching Two Worlds: A Guide for Finding Hope in the Landscape of Loss. They can head to touchingtwoworlds.com. or they can go to Amazon.

It’s a book about grief. It’s a story of your grief losing your dad and your brother six months apart. But it also, I think, transcends that. We’ll get into it later in this episode about how there’s grief and entrepreneurship in a lot of ways, in selling your company, having to fire someone, and having someone quit in imploding. It’s all around us in this space. We’ll touch on that in a bit.

I think I want to find out. You finally made it to this day after writing the book for 6 plus months, 12 months in editing, then you found a publisher, and then it was like another 18-24. It’s literally years in the making. What does this feel like today? You’re at the starting line of promoting the book, but you’re kind of at the finish line of the hero’s journey in terms of getting it out into the world.

Sherry: I think it will feel really good to hold it in my hands. Like in entrepreneurship, there are lots of starting lines and lots of finishing lines. The publication date is the finish line of all of the process that’s gone into making the book, selling the book, pitching the book, and talking about the book, so that all the people would know about the book the day that it comes out. That feels like a version of a finish line.

Of course, it’s also a starting line. It’s the starting line of this book having a life outside of me, a life out in the world. Hopefully, it’s the starting line to more conversations, more podcast interviews, and this other path of now supporting the book in its next phase.

I think the tricky thing for me, as for many entrepreneurs, is to also acknowledge the finish line on the same day that I’m acknowledging the starting line, to sort of take the win to celebrate that this particular part of the process is complete, while also gearing up and being ready for the next phase.

Rob: Yeah, and I think that’s a really astute way to say it. It’s not uncommon that I will say, building your product and launching, now you’re 20% of the way there or now you are at the starting line of this whole new phase which developers and product people don’t think about, which is, now I have to essentially find people who want it, although really even that is backwards, because as we know you start marketing the day you start coding. You’ve done the same thing.

You started connecting with people promoting the book, setting up podcast interviews, and basically trying to get the word out what was it, six months ago?

Sherry: Oh, at least. Yeah.

Rob: Six to nine months ago for a launch date. Again, folks who haven’t launched something, whether it is a book, a product, a course, or software, they often think that the marketing starts the day you launch. But what have you been doing? We’ve been calling it the hustle. You’ve been hustling on this more than anything since you were an intern at Yale, since you had your postdoc.

Sherry: Not the last book. Anyway, we can debate that another time, but yeah.

Rob: Yeah. You hustled on the last book, but you had other stuff going on. This one in addition to your circus show, in addition to you pulling in all the stops with your entire network to basically get on podcasts and get the word out, it’s something I haven’t seen you do prior.

Sherry: The hustle began last November when I needed to do the first round of hustle, which is to get early endorsers for the book. That was me reaching out to all of the high profile people that I know, people who have an audience, people who have some authority in the world, and asking them if they would review the book. That was quite a hustle.

It’s hard to get the attention of really busy, accomplished people, people who are more accomplished than I am, even then you are, and to get their attention long enough to say, hey, look at this thing, will you give me a quote, can I put your quote in the back of the book, et cetera. That was really the beginning.

From that hustle, all of that reaching out, all of that navigating the process of getting quotes, and talking with people about it, came this sort of beginning of the book launch, which is, what’s the best way to introduce this book to the world? I decided to do a very unusual thing, which is to host a launch event that was based around an original circus show, which used circus artists to tell a piece of the story of the book, but became a thing to invite everyone I know too.

Instead of, hey, here’s my book, will you talk about it, it’s, come to the show, you’ll get a copy of the book, it’s me introducing you to the content of the book in this really unusual way. That was a risky decision, because it was a huge investment of time, of resources, and of attention. I’m really glad that I did it that way, but certainly it was a risky decision.

Following the show, which happened in May, now it’s time to do all of the podcasts, interviews, article pitches, and all the other things that go along with a more traditional book launch. It’s been a pretty long hustle, I would say, beginning last November to now. We’re here in July.

Rob: If folks want to see pictures of that show, it’s transcendent. It was absolutely magical. It’s touchingtwoworlds.com. There’s a circus show link or circus event link in the header. You have pictures of it, and a video, soon, will come out at some point. When you said you reached out to prominent, important people for endorsements, did my email get lost? You think it went to spam?

Sherry: I think I figured you would endorse it. If you weren’t going to endorse it, I didn’t want to have the marital complications.

Rob: Unfortunately, I endorsed this other grief book and it would be a conflict of interest.

Sherry: This other grief book is better.

Rob: Yeah. Cold outreach or even warm, lukewarm outreach is not my favorite thing, not a lot of people’s favorite thing. Does it come naturally for you?

Sherry: It’s terrible for me. I am the least marketing-oriented person who’s this successful entrepreneur that I know, because my work and my way of being in the world is so relational. To have a transactional conversation, I’m terrible at it. I can do it, but I’m not good at it.

The cold outreach was really difficult. I think the thing that helped, if anything helped, was really believing in the story and in the value of the work. If I could take myself out of the equation and feel like, oh, hey, will you do this thing for me? That was really uncomfortable. But I could say to people really with integrity and with good energy to say I wrote this book, and I think it’s actually really helpful. I think it has something important to say, will you take a look at it?

It felt easier to ask on behalf of the book than on behalf of myself, which in parallel, I’ve talked with entrepreneurs about all the time. Whenever they feel like they have to do something difficult, we’d reframe it as doing it in service of their business, not necessarily in service of themselves.

Rob: I think it’s a really good reframe. I know that when I am proud of something I’ve done or that I know, it will actually help people. I’m not a salesperson. I’m not good at sales. I used to do sales demos, they’re awkward. It’s just not a natural mode for me.

When I know that I have the best solution, like, no, I know that Drip is better than XYZ, I know that TinySeed is a better model than XYZ, I know that MicroConf is the best community for bloggers. I’m not selling, I’m just telling my truth, but I’m just telling the truth as I see it. This is truly something that will help people. That’s a really good way to think about it.

Sherry: I think one of the challenges with this book in particular is that I’m selling something that people don’t necessarily know that they need and they don’t want to need. It’s sort of like a hemorrhoid cream or something. It’s like, hey, if you need this, you really need it.

It’s not a sexy topic. It’s not going to help them 10x their business. It’s not going to help them scale. I think reading a good book about grief and being very proficient in the language of difficult things, can save your business. It’s a difficult message, because people don’t want to acknowledge that they’ve been in grief or that they’re going to be in grief.

Both are true. But without it being this stated need, I think most entrepreneurs in particular prefer to live in the reality of what they can accomplish, and what they can push through, and to kind of push these soft or more vulnerable realities to the side.

Rob: I would agree, because that’s kind of my natural reaction to it. It’s like, well, I’m not in grief or I have not lost a loved one in the past six months, so I’m not in grief. But I think you’re thinking about it in the right way of you’ve either been in grief or you will be.

Have you approached that objection, head on, in some of the conversations or some of the outreach you’ve had of like, well, this is why all entrepreneurs need this or all humans it. It’s just focused on entrepreneurial grief, it’s focused on everyone?

Sherry: Right, but of course, the challenge is that so many of the people that I know and are connected to are entrepreneurs. Those are the strings I have to pull. I actually had this really long email correspondence with Andrew Warner, which was really thoughtful about this. No matter what you think of Mixergy, Andrew has been a supporter of mine in a variety of ways for this book and for the last book.

He just kept trying to figure out how to make the topic fit with Mixergy. He was like, I just can’t make it fit, I know it’s important and I value your work. I had kind of a similar conversation with Channing from Indie Hackers, just the sense of like when people come to our site or listen to our podcast, this is not what they’re listening for. This is not what they want as customers.

That’s been discouraging to have people who have a lot of following and have been supporters in the past, say, we believe in you, we believe in this project, but it just doesn’t quite fit with the conversation we’re having. I haven’t found a great marketing workaround to that. I just take people at their word and say, hey, I honor and respect that you are the keeper of your audience, and you have a job to do for them.

No one needs to impose a message that people aren’t looking for. It does make it a little bit more difficult to pitch this book than the other work that I’ve done.

Rob: Right, given the reach you have in this particular space. I do appreciate that’s a very thoughtful response from Andrew to say I support your work, I believe in it, but I just can’t make it fit. It’s an honest response. I get the feeling that Channing at Indie Hackers was the same thing.

Sherry: Absolutely, super thoughtful. Again, it’s such a gift for people to even consider bringing you into their podcasts or into their audience. I don’t take that for granted for a moment as a podcaster myself. I feel very much like the mother bear of people who come on my podcast. If their work doesn’t really fit, then I accept that, for sure.

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You’ve kind of been hacking your own psychology. I’m sure you hate that term, because you’ve been getting up at butt crack of dawn, which may be the normal time you get up anyways. Have you been doing almost Pomodoro sprints, where you’re setting a timer and you’re like, I have to get 20 outreach emails out in this amount of time? You know the terms of BDR and SDR?

Sherry: Yeah.

Rob: You’ve kind of been that for endorsements or like I want to get on a podcast or I want to somehow promote this book and let the world know about it. You want to tell us more about your process?

Again, you said it’s not natural, it’s uncomfortable. There’s a lot of folks listening to this who are going to have to do sales calls, going to have to do cold outreach, or going to have to do marketing that is not natural, not comfortable, but they’re going to have to push through it. I’d love to hear how you figured that out.

Sherry: Yeah, there’s a spreadsheet. There’s a big spreadsheet. Spreadsheets are a little painful for me, I’m just going to be honest. I’m a lot more of an artist, creator, psychologist feeling oriented person. I’m a trained statistician, mind you, but spreadsheets are not my favorite.

I have a big spreadsheet. On the spreadsheet are kind of like every podcast in the world that I think I might potentially want to be on. Every person, not maybe in the world, but all of the professional contacts, personal contacts that I have, they’ve got a line in the spreadsheet. A lot of you listening to this podcast might have a line in my spreadsheet.

In this spreadsheet, I’ve gone through and sort of thought about, what’s the connection with this work? What might I want to ask for? Is it an introduction to someone else? Is it for them to simply buy the book? Is it for them to endorse the book, leave a review, or buy the book for their book group or for their company, or whatever?

I have a wonderful friend named Elizabeth Marshall, who’s really good at helping authors execute on a launch. She has helped me go through the spreadsheet and sort of prioritize in a world of finite time, which folks are most accessible, have the strongest connection to, and might be sort of most responsive to the message.

I’m not trying to do it for everyone. I’m trying to be strategic and manage my sanity and my time. It’s been really helpful to have a third-party conversation with someone who can help me think through how to do the messaging and how to manage the prioritization of who to reach out to. It definitely is a system. Every day, I spend at least an hour simply doing outreach for those lines in the spreadsheet. 

The other challenge, though, is I have the hour where I do the outreach, but then thankfully, sometimes people respond. Carving out the time to then manage those responses thoughtfully and intentionally, it’s definitely like a part time job to launch a book well.

Rob: Yeah, and you are doing essentially a what might be a SaaS sales process, where you have the, I forget if it’s SDR that does the outbound web. The SDR and BDR does outbound, and the other one is inbound. You are essentially doing that outbound. Some of it is warm, some of it is less warm, in terms of cold outreach.

You are essentially fielding and qualifying those folks, or in essence, trying to set up appointments and that kind of stuff. I think if you were doing this constantly ongoing, you would hire pieces of this out. You could have someone email on your behalf because you would have a process. But at this point, you’re kind of custom drafting a lot of these emails based on who they are and what they do.

When I say kind of, I think you’re doing quite a lot of customization, which is probably why this whole podcast tour—this is what I call it,  a podcast tour. It’s like a band going on tour. You want to tour through all of these various podcasts.

Sherry: Yeah, and it is a very interpersonal endeavor. These are personal relationships. Certainly, my mailing list will get an email. Certainly, there are one to many forms of communication that are involved in this process. But a lot of it is one to one, especially to people who are gatekeepers of the many, if that makes sense. They’re connectors, their podcast hosts, they have a big newsletter, or things like that. Nurturing those relationships. 

We’ve talked about before, on this podcast, that there’s so much relationality in all that we do as entrepreneurs. I think I’m just immersed in the relationship management of doing that well.

Rob: Yeah, it comes back to that again and again. The Startups for The Rest of Us drinking game is when everyone has to do a shot when I tell the story about how I didn’t like my co-workers, so then I went to start a company, or I wanted to just be on my own with no attachments, no employees, no co-workers and this and that. Then I realized, oh, it’s not actually that I don’t want to work with people, it’s that I don’t want to work with people I can’t handpick and choose to be in a relationship with. These relationships are super valuable, whether it’s for…

Sherry: Control issues?

Rob: Oh, please. Every entrepreneur has control issues, am I right?

Sherry: Some more than others.

Rob: I am the most easygoing, patient, chill entrepreneur to work with.

Sherry: It’s what your t-shirt says.

Rob: My t-shirt says, I with stupid, is what it says.

Sherry: Wait, that seems like it’s insulting to me. Am I beside you in that story? What?

Rob: Moving on. We really haven’t talked much about what’s in the actual book. I gave kind of a broad overview of it, but how would you describe it to someone who’s thinking like, well, I may want to buy this book and have it, I may want to gift it to someone that I know who has gone through grief or is going through grief? What’s in those 200, 300 pages?

Sherry: The broad framing of the story of the book is that my dad was diagnosed with esophageal cancer right at the same time that my brother took a very significant deep dive into mental illness and addiction. Essentially, there was a two-year period of watching them both implode, and they both died. My dad died of cancer, my brother died by suicide. It’s the story of all of these moments of watching this process unfold.

Some of the moments are really funny. There’s this moment of me standing in Target trying to figure out which sheets to buy for the bed that my dad is going to die in and just the surreal nature of that process. I tell it in a way that is quite light-hearted. Then there are much more serious moments, like calling my mother after my brother’s suicide attempt and trying to navigate that.

The book is framed as a bunch of very short stories or small essays that all have an analysis portion, where I’m thinking as a psychologist around what worked about my experience, what didn’t, and what I would recommend to others. More than a memoir, it’s also a very tactical book, as much as you can be tactical with grief.

There are journaling practices, there are breathing exercises, there are letter writing practices, there are things to do with these big feelings. Then I’m sort of representing how I engage those practices in my own life. It’s a little bit of a show and tell kind of process.

Rob: Yeah. When I read an early draft of it, you had sent me a Google Doc, literally, probably a couple years ago now. I was struck by how well-written it is. I know you’re a good writer, but it flows so well, and it’s so engaging. I remember thinking, we’ve just lived through this. Do I want to read about it again?

You told it in stories and anecdotes that some of which I was present for and knew about it more than others. I didn’t know about you going to Target or whatever to try to buy those sheets. Dare I say it’s entertaining in the way that it’s heart wrenching but it’s also entertaining. It’s funny, but it’s also sad. It’s real, but it’s also jovial. There is a lot to it.

I guess, I don’t know that I’ve ever read a book about grief. I don’t know that I’ve ever bought one or that I would have had a need to, but this was so helpful for me to hear from you, even though we’re married. But to hear from you as a psychologist trying to deal with your own grief, it was a nice framing of it for me of A, this is how it feels and B, these are ways to to deal with it. Not even just the tactical things, but the humor. You put humor in there and that’s it, and we forget that.

I remember when my grandmother passed away and you and I went to Las Vegas to her funeral, Finn was our oldest, and our oldest son who’s now 16, I’m guessing, was he 2 or 3?

Sherry: He was 2. Yeah.

Rob: Yeah, super precocious, huge vocabulary. I remember, everyone was kind of somber and he would make these jokes. He’s been like, well, intuitively, I will have that snack or something. I was just like, oh, my gosh, this is so stressful because he’s going against the mood, but everyone there loved it.

It was this light, this humor, and this new life because he’s a young kid. He brought a level of sunshine on this dark moment. I feel like there are many points in your book where I felt that way too of like, okay, this is how I want to view grief as I’m going through it in the future.

Sherry: The book is called Touching Two Worlds to speak to that duality. On one hand, against my will, against my choosing, we both entered this phase of life of lots of darkness, of pain and suffering, and people getting really sick and just sort of falling apart in front of us.

On the other hand, you and I, since you were in this story, too, were both also experiencing flourishing careers, beautiful children, and a tremendous amount of joy. I think the message of my book, if anything, is the ability to navigate back and forth between both, because both are real and both happened to us.

I think a lot of people fear going toward the grief, because they feel like they’re going to get stuck there. They feel like it will be too uncomfortable or they don’t know how to navigate it. But I think it’s only in entering that phase of sort of the shadow that you could really experience the fullness of the other side of the lightness, of the joy, of the playfulness, of the delight.

I think introducing that duality, there’s humor, there’s growth, there’s flourishing, there’s joy, all at the same time. To be present to both worlds, to be able to be comfortable in both, is what’s, I think, essential for us to become the fullness of who we are.

I guess I do feel like the book is particularly relevant to entrepreneurs. It’s not written for entrepreneurs, but entrepreneurs, as a group, get the high highs and the low lows. We kind of live there anyway. I think my experience of grief has been very much informed by my life as an entrepreneur, and the fact that I spend all of my time with entrepreneurs, and the need for them to be able to navigate back and forth between the good and the bad that happens sometimes in really quick succession. I think that has been helpful for me to meditate on. 

The book, I will say, I will echo you, it’s really well-written. I’ve not really had the opportunity and all of the writing that I’ve done to bring my full self to the story. It’s a very personal book. It’s very poetic. There’s a lot of my heart in it. There’s also a lot of my mind, wisdom, and learning. To be able to be part of a project that feels fully me, like drawing on all the resources that I’ve accumulated over my almost 44 years on the planet, that feels so satisfying.

Rob: You should be super proud of it, because it’s one of the best books I’ve read in years in terms of keeping me interested and not because I was part of the story. I’m a very peripheral part, I think I mentioned a couple times, but that’s not why. It’s not why I know this story. It’s just something that’s so compelling and well-told, even though it was off the beaten path for me.

There are times when I stumbled upon an Audible book or a Kindle book for that matter. But I just do a lot of audio, where someone really recommends it to me, and I’m like, this doesn’t seem like something that is going to resonate with me. Then I start listening and I couldn’t stop. That’s how this book was for me. Although I was reading it as a Google Doc, you have it as a paperback, Kindle, Audible.

Sherry: Audiobook.

Rob: Audiobook that you read.

Sherry: Into the big studio.

Rob: Yeah. Folks can really consume it in any way they want to. I hope that folks listening to this, whether they feel like they want to read a book about grief or not, I…

Sherry: It’s like the grief book you don’t know that you need. But honestly, this is the psychologist in me, this is not the marketer. It’s nice to just have one on hand if you need it or if there’s a loss and you need to give a gift that feels thoughtful. I think I also sort of wrote it for the intention of having that go-to resource to give to someone when they’re in the midst of grief, and you don’t know what to say. You can sort of, oh, hey, here’s some thoughts that might be helpful to you.

Rob: Yeah, I would agree with that. So touchingtwoworlds.com. If folks want to find out more, obviously, they can buy on Amazon, Barnes & Noble, Audible, wherever greater books are sold.

You are @sherrywalling on Twitter, if folks want to keep up with you. Of course, the Zen Founder Podcast, where you have several hundred episodes of stuff talking about entrepreneurship, mental health, startups, family, and life. Thanks for joining me on the show.

Sherry: Amazing. Thanks for having me.

Rob: Thanks again to Sherry for coming on the show. If you feel like she’s given you some value over the years, whether through this podcast or her podcast, Zen Founder, it’d be amazing if you could head to touchingtwoworlds.com or amazon.com, barnesandnoble.com, audible.com, wherever you go to buy books, and pick up a copy of Touching Two Worlds. Thanks for listening to this and every week. This is Rob Walling signing off from Episode 613.

Rob: Welcome back to Startups For the Rest of Us. I’m Rob Walling. Today, I talked with longtime friend and friend of the show, Dave Rodenbaugh. We talked about both of our experiences, balancing a side project with our day jobs. We talked about that feeling of finally being independent.

Dave has been independent from consulting for about a year. We talked through what was surprising for him and not, and I share the same thing. This is a very much more collaborative conversation than an interview.

Since Dave and I have known each other for more than a decade now, he actually attended MicroConf 2011, the very first one. He’s one of the handful of folks that are still around in this community who’ve been going to MicroConfs for more than 11 years now. Since he and I know each other so well, the conversation flows.

I feel like it’s candid. We give some authentic thoughts on what it takes, or at least in our experience, what it took working nights and weekends balancing that side project with a day job, and eventually struggling with the decision in our own different ways of when to quit that consulting work or when to quit that day job when you may have a significant other and or a mortgage and kids. With that, let’s dive right into my conversation with Dave Rodenbaugh.

Dave, thanks for joining me on the show.

Dave: Thank you so much for having me. Always an honor and a pleasure to be on the pod here and chat with you, my friend.

Rob: It has been a while. We were actually looking through the archives trying to figure out how long that while has been. It’s just an indeterminate amount of years—six, seven, eight. Folks might know you as a co-host of the Rogue Startups Podcast with Craig Hewitt, founder of Castos. He’s been on the pod many times.

You run Recapture.io, which is ecommerce, email marketing software. It started as cart abandonment, but you have expanded into email marketing. What was the thought process behind making that move?

Dave: It was very much a land and expand strategy, both horizontally and vertically. When I saw Recapture for sale back in 2016, it was Magento only, abandoned carts, and one other feature at that point. I think it was review reminders and it had pop-ups too, so three things.

As soon as I saw that, I looked at the competitive landscape, I looked at the possibilities for places you could go, and it was pretty obvious. You can expand in both directions based on customer interests, customer demand.

As we started acquiring more customers, as we started going to different platforms, the drumbeat got louder and louder. Hey, do you do this? Hey, can you do this too? Hey, I bought this other thing that I expect on other email marketing platforms and ecommerce. I’m like, okay, great. Yes, I can do that, and I’ll charge you more for it. It works well to grow the business, it works well to make the customers happy.

Rob: Right. That’s kind of moving from micro-SaaS, which I typically define as almost a single feature with a single traffic channel, usually. Expanding from there is where you build the rest of the features, because just doing cart abandonment, you are a feature that Klaviyo has, that Drip has, or that MailChimp, any number of other tools have in addition to all this other stuff. You have dove headfirst into competitive waters for sure.

Dave: Yes, shark-infested, if you will.

Rob: Indeed, but it’s going well. Can you update folks on whatever metric you’d like to throw out, team size, progress, number of customers, revenue? Just give us some idea of where you’re at with it.

Dave: Sure. Since I bought Recapture six years ago, we’ve more than 10X the business at this point. The team was originally just me. Now it’s tripled, so there are three of us that are working on it in a dedicated more or less full-time way. We all have kind of an employee relationship at this point, so I would say we’re a real company, I guess.

Rob: You’re a team, yeah. Not just a group of contractors.

Dave: Right. In terms of customers, we’re on our way to 7000 installed customers across all different platforms out there. A significant number of those are paid. It’s grown in all the right directions. It’s come with a lot of growing pains too, like trying to figure out you’re in this competitive landscape. What does that mean? How do you carve out something that says, if you are in this part of the Venn diagram, you are perfect for our tool.

It took me a long time to really define that, articulate it, and then really start to promote it. But it’s gone well, so I’m quite happy with having been on Recapture. I went full-time a little over a year ago at this point. That was one of the milestones that I had been dying to hit for 11 years. To finally get there is huge.

Rob: I feel like I busted your chops at least once every year or two, usually at MicroConf. I would be like, Dave, you have all these products, because you had other products in addition to Recapture. You kind of had the portfolio approach, the bootstrapper portfolio.

I know what your total revenue was. Your day job was consulting and I was like, you can quit consulting, you need to quit consulting. This was me in 2015, probably 2016. You just kept doing it. You’re like, it’s just so lucrative, though. I have this day job. I’m like, yeah, but you’re grinding. Don’t do all this, just go full in.

You did finally basically go independent and worked for yourself. Your focus on Recapture is about a year ago. That’s our first topic. Just so folks know, this is more of a conversation than an interview. I’ll ask you a few questions, but I also will weigh in with my own experience on some of these questions.

You especially waited a longer time than most bootstrappers to go all in on your products. What was that decision like? What finally made it click where you were like, I’m doing this after all that time?

Dave: Oh, gosh. That’s a decade worth. Let’s see if I can condense that down into something that is less than War and Peace. You talked about those WordPress products. The problem I had with those WordPress products was the whole portfolio approach ended up with me kind of scattered in three different areas—two of which were kind of related and one of which was not.

The two WordPress plugins that I had were a directory plugin and a classified plugin. I had built those a long time ago. They were lucrative, but they had plateaued. That’s problem number one. I got them to a point where I was having trouble pushing them forward more than where they were at. They had definitely kind of hit a place where I was like, I’m stuck.

I let them kind of just sit there stuck for a while, because I was also freelancing at the time. None of those were actually a SaaS, so the recurring component of those was not nearly as strong as it needed to be. I think my renewal rates were somewhere between 26% and 33%, depending on the year and depending on what experiments I was running, things I tried, and so on and so forth, which is not great.

If you’re churning out 66% of your customers in a year’s time, that’s a pretty hefty churn rate, and definitely it’s difficult to make it a sustainable business. In the back of my mind, I was like, I got to do something with these because I built them up and I should get some kind of reward for that work, but it was clearly not the end game. That’s why I was looking at Recapture. I was trying to find a SaaS, and eventually, I found Recapture. That one was like, oh.

Rob: You wanted that recurring revenue to feel safe?

Dave: Yeah, it was the safety thing. That’s why it took so long. I never felt like I had the safety to say it’s okay to quit and that everything will be okay. It never felt like that until I got to Recapture, and then I had to get Recapture to a certain level.

That certain level was about 80% of my freelancer income, which you and I had conversations about that. I know you had talked about a similar kind of level when you were doing HitTail and even before when you had bought all those little microsites and AdSense stuff, et cetera.

They never quite made it all to that level. It was only when you got to HitTail and then later Drip that you were like, all right, all in now, I’m totally in it to win it. That’s kind of where it ended up with Recapture.

Rob: I went full time on products before I had a ton of recurring revenue. But the revenue, it was one time sale and I had a couple ebook sites, as you said, some AdSense stuff, and there were software. There was one SaaS, but it was wedding websites. It’s basically B2C, in essence, because it’s consumers buying.

I had my book and I had other stuff, but none of it was as recurring as SaaS or as predictable. Even if it was recurring revenue, the Micropreneur Academy, which is kind of the online training course, the turn of that was also quite high, because it’s going after the freelancers, indie hackers, who are trying to move into entrepreneurship.

I was so desperate. I so despised working for other people that I was willing to take a bit of a risk. For me, it was December 2008, maybe January 2009. I always forget. Right around that time was when I took the plunge. Similar to you, I was making boatloads of money consulting. It’s 2008 money and it was $20,000–$25,000 a month.

I remember quitting my day job or quitting that, basically winding down a project once my products had hit about $8000 or $9000 a month. It was a lot less, but we didn’t need any more than that to live on. It was just Sherry and I, one child at the time we were in—were we in New Haven, Connecticut or Boston? Yeah, we had an apartment or a townhouse but not… One’s lifestyle tends to expand as they get older, have more kids, and do more things.

Certainly, I couldn’t live on that now given our lifestyle. But for me, there was such a motivation to get that freedom that I was willing (I think) to take a bit more risk than other entrepreneurs do. 

I remember Dave, you talked on Rogue Startups at one point, that when you were younger, was it your dad who started a business and it failed, or at some point you were really low on money or something, and entrepreneurship within that. I think there was a scarring almost.

Dave: The exact event was that my father got laid off when he was pretty close to my age now. I think he was 57, and I’m 52. When that happened, the timing was really terrible. It was my junior year in high school. We’re preparing for college.

There were house expenses and some other things that were going on. Previously, there had been some investments that went way south, like a CPA basically absconded with money from a bunch of different people, not just my father. The timing was scarring. It was a little scar, some financial trauma.

He couldn’t get another job after that. That was the hard part. That was the hardest thing to see. He sank into depression. He put all this effort into it and just was getting nothing back. It was straight up ageism.

I saw that, and it was always sticking in the back of my mind as I was working for the first 10 years. I’m like, what happens when I’m 50? What happens when I’m in my 40s?

Of course, tech is famous for ageism. I was in my late 30s and I’m like, I need an exit plan here and it needs to be something that I control, not somebody else. The main motivator was to really find something, make it mine, make it big enough, and make it something that I felt I could be proud of, sustain, and carry on when it was ready.

Rob: And that’s where entrepreneurship at the point where you’re at, I would say, is less risky than a day job because you are more in control. You are more in control of not directly in everything but how much money you make, how hard you work, whether you are fired for some random reason, whether you’re laid off because some CEO made a bad decision about XYZ and has to weigh the money when they hit a downturn. I think there’s just a lot more control.

I would say entrepreneurship in the early days is more risky because it’s super uncertain. Dave in 2010 as an entrepreneur, much riskier, but now you have the experience. You have a business that’s generating revenue. 

I bring up that story about your dad or really it’s your childhood, because I want people listening to realize I was willing to take some risk, but it was calculated risk. I knew I could go back and start consulting or get a job if things tanked. Even though it’s 2008–2009, I knew that I had clients, I had people who wanted to pay me to write code. The risk to me was that I had to go back and get a day job, in essence. 

I was so not liking it. I was so burned out on all that stuff. I’m just working for the people that I was willing to take the risk. But you, you listened to your own psychology. You listened to your own experience. It took you longer to get there, but that’s okay, too. We bootstrapped so we can be in control of these decisions.

Dave: Yeah. Like you said, you kept badgering me all the time. Psychologically, it wasn’t until things got so bad at my freelancing that I finally was able to take a look and say, can I actually do this now? Prior to that, I was doing some dumb things. I wasn’t monitoring my P&L as closely as I should have with Recapture. I was doing it once or twice a year. That’s bad. Don’t ever do that.

If you have a business, please, for the love of God, get your books in order every month. Have that showing up on your email or something. Do them yourself, hire somebody else to do it. I don’t care. It’s so important that you know that information all the time.

I didn’t, and I was making bad decisions because of it. But as a result of the anxiety attack, I basically suffered at my freelance client because things got so bad. I had to put the P&L together under duress to find out, can I get out of here because I need an exit plan right now? That’s what ultimately motivated it. It took me longer to get there. Similar path, maybe a bit longer.

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You’ve been on your own, in essence, for a year. I’d love to hear from you. What’s been surprising about that and what hasn’t been? Or if there have been things that are not surprising.

Dave: I would say the most surprising thing to me is how long it took me to kind of unlearn all of the ingrained habits that I had from working from somebody else. About the feeling of, oh, my God, it’s 8:00. I need to be sitting at my desk. Oh, my God, it’s 5:00. I should get the hell out of here. During that day, like, oh, I have to be here for all of these things. None of that is true anymore.

For me to suddenly be able to say, oh, my wife, Tracy and I now take Friday mornings off and we spend time together. It took me probably about four months to feel okay about that. It stressed me out when she would ask me that. Then we sat down and had a conversation, and I’m like, why am I stressed about this? She’s like, I don’t know, why are you stressed about this?

I kind of unpacked it like, I’m treating this in the same way I was treating my freelance client. I own my time. I own my flexibility here. If I’m not taking advantage of it, why did I do this? That was an eye-opening moment for me, a very surprising thing to say, my schedule is my own.

If I want to work till 4:00, great. If I want to start at 10:00, great. If I want to work at 7:00 at night, great. As long as it works for the family, as long as it works for me, as long as we’re getting stuff done and we’re moving the business forward, it’s all okay. Getting to that okay took me longer than I thought.

There might be a little PTSD from my freelance client, where it turned really toxic there in the last 12 months. Yeah, it was kind of an unlearning experience, and letting that tension go, and feeling okay with where I was suddenly at. That was the most surprising part.

Rob: I felt that 100%. That might be my most surprising as well, so I’m glad you said it. I remember that I was so hung up, because I was billing hourly. When you’re a contractor consultant, I would bill hourly. If I wasn’t working, I wasn’t getting paid. I didn’t have vacation days, didn’t have sick days. But it was fine, because I didn’t take a lot of vacation and didn’t get sick very often. And that you can make a lot of money. 

But I got it so in my head that one hour equals money, that once I didn’t have that, I remember telling Sherry, we’re taking a week vacation, so I need to figure out how to work 40 hours out of the week before. In addition to the normal week, I need to work an additional 40 hours out of the week before or the week after.

She was like, why? I was like, well, because that’s what you do, because you work 40 hours every week. She’s like, no, not anymore. I couldn’t do it. It took me several months to do what you did, which was to kind of unwind it. It probably took me a couple of years to not still feel guilty when I did it, when I would wake up, get the kids to whatever daycare preschool.

I would go to Starbucks or I would go to Barnes and Noble. I would look through books, I’d drink some coffee at the cafe, and I would just not work even though (of course) I’m looking at business books and I’m thinking about marketing. I pretty much am working all the time, but I wasn’t actually sitting there pounding the keyboard. I would have this amazing sense of guilt that I was letting the family down or that I wasn’t growing the business as quickly as I should be.

It’s not a good thing. I talked about relentless execution, which we might have time to touch on a little later on. I think that’s such a strength, but that’s the dark side of it. That’s the other side of that coin, is the need to relentlessly execute, the inability to unwind, chill the […] out, and enjoy your life, instead of constantly feeling this guilt and pressure to sit in front of your computer.

Dave: That is super unhealthy. I find myself still doing that today. Here we are 13 months in, and there are days that it’s been a terrible afternoon, I’m […] productivity, and I still feel somewhat compelled to keep going. But now, I will actually realize that I’m at that point where the productivity is not where it should be. I’m like, all right, I’m done. I’m just going to go do something else.

If I still feel like I have to do something, I will try to do family productive stuff. Maybe it’ll be like catch up on the finances to do the bills, or go do some chores around the house, or something so I don’t feel like I’ve wasted the time, but at the same time, I’m not sitting here wasting time in front of the keyboard not doing anything that should move the business forward.

Now I realized that there are windows of productivity. Those are what I need to protect, enjoy, and take advantage of. When it goes—and it always goes, it never stays, your flow state is not infinite—then it’s okay. Let it go. Plan for that somehow. That’s the hard part. I’m still struggling with that today.

Rob: I think a big surprise for me, separate from that one that we just talked about, was that I felt an immense sense of relief and happiness to be finally be working truly for myself, not having clients, not having a boss. That stayed with me. 

But what started creeping in was the arrival fallacy. It’s that I became gradually unhappy over the next 6–12 months, because (I think) as humans, that’s what we do. We figure out how to be unhappy with whatever mountain we climb. It’s like, oh, there’s another one over there and it’s higher.

For me, it was a boredom. I have all these autopilot. Basically, I didn’t have the four-hour–workweek. I had about the 10-, 12-hour–workweek, and I was making a full time living—$100,000–$150,000 at the time—but I got super bored. Is this it for me? I’m going to do this for 20 years? I’m more ambitious and this is what I started realizing.

I was surprised, and I stopped being surprised. This happened to me several times when I left full time employment to become a consultant, freelancer. When I started working from home, each of these things were things I’ve always wanted to do. I did them and I was happy with them for a few months until I wasn’t. This was another step.

This was one of the later ones where I was still surprised by it. Because then the next step after that, I’m like, oh, I want a recurring revenue SaaS app that does $30,000 a month, then I’ll be happy. I remember being that, which is what HitTail became. I remember being like, dude, you’re going to be happy for about six months.

At least I learned from it as I got older. But at that time, it was still surprising to me that it didn’t just solve all my problems, make my worries go away, and make me happy for the rest of my life.

Dave: Those things that you just talked about there, I’m constantly haunted by Dan Pink’s Drive—autonomy, mastery, and purpose. I’ve never gotten to a point where I’m like, okay, I’m happy, and none of those three things are present. The problem is that when you get happy with those three things, you will eventually also get bored because you’re no longer doing those three things.

Your purpose will change, wanes over time, or you’ve achieved mastery. Now, what? You may have autonomy already, great. But when you aren’t changing that mastery and finding something new to learn, or your purpose just isn’t there anymore, you’ve automated the crap out of it, what’s your purpose? Those things make me bored, too.

I worry about that a lot. In fact, with all the frothiness that’s going on in the M&A market and PE firms just getting stupid with throwing money around left and right, buying companies up willy-nilly, I’ve entertained, could I sell Recapture? Oh, yes. I could do that, but what would I do then?

I know that that’s an important question. If I don’t answer that question before I do the other question, then I’m going to be in huge, huge trouble. Because the times that I have sold things, it’s been when I had something else to jump to like, oh, I’m selling the plugins, but I’ve got Recapture to focus on. Oh, I’ve sold these other tiny businesses well, but I’ve got the plugins to focus on or something like that.

I don’t have something else. That lack of purpose says, then I’m not done with this yet. Until I find another purpose, then I can say, all right, maybe I’m done with this. It’s the same set of motivations.

I recognize that in everybody. When they don’t have that purpose and they get bored, they’re not happy. It doesn’t matter what level of success you achieve. You could have tens of millions of dollars and lack purpose, and you’re going to be miserable.

Rob: That’s why retirement is hard for a lot of people. I think our generation and younger is probably, now that we have the internet, we have podcasts, YouTube channels, and social media, the ability to kind of make a living in these ways, I don’t know if I will ever retire. I don’t know that I will.

My dad stopped working one day because he had to go into an office and manage construction projects. You don’t want to do that when you’re 75. I don’t know that I’ll be still doing a podcast and YouTube channel when I’m 75, but will I still be thinking, and writing books, and advising startups? I think so. I don’t know why I would stop doing that as long as I was able to, physically and mentally. It’s different these days.

One thing I want to call out, you said, what would I do if I sold? You hear that from Basecamp. David and Jason Fried would say, what would I do if I sold? For them, I struggle with it a bit more. I find bootstrappers repeating that, and mimicking it, and saying like, what would I do if they sold?

I think if you can sell for $10, $20, $30 million, or enough money to where you never have to work again is probably how I should phrase it, I actually think that you’ll find something to do, because you have infinite time and there’s no pressure. If you, Dave, could sell Recapture—I know that it’s not at that point yet—for $20 million and you know that you’re set for life, then I would say, the what I do next is whatever the hell you want and you’ll figure it out.

You can be a philanthropist. Maybe you write a book. Maybe you start another startup, maybe you buy a startup. Maybe you explore hobbies, because you literally have no time clock. You can not work on anything that you don’t want to for the rest of your life. That is different than I’m going to sell my bootstrap startup for a million dollars, which in the US is just—

Dave: That’s not life-changing money anymore.

Rob: No, it isn’t.

Dave: It can change your life, but it’s not an infinite change. Like $20–$30 million, you’re safe.

Rob: Right. That’s where I would say, listener, if you could sell for a million or two and you don’t know what to do next, fine. Keep growing that business, it’s great. Get it to that point if that’s your desire to where you can sell for $20 or $30 million.

But I do struggle sometimes with entrepreneurs who have changed their life, who have built an incredible business, and they’re just like, what would I do next? But also, they don’t like their job. If you love your company and you’re working on it, then fine. Keep doing it. I have nothing against that. It’s this fear mindset of I’m not creative enough to be able to replace what I do with this day job that I’m tethered to.

I want to mix it up a little bit, Dave, and go on to the second topic we’re going to talk about, which is balancing a side project with a day job. I get this question fairly frequently. Someone asked me in an in-person event a few weeks ago. It sparked again in my mind. Really, how do you work a day job? I’ll include full time, I’ll include contracting, freelancing, whatever you want to call it. How do you balance that with a “side project” that you want to become?

Your goal is for it to become your full-time income. You and I both have stories of how we’ve done this. I want to just toss it to you first and then I’ll weigh in. What was your process as you were doing?

You had three products at the time, and you were traveling. You had a client that you were traveling to. You hop on an airplane one week, a month, or something? And a family, right? Wife and kids?

Dave: Yeah. I could tell you how to do it badly in some cases here. It’s a juggling act. I’ll tell you right now, you can easily deceive yourself into thinking, I can totally do this and master all parts of that. The reality of it is, you will not.

If you’re trying to do three different things, let’s say you’re trying to do the family, you’re trying to do the side hustle, and you’re trying to do the contracting job, the full-time job, or something like that, I guarantee you, at least one of those will suffer and suffer badly. For most of us, especially men, it’s not going to be the full-time job, because that’s the one you’re going to make sure that one still brings in the paycheck. That means either the family or the side project are going to suffer.

I’ve seen people that have done both of those. I have done both of those as well. Neglecting your family and neglecting your relationship with your partner, your SO, that is not sustainable. That will resolve itself in one of two ways. Either you’re going to say, no, we’re not doing this anymore, or something more serious is going to happen, like into a divorce or other kinds of conflict there. That one is going to be really rough.

What ends up happening? Your side project ultimately ends up suffering. If you are lucky enough to get enough revenue, which I was for the plugins, then you can start to hire people to deal with some of those things and take some of that stuff off your plate. What that ultimately means is that you’re still not spending a ton of time on those, and your focus is on the other two, so at best, you can keep it to maybe sustenance mode.

You’re never going to be into hyper growth, hyper building, hyper expansion, hyper improvement mode. There’s a limit to your time. There are strategies you can do. You could say, all right, for this period of time, if you’re a contractor, you can say, I’m not going to contract and work on the side project. That way, you got two areas of focus.

That’s great. That’s one way to manage it. But then you have to make sure you’ve got a buffer built up, and that your family is on board with that, and you can handle your finances, et cetera. Then there’s another one of saying, all right, well, the full-time job is just not that demanding. I know several people that have had very undemanding full-time jobs.

They get their work done in 15 hours in a 40-hour week. They got these 25 hours just sitting around. They can do their side project during that time. I had that for a while. That was part of what helped me build that up. But ultimately, that is not going to last forever, not going to be sustainable.

Something will change at some point. That won’t work, but your focus is key to growing any business. Since I have tossed aside full time consulting, I have been able to focus on so many more things and drive Recapture forward and try a bunch of stuff, even stuff that didn’t work more quickly, more easily now that it’s my full-time thing.

I can do it more sustainably, because ultimately, if you’re trying to put your focus on all three of those things, you will hit burnout. It is not a question of if, it is always a question of when. There’s my tidbits of advice on that having tried that for close to a decade.

Rob: Man, you paint a dark picture. We can hear it, it’s something upbeat.

Dave: Don’t do it, man.

Rob: No, but it’s true. It’s true. I get questions on this podcast of people writing in and being like, I just can’t swing it, I’m too tired. It’s like, then you shouldn’t do it. Or you should take an alternate path to where maybe you work your number two at a startup, or you work for a startup, or save up enough money.

I’ve had some friends. I couldn’t do this with our expenses, having the family and Sherry was in grad school, but I had a friend who saved 18 months of living expenses in the bank in cash, and then quit the job and built something. That also scares me, of course, because SaaS can take a long time to find product-market fit.

Dave: Eighteen is not enough these days. No. Yeah, that’s tough.

Rob: I know, it doesn’t feel that way. But all that said, it is tough. I think people need to hear that. I think that there are alternatives. Some folks, they sell fund through (as you said) consulting on the side or consulting during the day, working at night. That’s what I did.

I always had either a day job or some type of 9–5 consulting five days a week, and then it was all nights and weekends. Part of it, we didn’t have kids, and then when we had kids, it was like, well, then we put the kids to bed and then I would work. I don’t do well on little sleep, but I just forced myself too for a while, where the kid would go to bed at 7:00, and then I’d go 7:00 to midnight, and then get up and do that. I got five hours a day.

It was tough on the marriage. But to your point, you’re not going to be great at all for any of these things all at once. There’s family and there’s your side project. You’re going to neglect one of them.

I remember really grinding on it for a while. I remember there was a moment where my contract said, you know what, we have you 40 hours. We’re running into some financial issues. Could we drop you to 20 hours? I was like, yes, this is the best idea ever.

In retrospect, I wished I had thought to propose to them, like, could I go to 32? Because I had done that with a day job where I’d actually dropped down to 80% time at a full-time job before I left a few months later to freelance and consult. 

That was really nice, because then it truly was less of a grind. It wasn’t 60 hours weeks anymore. It dropped it down to about 50. It was like 20 consulting, 30 doing the other thing, and a lot of it was during the day.

I just remember the huge weight off my shoulders. Like I said earlier when I did finally quit that, I felt like I had so much time, infinite time. Let me get this straight. All that crap I’ve been doing from 7:00 PM to midnight most nights, I get to do during the day now, and then I have my evenings. That was actually a reset.

Another surprising one is I was like, okay, now I need to figure out how to do stuff in the evenings and not think about work, to back to our original point of letting it turn off. It’s like, I guess we do have friends. Maybe we should hang out with them sometimes.

Dave: Right. Ultimately, how many times have you said this on the pod over the years? It’s a marathon, not a sprint. If you try to sprint, you can try to sprint for short distances, but it’s not sustainable. You must rest after each sprint, literally and figuratively both. You have to have that time to rest, recoup, and find that sustainable strategy.

If you have the burn rate, you can work part time in consulting and do your side thing, great, do that. That is more sustainable. If you are single and don’t have the demands of the family that you would, if you had kids and an SO, great. That’s an excellent time that you can build a startup. But still, you have to take care of yourself.

You will burn out if you just try to burn the candle at both ends, 40 at the job, 20 at the side hustle, and just do that seven days a week. You think, oh, the weekends, hey man, I can totally do this 16 hours on the weekends. No, you can’t. Not indefinitely. Sure, you can for a while. It won’t feel great. When you hit the wall, you’re going to hit it hard.

Like you said, I don’t want to paint an unrealistic picture of this, because you and I have both tried various strategies on this with varying degrees of success. On the other end, we both realized, focus wins and you have to find a way to get that, protect that, and your health. Those two things. If you don’t have those, you’re not going to have a business that works.

Rob: This is one of the reasons that I started acquiring products early on. 2006 was my first and I realized, oh, this is a way that I don’t have to do nearly as much of that upfront grind with no return of just months, and months, and months of coding at night to finally launch and then realize, oh my God, now I’m at the starting line.

Now I got to figure out product-market fit and all that other stuff, whereas I could buy a product. My original one, it wasn’t SaaS. It was 2006, so that wasn’t really a thing. I was freelancing on the side, working a day job, and I put all the freelancing money into an account. I had $12,000–$15,000, and I spent most of that on DotNetInvoice. I dropped an $11,000 check.

It was very scary. I actually kind of got screwed in a way. I didn’t know what I was doing. It was freaking wild. It was 16 years ago. It might even have been 17, whatever. The revenue wasn’t what they said it was, but that let me skip twelve months of building that thing. It probably would have taken me twelve months of nights and weekends to do it. It already had a marketing set up. It had a little bit of SEO. They were doing a little bit of Adwords. It had just a skeleton of things. I think that’s another path.

Most entrepreneurs don’t want to do that because they want to build their own thing. A lot of them are developers and they want it to be their code. I get it. But one way to avoid some of the pain that we’re talking about is to acquire things, and that’s what you had done. Think all of your stuff, Recapture and the WordPress plugins. You’d acquired stuff before that as well.

Dave: All my successful stuff was acquired. The things that I tried to build from scratch like Support Line, yeah. I’m not saying you can’t do that. I screwed up on so many levels with that one not figuring out what the customers wanted, not trying to get people on board in advance. I made so many of those.

In the last episode, ten classic SaaS mistakes. Your number one was, make sure people want the product. I didn’t make sure that they wanted the product. I just started building it based on some faulty assumptions, and it blew up in my face $50,000 later.

Dumb things like that will kill you every time. You get a level up advantage if you can find something that has product-market fit that you think you can grow, that you can see the flaws in, and acquire it for a reasonable price that already has some revenue, some traction, and build on that. That’s still to me, a massive advantage today.

Rob: Indeed it is, sir. If folks want to keep up with you, you are @daverodenbaugh on Twitter and we will spell that out in the show notes of this episode. Of course, recapture.io if folks want to see what you’re up to. And you’re co-host of the Rogue Startups Podcast with Craig Hewitt. Thanks for joining me, Dave.

Dave: Thank you for having me Rob. Always a pleasure.

Rob: Thanks for joining me this week. If we’re not connected on Twitter, hit me up @robwalling and of course, @startupspod if you want to see our fun 90-second video clip that we kick out each week. Hope to connect with you there. Thanks so much for listening every week. Signing off from episode 612. Talk to you next week.

Rob: We have another incredible story today on Startups For the Rest of Us. In this episode, I chat with Patrick Campbell, the co-founder of ProfitWell on how he and his co-founders bootstrapped it to a $200 million exit. Even if you’ve heard other interviews with him about this acquisition, I focused on questions that I had not heard answered elsewhere.

I asked a lot of questions about the actual transaction, like what was the stock versus cash split? How long did you have to stick around? What was the revenue breakdown of consulting versus SaaS when you sold? As well as talking through his and his co-founders thought process as they were deciding whether to sell.

Before we dive into that, I try not to do this often. But if you feel like you’ve got value from the show, I have a favor to ask you. As you probably know, MicroConf is the in-person, online community, and event series that is tied to Startups For the Rest of Us that launched out of this podcast.

MicroConf was created by Founders for Founders. We are doing a survey to find out how we’re meeting people’s needs, how we’re not, where we can improve, what we can do. We’ve done one of these maybe every three or four years at most.

We’re just trying to make sure that everything we do with MicroConf, because we have a staff running events, community, mastermind matching, a YouTube channel, and we want to make sure that everything we do helps bootstrapped and mostly bootstrap founders meet, learn, launch, and grow, so we have this seven minute questionnaire that will greatly help me and greatly help producer Xander and the rest of the MicroConf team.

If you go to futureofmicroconf.com and complete that survey, honestly, I would really appreciate it. Feel free to mention me on Twitter if you want to let me know, and I will personally thank you for it, @robwalling. When you complete the survey, you’ll also be entered into a drawing for a free ticket to either MicroConf Europe or MicroConf US in 2023. Those are our flagship events.

Again, if you feel like you’ve got value from this podcast, this would be a way to perhaps give a little value back. With that, let’s dive into my conversation with Patrick Campbell on his $200 million exit of ProfitWell.

Welcome back, Patrick Campbell. Thanks for joining me on the show, man.

Patrick: What’s up, man? Good to see you.

Rob: It is good to see you. It’s been a while.

Patrick: This goatee is working.

Rob: It’s working?

Patrick: Yeah.

Rob: All right.

Patrick: I haven’t seen you with this much facial hair in a long time, so I’m excited for this

Rob: I accidentally grew it while we were on a camping trip. I came back and I did a live stream, and people were like, this looks great. You should keep this forever. Only people didn’t like it. were my kids, but Sherry was like, you look better with it, and people were like, it makes you look younger. How does facial hair make you look younger?

Patrick: It’s really funny. The reason I have a beard—you’ve known me when I didn’t have a beard—is because I got called out for being too young in an exec. Not my exec team, but an exec meeting for a customer. I was so caught off guard that, insecurely, I was like, I’m just going to grow a beard now.

Now that I’m getting older, I’m like, oh, I’m going to start being clean shaven just to reverse back in age. I don’t know. Guys with facial hair, it’s a mystery. We’ll have to talk to the beard brand crew if we ever need to get down this rabbit hole.

Rob: Indeed. Folks, I’m sure everyone is aware. You bootstrapped ProfitWell with co-founders, sold it for, I believe the numbers are $200 million or north of $200 million. I’ve seen differing press releases. I see you as a future TinySeed investor.

Patrick: There we go. Einar already hit me up. Literally, it’s in the announcement. Einar DMs me and I just went, come on, man, give me a couple of days.

Rob: Let the body sink in the cold at least. You’ve spoken at MicroConf. Frankly, your journey started with ProfitWell as a consulting agency called Price Intelligently that you then built ProfitWell out of, which I think of as like stair-stepping or self-funding. It’s like you have this engine that’s generating money and you use it to basically build software products.

Most people don’t make that turn. There’s a lot of Dev shops, SEO shops, and marketing shops that try to productize. It’s very hard, so obviously you guys did something special. I’m curious, I have a bunch of questions that people have asked me and that I’ve been thinking about not only the acquisition itself, but the process of getting here. I think let’s start at the end. It’s a hero’s journey of like, here we are, you got a big bank transfer on a certain date a few weeks ago.

Patrick: An uncomfortable one.

Rob: Yeah, to where it’s like, whoa, I’m not just rich. Maybe generations of my family never have to work again. I mean, it’s a lot of money, dude. What does that feel like when you look at this huge sum with more commas than you’ve ever seen?

Patrick: Yeah. You know what’s really interesting about that? I think I’m going to stay at the end, but a comment you made about like the—we don’t call consulting, we call it services. We can get into that later if you want. I think that a lot of times why a lot of Dev shops end up not being able to get the product because they get hooked on the revenue. You personally get hooked on basically taking the money off the table.

To have, I would say, either the courage or the risk to basically say, okay, I’m making six figures right now, I’m taking profits off the table doing really, really well, to say, all right, we’re going to take that to zero next year or we’re going to slowly lower that revenue, even though I’m getting better and better bringing that money in. It’s a hard thing.

For us, the reason it worked well is we always were reinvesting all of the profit back into the business. To answer your actual question without going too much on a tangent, I did the Dave Ramsey thing. We did the Dave Ramsey thing, where we were paying off our house aggressively. We bought a house in Salt Lake City, so everything over an emergency fund was going to the house.

In January this year, I had, I think it was about $12,000 in our bank account. Just Jenny and I, and a paid off house. We should have waited a little bit, but we were like, screw it, we don’t have kids, we don’t have any major emergencies, like the company is in a good place, my paychecks are going to keep coming in.

It was one of those things where it’s pretty crazy to go from that to feeling, essentially, like you won the lottery. I say it that way because this is a very champion problem, privilege conversation, like don’t worry, I recognize that for anyone listening. But I think one of the crazy things was, as a founder, especially an indie or a bootstrap founder, you always know that you’re going to get there. You are always like, I’m going to fail or I’m going to get there. But then when you actually catch the car, you’re like, oh, what just happened?

That was the feeling because I know I worked hard for it. I know the team worked hard for it. But it’s hard not to feel like you’ve won the lottery. I think that it’s been a couple of months since it closed. What’s been crazy is I realized that having means, essentially, you are the same person.

That’s both amazing and also terrible because you think, oh, once I have money, I’ll change this or I’ll change that. It’s only been eight weeks, but it’s like, oh no. The things I’m bad at, I’m so much more bad at the things I’m good at. Now I can amplify those particular things. I think that’s an initial impression or at least an initial impression after a couple of weeks of being able to sit on it.

The best advice I got was just to sit. I’m not jumping in anything. I think I told Einar, I was like, I’m sitting till the end of the year, probably. I don’t even have any mutual funds. I have no index funds. I have nothing except some crypto, so I’m just going to sit on it and come up with a thesis and a plan, probably in 2023.

Rob: Stuff is on sale right now, man.

Patrick: I know.

Rob: I’m envious.

Patrick: The best advice, just wind back, hang out. Just wait a little bit.

Rob: I think I hung on for about two or three months before I just had to start. I just couldn’t sit on cash. I could sit on a chunk of cash, but I started dollar cost averaging or I should say, we. Sherry and I started dollar cost averaging into some index funds, into crypto.

It was 2016, so it was a good time to get into crypto and an okay time to get into stocks. It wasn’t amazing, but I felt, oh, my God, the markets overvalued. Why am I buying in? But you just have to do it.

Patrick: You just got to the dollar cost average.

Rob: Yeah, that’s what we did. But you’re at a great place in time. You have a lot of money to move around, so that’d be good. Can you talk about the split? I imagine it was a split of stock and cash. Can you talk publicly about that?

Patrick: What I can say publicly is about half and half. It was definitely a stock component, definitely a cash component. It’s also one of the reasons we didn’t talk about the final number publicly. I was talking to you before we were recording. It’s kind of weird what you communicate, because in some ways, this is a bit of a merger. But it’s an acquisition because obviously, we’re getting bought, but Facu is now running the product.

I’m on the board of the exec team. Peter is still running a big portion of sales. The way I looked at it was that we’re kind of moving to a larger vessel, which is cool, but with a company that has a very, very unified mission with us, which is really cool. I think that there’s probably maybe three companies that we could have had this unified vision with at the detail that we have.

That’s been the cool part in terms of why we wanted stock to be a good portion of the deal and stuff like that. Now, I don’t have an earnout, but I intend to be here for four or five years. I intend to see this through the IPO just because I think it’s one of those things that I’m just excited about.

That’s a weird feeling too, because I’m still working just as hard. Those of you who know me, I work my butt off. It’s just one of those things. I still love what I do, which is great.

Rob: Yeah, it’s a great place to be in. This deal, north of $200 million, have you talked at all about what revenue you were doing in total? What percentage? Because you had the services wing and the SaaS wing, how did the percentage break down?

Patrick: Yeah, not doing public with the revenue numbers. It’s just interesting too. Again, what you choose to be public with. There’s not a huge incentive to be public, unfortunately. There’s a huge debate I always like. I tweet every so often like, show me a company that’s over $10 million that’s truly transparent that’s not public. It’s very rare.

As soon as we hit $10 million, I can tell you, we were over $10 million in revenue, we just stopped talking about it. I talked about it at MicroConf when we hit the 10 million.

Rob: I remember.

Patrick: That was the last time that I was public, actually, with those numbers.

Rob: That must have been 2017 or was it 2019?

Patrick: I actually don’t even remember. It might have been 2018 or 2019. What’s interesting is that it was $10 million in total revenue. Mostly or partially of that was the services revenue at the time. Every single quarter since then, the services revenue wasn’t growing at an exponential pace, but basically, the MRR pure software revenue was growing at a very, very doubling kind of pace. We ended up at sales around 50/50, basically.

Our services revenue, the reason I quibble with the word consulting is that what we did, which I think a lot of people who were trying to stair step in terms of consulting or service revenue should do, is actually started off with software. It was a pure software product, originally. For the first six months of the business, we realized that iterating on that product was going to cost so much money, just time. We started putting humans like myself, basically, to kind of fill those gaps.

I think what ended up happening is we basically defended our margin, and then anything that we could fit within that margin, essentially was game, so we could grow the business, we could grow overhead, whatever it was. We set the margin, basically a 50%. That business was doing, I think, north of 50%. Not by much, but it’s doing about 50% margin, and then our SaaS revenue was 95% margin, something crazy like that.

That was one of those things where I think if you can defend a margin and then grow within that margin, keep going. I would argue, with services revenue, as long as you can keep that as its own separate unit, which is what we did, we had a Price Intelligently, retained team, or revenue recognition team for three different products. All one company, but growing in parallel, if that makes sense.

Rob: Yeah, it does. What was your total team size?

Patrick: I’m trying to think of how many one-on-ones I had the day of the announcement, because we announced to the team and literally like, cool, we’re going through 83 conversations just to like, here’s your offer. Everyone came on board. I think we’re at about 90 now if you count the pre-Paddlers. The whole company now is about 350. Good portion of the 350 is us, which is great. But I think we aligned on culture so much that it’s been a smooth transition so far.

Rob: Yeah, I’d heard you talk about that. I believe you had a conversation with Justin Jackson. I think I heard it there, where you’re digging more into the culture, and how impressed you are with the founder of Paddle, and just how the two of you jived. Were you reinvesting most things back into the business then, versus taking a lot of money out of it? It sounds like it was highly profitable, but you were reinvesting a lot of it.

Patrick: Everything. My average salary was $72,000 a year. I think, I can say, I was making $150,000 at the end in terms of my annual salary, but it was definitely no profit sharing, nothing like that.

Rob: Right. Typically, when you’re reinvesting like that, you’re doing it for an end goal of an exit.

Patrick: Yeah, totally.

Rob: Otherwise, you’d pull money out as you go. You cashflow it over. I’d imagine, you and your co-founders, had you had conversations about, we are growing this thing to exit at some point?

Patrick: Yeah. This is a really important thing, and I’ve talked about it a lot. Forgive me if you’ve heard this from me before, but I think you need to align, I would argue, not only your co-founding team, but probably your exec team on what the goal of whatever entity you’re building is.

I think ConvertKit, Nathan, they’re aligned on what they’re doing. They’re doing profit sharing. I think what we did is we wanted to build a very large company in a more traditional sense. Nathan wants to build a really large company, but they’re building it in a different way. I think that’s a really important thing.

We would always check in. Frankly, that’s what kicked off this process. We were checking in and we went okay, do we want to go the profit sharing route, because that’s always an option because we’re bootstrap? The answer was no. Two other options, we’re raising a traditional venture for the first time, because we hadn’t raised any capital before or doing M&A.

We actually didn’t even think about the M&A part until Christian started talking to us. It was one of those things where those were going to be those two paths. That’s kind of the thought process that we had.

Rob: Have you talked at all or can you talk about the ownership split between you and your co-founders? I know there were co-founders early, then someone came in late, and everything. Do you have three co-founders?

Patrick: Yeah. It’s really complicated, actually. It’s overly complicated. These original board advisors or board members and advisors at this point, they’d been like that for years. I think all three of us, we’d never started a company before.

They were part-time, I was full-time, which rarely does that work out, because there’s always some consternation about who’s doing what and you have this cut, but you’re not. There’s always just all these different surface areas for conflict. We certainly had all those surface areas be full of conflict.

The folks I call the co-founders, the people who were in the trenches the whole time, or Peter Zotto who runs sales and revenue, and then Facundo who runs our product, basically, and engineering. I’m probably not going to get into splits just because it’s not my story to tell in terms of these types of things.

Rob: It’s personal.

Patrick: I do think it was really important, even though we were bootstrapped, I think, just because I know a lot of the listeners of the show. For one, I think it’s totally fine to do Mailchimp or a lot of small businesses, where the owner owns 100% of it as long as you’re super upfront with your team.

If your team is hurt when you sell and there’s no outcome for them, you were always upfront, which I think is what Mailchimp technically did. There were a lot of armchair quarterbacks who were all like, oh, yeah, you should have given more. It’s like, no, no, he overpaid, and everyone knew what was going on.

I think what we chose was a different route, where every single person in the company had equity. Every single person who was there over their cliff basically got some sort of outcome. We accelerated, everyone’s vesting, who was in the company at the time of the sale. It’s just one of those things where we choose to spread things a lot, but I don’t judge people who do the opposite. You have multiple options when you’re trying to build something.

Rob: Right. Did I hear you say that you minted X number of millionaires or something? I don’t know if you talked about that. What’s that breakdown?

Patrick: Yeah, we minted. I got the numbers in front of me, 13 millionaires, 33 people made over $100,000, 98 people over $10,000, and then 124 people received some sort of consideration. Those were folks who were inside the business and obviously a lot of folks who had left the business since.

Rob: Who had left, but they kept the equity.

Patrick: Yeah, of course. What was unique for us too is we did profit interests in management interests, that type of a structure. Our team didn’t have to pay anything to get their equity. It wasn’t like options where they had to exercise them. It was one of those things, where each year, because we were running all the profit back into the business, there were no taxes. It wasn’t one of those things where they had to pay taxes on it on a continual basis. Even if there was, the company took care of it.

Essentially, it was one of those things where they just own the equity. That was another option. I think options, there’s a reason they exist, but there are some trade offs. I think if you’re in a bootstrap company, it’s a huge selling point, especially someone who’s been burned on options.

It’s like, hey, no, no, you own these. You own these outright. You have to vest them, but you don’t have to buy them. You’ll get taxed basically at a liquidity event rather than out on anything else, or any distributions which we didn’t end up doing.

Rob: Yeah, there are a lot of different options, people. I don’t mean stock options. I mean, there are a lot of different ways to do this. There’s profit sharing. There’s, like you said, the Mailchimp way, which I think was just more bonus-oriented and just paying high salaries plus bonuses.

There’s true stock options, and then there’s profit interests, RSUs. There’s a lot more than I think people commonly think about. Especially when you are bootstrapped, you have to think about it a little differently than just going the traditional path. Did you ever consider taking funding?

Patrick: We had one point. In the early days, you get very enamored by the inbound, because you’re like, oh, I’m pretty, and you don’t realize you’re just on the other end of BDR. It’s basically these associates who are trying to hit you up.

I think what’s interesting is you reach a point where you’re like, I’m not going to talk to any of these people, and then that makes them more excited. What ended up happening is a couple of years ago, I got an intro because I respected the person doing the intro to someone. I had a conversation with them, just a random coffee. They basically threw a term sheet in front of us.

Within two meetings, we knew this was just a game to get us off the sideline. I did work mildly to get us off the sideline, but we never ran a formal process, anything like that. The way we funded the business was not only through all the profits, but in the early days, I cashed out my 401(k). I was pretty young when I started the business, so it was like $14,000. I think I had to pay half of it to tax, because they hit you pretty hard on that.

Basically, I lived in Boston on beans and rice basically for about nine months before I started paying myself a very small salary. Again, no kids, no mortgage. These are all caveats. Also I didn’t have any student debt, thankfully. That was a really, really big thing that I had some scholarships that basically wiped my debt out.

Rob: I feel like bootstrapping is both simpler and more complicated than raising funding. For me, it’s simpler to run the business. There are fewer stakeholders, but it makes getting there, I think, a lot harder. One of my regrets is I didn’t raise half a million bucks with Drip, because I’ve been grinding for years.

Patrick: Sorry, I’m interrupting you. I agree, because as soon as we knew that ProfitWell was going to be free and the barrier to accuracy was going to be something that was actually really hard, we should have raised money, even if it was $1-$2 million seed or small Series A. We should have done that immediately, because I think it would have knocked two, three years off of the life cycle. This was my first business, and I think it’s just things you’ll learn as you keep going, so I wholeheartedly agree.

Rob: I was doing a talk on how bootstrappers, if you did come across, suddenly you signed a big annual deal with a customer and you have $100,000 in the bank, or if you do take a small amount of funding, or whatever. If you suddenly have money, here’s how, as a bootstrapper, I would think about spending it.

One of the things I said early on that I was like, this is crazy accurate. But in your personal life, money saves you hours. It saves you not having to drive to the store. It saves you paying someone to help you. But in your startup, in your business, money saves you years, which is exactly what you’re saying. Having money gets you there faster.

You think two to three years, I think similar. Not that I was in any huge hurry, but I think it makes it a little bit of an easier path. You can hire more senior people there. You don’t have to live on beans and rice and cash out your 401(k).

Patrick: I think the counter argument too is that, I don’t know about you, but in the early days, if I think if I was able to convince people I was worthy of a $1 million seed round or a $500,000 seed round, I would have wasted the money. That’s another thing too.

It’s kind of like you pick your poison. Yeah, in hindsight, two to three years, will I ever do a bootstrap company again? It’s not an easy yes. Even though I have all this knowledge, it’s like, I don’t know.

The other thing that I don’t think we talked enough about is I think that there’s a massive trade off in terms of network when it comes to bootstrapping. Things like MicroConf, this podcast, some of your, I don’t know if you consider them competitors, so I’m not going to say them.

Rob: […].

Patrick: Yeah. They’re different. But I think that a VC, even an angel, when you raise money from them, not all of them are great. Even the average ones, if not the good ones, they’re incentivized to make you successful. You get invited to the events, you get invited to the retreats, you get invited to all of these things, and it’s kind of a reactionary thing that you have to do. Whereas with MicroConf and these types of things, you have to choose to look at the content.

There’s obviously so much content now that it’s easier to get that funnel going. I think that’s the thing that it can be very, very lonely as a founder in general. I think you’re even more alone as a bootstrap founder if you don’t actively choose to build your network.

The best advice I got was, actually someone told me, never to go to events, work on your product. The best advice I got was that stupid advice. You should go to every single event, unless you have a built-in network. I was like, okay, yeah, that doesn’t make sense, but let me see what happens. Then the network just paid back tenfold, which is great.

Rob: Right. I want to be clear. I’m certainly not saying funding is greater than bootstrapping. There are just trade offs that a lot of bootstrappers don’t think about. They think about the freedom or the simplicity side, but folks don’t consider. That’s where this podcast has been for bootstrapped and mostly bootstrap founders.

That’s how I say it these days, because I realized, probably 2013-ish, it was right on time. Customer.io raised their round. I said, woah, they’re funded now, because to me, it was bootstrapped or funded. They’re like, yeah, raised a quarter million, we’re not going to raise again.

I was like, wait, what? You can do that?  He called it fund-strapping, which I don’t call it. I was like, this is intriguing. That was where I started thinking like, funding for bootstrappers, this could be a thing.

Patrick: I like what you’ve done with Tiny and what Indie.vc, which is no more. Even some of these rep based financing products and these types of things, because I think what it does is it helps with, in my opinion, funding probably shouldn’t exist. I think there are amazing angel funds.

There’s amazing angels out there, but there’s a lot of crappy ones. Especially in Europe, if you’re a European founder listening to this, you’ve probably dealt with something like, great, that person put in $30,000, and they have 30% of my company, two board seats. This makes no sense from a US perspective. I think the evolution has been really interesting, but I’m probably not the best person to go deep on it.

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Very cool, man. It’s funny. I asked just a couple founders I know like, hey, what questions do you have for Patrick? I have this huge list. We’ll never get through them all, but I do want to cover a couple more. Someone asked, how many months did it take from the first contact with Paddle until it closed?

Patrick: Months. Yeah, way too long. I was talking to a founder yesterday. He sold to a PE firm whose whole shtick is they close in 10 days and I was like, holy cow. He’s like, yeah. Because now he’s working with this PE firm. Would you like a roll up? He’s like, yeah, that’s our thing. We close in 10 days. I don’t know about you, but I did not close in 10 days.

We went from conversations in October, November. We kicked off a process through early January, signed a term sheet.We had a number of options to sign. That was a 12-hour day of just ourselves, the 10 top people of ProfitWell sitting in a room all day.

I think this was kind of a unique way to do it. Basically, Facu, myself, who were kind of the main people involved in the deals and things like that, we presented the options. We walked away and let the team debate it for a couple hours. Then we came back and we said, whatever you choose, we’re going to fight the opposite. That kind of helped challenge.

We went through those 12 hours, signed Jan 15, and then diligence, contract negotiation. Paddle had to raise money to fund the deal. It was one of those things, where literally, January 20 something, the market starts to tumble. War in Ukraine starts to kick off, so all the stuff is happening.

Thankfully, one of the advantages of going with KKR for the fundraise was that they’ve been investing since the 70s or 80s, so they’ve kind of seen everything. They weren’t fazed. There were other funds that they’ve only been around for 8-10 years, so they were like, oh, my God, freaking out with a downturn or potential downturn that’s happened.

We closed. Signed April 8th. We did a split sign and close, cleaned up a bunch of stuff, had everyone sign stuff, and then we closed two weeks after that, basically. The best thing, if anyone goes through this, even if it’s an aqua-hire or something, we all then went to London for the all company summit. Within weeks, everyone was together, ProfitWell folks, Paddle folks.

I would say even if you’re a small team, even if you’re a couple people, go to the HQ, go to wherever your team’s going to be, and go there for a couple of weeks. I stayed for about a month and a half just to be in the office and stuff like that. They have a remote culture, but it was still good for the people who came into the office. Yeah, it was a long timeline.

It was extremely stressful. If I didn’t respond to your email, your tweets, or something during that time, that’s why, because every single day was a new fire. But it would be all existential. It’d be like, oh crap, there’s this thing. Oh, are they asking this because it’s bad or they’re asking this because it’s a problem? Oh, no, they’re just asking. Great.

You have these constant emotional resonances, because I had never been through this before. I had a couple of Sherpas help me out. Some people had gone through deals, but it was still really tough just because it was a lot.

Rob: Yeah, it’s always longer than you want it to be. It’s always more stressful. I don’t know how many times you hear that it’s really stressful from people who’ve gone through it. I certainly was not prepared for the level of pressure and anxiety that I endured, lack of sleep, and all the things. Every day I woke up and I was like, well, today’s the day it all falls apart. That’s what I kept saying.

Patrick: That’s the thing, too. Let’s say they have the money, which was not necessarily the thing for us. Let’s say they have the money, even then, there were 86 lawyers, so this lawyer for their thing is saying that this is wrong. Well, is the business person over they’re going to go, well, we’re now over the scales?

They’re going to find bad stuff. It is just how it works, because they either think things differently or you didn’t clean this stuff up, because why would you? You’re not a venture-backed company, you don’t need to clean some of this stuff up.

That was definitely a nerve wracking thing. Now that I’ve gone through it, I’m like, great, I want to do this more because now I went through all the tinglies already, so now I can do better. But yeah, it’s interesting.

Rob: I also think you hit a point. I don’t want to speak for you, but everything since then, for me, has been way easier. Even though now with TinySeed, we’re dealing with tens of millions of dollars, we’re doing these events, we’ve had stuff go well and some stuff not go well. COVID hit MicroConf, that was devastating, I have gone through more actual stressful moments since selling Drip.

I’m like Zen. I’m like a stoic. I think there’s a couple things with that. When the volume turned up to 11 for four to eight months, it sounds like it was eight months for you, I think you just have to adapt at a certain point, or you crumble.

I think the other thing is, for me, having money in the bank, I’m always like, yup, worst case, I’ll still be okay. There’s a certain level of comfort that I think we’ve never experienced in our lives if you grew up working class, whatever, if you didn’t grow up with money. 

Patrick: First, I think building a business and sticking with it is the best self-help program ever. I don’t know about you. I don’t want to speak for you, but thinking of my emotional maturity when I started the business to my emotional maturity now, it’s insane. I wouldn’t have got it without starting a company and getting kicked in the face every day for years.

I think the other thing is that’s something that’s interesting about knowing thyself as a founder and know thyself of what you want, because the stuff sucks. If you push and you’re resilient, on the other end, there might not be a pot of gold, unfortunately. But there is going to be like, holy cow, I learned so much. Your emotional resonance on so many things just comes down.

It’s funny you say that. I know, that sounds like a very champagne problem about sleeping, or you didn’t say sleeping better at night, but like, okay, I’m going to be okay with cash in the bank, but this is also why I don’t think you should do what we did. I think you should take money out of the business.

You should schedule it. You should literally like, once we hit this milestone, I’m going to take the next X thousand dollars out of the business, or I’m going to do this, I’m going to schedule this race. There were years where I was making $50,000 a year. I shouldn’t have done that.

I just shouldn’t have done it. What was happening is, as we got closer to this point, my risk aversion was going out of control, because all of a sudden, I have a paid off house, but I have $15,000 in the bank. You know what I mean? That’s a very different feeling.

A paid off house felt great, but also like, yes, we have a bootstrap business, but you get into your own head. I think you should take money off the table. That might be a justification to raise a round at some point as well. It’s just to take some money off the table and go from there as well.

Rob: Right. That is absolutely something that I think founders should consider once they’re north of $1.5 million, $2 million ARR. Right now, the valuations are not amazing because of the market, but historically.

Patrick: Wait six months if you can.

Rob: Yeah, wait six months. We’ve started talking to a few founders through the TinySeed syndicate who want to raise secondary. We’re like, yeah, it’s a nice opportunity, I think. I totally agree. I remember back when Rand Fishkin was running Moz and he tweeted, we are about to raise another round.

I think they’re doing $35 million ARR. He says, my assets are typical brands, super transparent. He’s like, I have $10,000 in the bank, a rented apartment, and a car. He’s like, should I take secondary? I feel guilty doing it. Everyone’s like, are you serious, bro? Take $250,000, take half a million, take six sum of numbers.

Patrick: It’s crazy. The guilt is so weird. It’s so weird. I grew up poor, working class. I had a union dad, so everything having to do with corporations, and management was evil, so this ironic career I have. It was fascinating, because even thinking about secondary, even thinking about profit distributions, even thinking about a raise, we had to put it into the plan.

That’s why I suggest that, because every time we’d come up to it, we’d be like, ah, maybe we should just hire that next salesperson or that next engineer. I was talking to you before the call, we exited. But because I’m intending to be there for a long time and a lot of the team is as well, it feels kind of dirty. I genuinely feel like, oh, can I tweet about money? Can I tweet that I’m at the St. Regis for a vacation now? Can I do those types of things?

I don’t know. I’m getting warmer to it, because I think that it’s just reality. You got to live your truth and show people you’re not an asshole. But even since the announcement, there were some people treating me weird. There’s this vendor that I love and who was great, but now that this has exited, we hung out and he’s treating me as I would imagine. He’s saying some weird stuff and I was like, dude, it’s just the same, which is such a weird concept.

I’ve already been hit up by a family for money. It’s just kind of crazy, but not in a gross way. It wasn’t in a gross way, but they probably wouldn’t have done it unless this happened. Again, it was a very well-intentioned way, but now there are all these interesting things you have to deal with.

Rob: It’s a trip. That happened to me too, actually. Someone pretty close to me and my family hit me up for money right after and I was like, wow, this is so weird. This doesn’t feel good.

Patrick: When I told Jenny, I was like, hey, we should just make a philosophy. Because if we agree we’re not going to do it, it’s easy enough just to be like, well, we’ve decided unless there is always room for you, food, whatever you need. It wasn’t because of someone being destitute or anything like that. It was more of an opportunity based thing.

In terms of investing in family and stuff, it was like very, okay, well, we have to see this person at Christmas. Even if we’re fine, we don’t want them to be weird. We’re still in the middle of talking about it, but it’s kind of wild.

Rob: As you said, it’s a champagne problem, but it is still an issue that you have to deal with.

Patrick: Yeah, totally.

Rob: I want to ask you a couple of questions about Paddle. You’re now part of Paddle, which is payment processing. You didn’t name competitors, so I like that one. Your competitors? I mean, come on. We know who the payment processes are in our space, Stripe, Braintree, or who I would think about.

What do you think about competing with Stripe specifically? It feels like everyone likes them. They ship a lot. They’re high quality.

Patrick: Wait, Stripe’s got a great brand? What are you talking about? Yeah. To take a step back, and this gets into some finickiness about definitions. Paddle is not a payment processor, Paddle is payment infrastructure. I know that’s like, what the hell does that mean?

Basically, the way to think about it is, let me think of a metaphor here. Stripe creates the roads. Stripe also creates the trucks and logistics through Stripe billing. Stripe has the roads. They have billing with the trucks. The thing, though, is Stripe’s truck is really good up until a certain point, like probably a million in ARR. Some people go well beyond that, but there’s a reason.

I can say this from a data perspective. Everyone’s going to think I’m biased now, but we saw this in the data beforehand. You can find me talking about it before the acquisition or before we even talked to Paddle. But right around a million ARR, we would always get hit up by people from ProfitWell and be like, hey, we’re outgrowing Stripe, we want some of this, who should we go to? We would send them this article that has 21 different subscription management systems on it, Recurly, Chargebee, the whole gambit.

The way to kind of think about the metaphor is Paddle is not just the truck, but kind of like the logistics network. What I mean by that is, let’s say you’re a founder and you’re selling a particular product, and you want to start selling in Eastern Europe, Western Europe, Venezuela, Brazil, or whatever it is. What Paddle does is it stitches together all of that infrastructure so that you just have one interface. They handle all of the taxes, they handle everything.

The difference really is you plug it in. What people don’t realize is that we’re a customer of Stripe. We’re one of Stripe’s top 200 customers, Paddle. We’re a customer of checkout.com. We’re a customer of Adyen. We’re a customer of a bunch of these different payment processors.

What we do is we sit on top of that. We basically route the payments to whoever has the best payment acceptance, whoever has the best for that particular country, because Stripe is not as great in Brazil as some of the other ones are, et cetera.

What’s kind of cool is because it’s called a merchant of record, basically, all of the different payments go through Paddle, so they handle the taxes. Essentially, you don’t have to pay a tax bill for your sales. Those taxes are just kind of taken care of.

It’s a little bit more nuanced. I think of it as a middle layer rather than an infrastructure product. This is kind of what fits in the thesis. Paddle does it for you when it comes to taxes, currencies, and those types of things.

ProfitWell was very geared towards like, we do it for you when it comes to retention. We do half of it for you when it comes to pricing. How can we continue this kind of do it for a metaphor or do it for your mission of running and growing your business, basically? The vision is when you plug Paddle in, a dollar that goes in should be worth a lot more on the way out just by the nature of using the software. That’s kind of how we think about it, if that makes sense.

It’s a little bit more nuanced, like, is there a crossover with Stripe? Absolutely. Is there a crossover with Chargebee? Yeah, but we have customers who use all of these things, because it’s a little bit of a different nuanced space in the stack, if that makes sense.

Rob: It does. Especially as you get larger, these things get more complicated. Tracking metrics and paying sales tax. Every other week in TinySeed, there’s a question about either VAT or if you’re a UK limited company, because we have an EU fund now.

Should I be thinking about paying sales tax in the US? Then there’s the US companies saying like, well, what is France going to do, come after me? There’s all that, and then there’s the VAT as a whole other different story. Yeah, I get the nuance. I think I now understand more about Paddle than I did, because I had assumed that they were much more similar competitors to Stripe.

Patrick: I think they get you a pair to Stripe in the indie community a lot. Because if you’re a European company, you go typically with Paddle because you know how complicated the tax stuff is. If you’re in the US, you’re just starting in the US. You don’t really realize, when you start sending in Europe and you get a letter, a tax letter and you’re like, wait, what? You get that as a kind of reaction.

I don’t know. It’s interesting, because this do-it-for-you concept, I think, is where most softwares going to go in the next couple of decades, not with AI and everything like that. I just think the UX is getting to the stack in the right place, like the priority stack.

For example, I didn’t realize this before even talking to Paddle. Let’s say something goes wrong with Prague having its own tax authority inside the Czech Republic, inside the state that Prague’s in, it’s just so complicated. If there’s a problem there, you don’t get the letter. Paddle gets the letter, which is kind of interesting.

There’s a whole team of risk and a whole team of lawyers at Paddle that just handles this stuff for you. I didn’t even realize that, because most of our sales are in the US and things like that. It’s just kind of fascinating how complicated this problem is.

I think that Paddle has suffered from that, too, because it’s a little bit of a black box. People look at Stripe, they’re 2.9%, Paddle, 5%. They’re like, oh, they’re the same thing. Why is it more expensive? Well, it’s more expensive, because Paddle goes to jail, you don’t go to jail. They’re handling all this stuff, so it’s really interesting.

Rob: Yeah. It’s kind of like PEO the first time I heard of that for hiring. They are the organization of records or something. I don’t even remember what the term is, but your employees are actually employees of that PEO. Therefore, you can get group health insurance, and then they handle a bunch of compliance. I think it’s similar. I don’t want to compare directly to that because all the PEO suck.

Patrick: Yeah, it’s a little more complicated.

Rob: Yeah, but that’s what it is when you get into this stuff. I know you have a hard stop in two minutes, so I just want to ask you one last question. I know you moved to Puerto Rico. Is it true that if you live there enough days during the year, you can backdate your residency to the beginning of the year, and then you can avoid, I’m assuming, income tax or long-term cap gains?

Patrick: Yes, I moved to Puerto Rico. Being a Midwesterner who grew up poor, I am very embarrassed to talk about this, but I think it is important. It is a tax haven. There’s a couple of things. Would I be in Puerto Rico without the tax incentive? Probably not.

Jenny and I were looking at potentially going to essentially a warmer place, because we’d always lived in Boston or Utah, so colder places or typically colder places. We wanted to kind of consider somewhere it was warmer. As this deal was going, we’re like, while Paddle’s remote, it might be the opportunity to go for it, that type of thing.

I heard about Act 60, it’s what it’s called. We came here and the first thing I’ll say is, every single person who has come here solely for the tax benefit, ends up leaving. Every single person I meet that’s leaving, they’re not really expats because it’s in the US, but there’s a lot of people who end up leaving.

We got this apartment from a group of two people who are leaving. I was like, oh, you’re leaving before the requirements? They’re like, yeah. They were only here for taxes.

We came here and we’re like, okay, taxes, it’s not nothing, but could we live here? Could we see ourselves here? We’re going to have kids soon, all that kind of stuff. We checked all the boxes and we’re like, yeah, and there’s a tax incentive.

Long story short, to answer your question, I am going to be paying taxes. Don’t worry. I’m going to be paying a significant tax bill. It’s not like I’m going to zero or anything like that. Yeah, you get long term cap gains for the value of the equity while you’re here.

There was a value before I moved here. Then there was a sale that increased the value while I was here, so there’s some of that that’s going to be tax free, and then my stock going forward will theoretically be tax free if I meet the requirements, which the first year is tough. It’s 183 days and I realized and started to count my days, I was never in a place for 183 days previously.

There are some other requirements. You have to buy a property, and there are some donation requirements, and stuff like that. I will say if you are considering this at all, there is another portion of this that if you have basically a service business or even a software business, there is another tax act that basically you get 4% income tax, and there are some other incentives to it.

What I will say is talk to a lot of lawyers. Feel free to contact me, because the first lawyer I talked to, everything was yes. Every question I asked, well, what about this? He was just trying to get through and get his $5000 basically to file, because it is a lot more complicated than you think. You’re probably going to end up paying taxes if you’re going through a sale. It’s not like a homerun, but it is very advantageous for folks who are founders and stuff like that.

Rob: Sir, thanks again so much for coming on the show.

Patrick: And on tax havens.

Rob: And on tax as well. I think if a bootstrapper or anyone selling a company hasn’t heard of it and it becomes intriguing, I think it’s nice to spread the love.

Patrick: Totally.

Rob: You are at @patticus on Twitter. You are now the CSO of Paddle.

Patrick: I already changed it.

Rob: That’s pretty cool. I saw that on Twitter, and it says formerly ProfitWell.

Patrick: Chief Strategy Officer. As Matt from Summit says, it is the black card of executive roles, apparently. I have no direct reports. I gave up my last direct report last week. It’s crazy.

Everyone, if you’re early in your business, you’re like, why would you ever want that? It’s like, well, just keep managing people. It’s hard. Yeah, it’s really hard. Awesome, brother. I appreciate you, man. I will say it.

The MicroConf community and you, personally, just been so huge in teaching me so much. Just thanks for doing all that, because would I be here without it? I don’t know, but definitely, it would have been a harder path. I appreciate you, man. I appreciate all the stuff you do.

Rob: Thanks so much, man. I really, really do appreciate it.

It’s quite a story. It’s a real testament to bootstrapping that someone can build a company and exit. At this level, I’ve ceased being surprised by these exits. You see, Mailchimp is $12 billion. There are many bootstrapped companies and mostly bootstrapped companies that are having these seven, eight, and nine figure exits.

As I said, it’s a real testament to the capital efficiency of being able to grow a company like this without having to raise massive amounts of funding. It’s a testament to the subscription model of SaaS. I call it the business cheat code that we get for free, because recurring revenue is so incredibly powerful, and it’s so valuable as a driver of enterprise value. 

Thanks again for joining me this week. This is Rob Walling signing off from episode 611. I’ll be back in your ears again next Tuesday morning.

Rob: They’re commenting on things that they haven’t themselves done. I think it is easy to follow a path of too many voices and too many people saying too many things trying to be experts. That wasn’t necessarily the case. There was a lot less valuable information back in the day, but the couple sources of it, at least, you could probably trust that they were valid and that they were giving you good advice, versus today where you really have to separate the wheat from the chaff.

This just might be another episode of Startups For the Rest of Us. I’m Rob Walling. Thanks for joining me today, I’m doing a Rob solo adventure. I’m going to be talking about four topics. The first is the benefits—even for software founders who want to start their own company—of working a day job.

The second topic is bad habits I learned as a solopreneur. Then I’ll talk about why the college dropout narrative is such an annoying […]. Lastly, I cover, what would I do if I were starting over today? I get asked that question now and again. I’d like to have a more or less definitive answer to share with you today.

My first topic is on the benefits of working a day job. Even if you’re going to be a founder, you’re going to start your own company. There are tremendous things that I have learned and I’ve seen other founders learn at day jobs, at full time jobs. Frankly, ideally working at a startup. I think you can learn some good, but some bad habits at Fortune 5000 companies, at large companies.

The good habits often are process and structure—how to work with others and structure of the company. Really, you think about how they hire, how they retain, how they train, and how they evaluate. There’s all this stuff that you can pick up. But I also think you learn a lot of bad habits there about moving slowly and taking six months to ship something that should probably take a month and bureaucracy, politics, and all these things that we don’t like.

In a perfect world, I would honestly say I think you’d get more benefits out of working for a startup. This doesn’t need to be a venture-backed startup. How many thousands of bootstrapped and mostly bootstrapped startups are there in the world that are hiring developers, designers, customer success, sales, or whatever. I think there’s a tremendous amount that you can learn from having that day job.

Do I wish that I’d never had a day job? Pretty much. I wish I’d started a company in college and then it had taken off. We’ll get to that in the third topic of today. Dropped out of college and never had to do the unhappy slog that I endured working day jobs. I didn’t hate all my day jobs, for sure.

It’s interesting. When I see founders who have never had a “day job” and have never worked as a developer, designer, salesperson, customer success, or whatever it is at a startup or at a big company, there’s a certain level of understanding of how businesses work and how they should be structured that I know they miss out on.

Again, I’m not saying you have to, but I do want to point out some pros of working a day job because I do think there are a lot of benefits. I’ve kind of run through a few of them, but it’s just general office communication and culture, like when to CC versus BCC, when to put multiple people in the to line of an email, how to run a meeting, how to use Slack properly? These are things that can be taught.

As you grow an org, you yourself should have the basics of this in some type of employee handbook where someone brand new coming out of college or someone who’s never had a day job, if they join your company, you should have a basic explanation of these things. They seem like common sense, but they’re not because when you first start out, you just don’t know.

Other things I learned were how to use basic technology tools. Straight out of college, I worked construction for two years, and then I got a job as a developer. That was when I learned to use tools that are now antiquated, but really, I learned email, I learned basic design skills, and just a lot of stuff that today would be Google Drive, Dropbox, Notion, Airtable, and Trello.

If you haven’t worked at a company, oftentimes, you just won’t be exposed to these tools. It’s not that they’re that hard to learn, but there is a ramping up or a learning curve. If you go out and start your own company, you don’t know these tools exist. Obviously, Drive and Dropbox, but maybe you’ve never heard of Notion or Airtable because you just weren’t in those conversations. That can make your founder journey, your startup journey, a little more difficult.

Some other things that I learned were how to structure teams. Whether it’s all developers on a team or a developer paired with a UX person, a designer, or a product person in these little pods, they’re just job titles in general. Why shouldn’t we make up our own job titles? There are a bunch of reasons for this. I probably am not going to go into them here in the interest of time, but making up your own job titles is a mistake. That’s something you’ll learn if you work for a company.

How to hire? I was involved in the hiring process. Even before I started a single company, probably 30 different hires, which means I literally did hundreds of interviews. I used to do the initial phone screen. We were at a credit card company and I would do the first 10- or 15-minute phone screen just to make sure someone was reasonable and should be brought in for an in-person interview. We had an office in Los Angeles.

Just learning that hiring process, being part of it, learning how to evaluate people, and then making a thumbs up, thumbs down decision. That was a skill that I had to learn. It was not there from the start. When I became an entrepreneur, it was really nice to have that skill.

Firing is another one. If you do get into supervision or management, you’ll learn when you should fire and you’ll learn how to fire. Leading, managing, I could keep going for a while. But the bottom line is, I think if you are working a day job or you are a freelancer right now and perhaps you don’t want to be and if you want to have product income, I would say, absolutely go for that.

Is it better on this side, is it better on the other side? When you’re an entrepreneur, a founder, and you are basically calling your own shots and fulfilling your own destiny, in my opinion, it is. I would never go back. But I also think that you should do what you can to learn about companies while you have the chance. Look at the silver lining of your situation. Even if you don’t love that day job and you want to escape it, there is so much that can be learned by working for an organization.

The second topic I want to cover is some bad habits that I learned as a solopreneur. I read The 4-Hour Workweek in 2007. I was already trying to be a startup founder and entrepreneur. In fact, there was an email artifact that I read here on the show 50, 70 episodes ago. You can actually search for Email Artifact from 15 years ago. I think it was the episode title.

I was talking in there about just how early and nascent things were 15, 20 years ago. When I read The 4-Hour Workweek, it made me realize, oh my gosh. I had this realization that I should go hire VAs. I was still doing email support because I had a product that was working when it came out.

I believe The 4-Hour Workweek came out in 2007. I already had DotNetInvoice. I was doing all the work myself. In The 4-Hour Workweek, the big lesson I took away from it is delegation. I did appreciate that lesson because I didn’t realize that I could hire people for so cheap.

I was imagining trying to hire someone in the US to do support on this little product I had that was doing $3000 a month. It just wouldn’t have made sense. But to hire someone part time overseas who could do it was incredible.

There are a bunch of benefits that I learned from being a solopreneur, for sure. I was learning everything and doing everything on my own. One of the big drawbacks for me is I really got stuck with the idea that you should hire task-level thinkers, and it trained me poorly to scale. It trained me that looking for cheap resources, whether it’s junior people or whether it’s folks that are overseas, was the way to go. That was the scrappy bootstrapper thing to do.

I think in the early, early, early days, it was. When I had my first $1000, $2000 of income, it was. But I then didn’t make that transition to realizing, you know what, I should spend more and I should hire project-level thinkers, owner-level thinkers. It took me a decade at least to make that decision.

I’ve talked about it here on the show that one of the hard parts of running Drip in the early days is that we were cash-strapped, so I hired all junior people and we trained them up. Many of them were project-level thinkers. They were great, great people. They were good at their jobs, but definitely, that frugality seemed clever to me at the time. For a while, it was. But it was a bad habit that I had to unlearn once I was growing a company that was growing at a pretty strong clip.

The other side of that is I learned the ability to delegate as a solopreneur, but I kept that idea in my head that I was always responsible for everything. It all came back to me that in essence, I was the owner-level and the project-level thinker. I think learning earlier that I can hire folks who could handle larger projects would have made my entrepreneurial career a little easier.

While I was running these small, amazingly profitable lifestyle businesses, it was great. It was a skill set. I could bring people on, they did tasks, and I kept them very profitable because they were just contractors. But the moment that I did want to grow that team and hire full time, I was not as prepared for it as I would have liked. It took me a while to make that transition from more of the lifestyle bootstrapper to an ambitious, growth-oriented bootstrapper. It’s different skill sets.

Dan and Ian talked about this on the Tropical MBA last few months about what made them super scrappy and clever in the early days actually was an anti-pattern that it became detrimental to them down the line. I guess that’s really what I’m saying here today.

My third topic is about why the college dropout narrative is annoying […]. Here’s what I’m talking about. I read a headline the other day that said, The newest billionaire in China is a 23-year-old college dropout. It’s a headline and it’s clickbait. It just doesn’t mean what it used to.

I think in the ’50s, or the ’60s, you’re going to college and you’re dropped out, it was a huge deal, like, what are they going to do? They’re going to be an alcoholic, they’re going to just travel Europe and do nothing, and waste their lives. Today, it’s not the case. You’re not dropping out because you couldn’t hack it. You’re dropping out because you built a business that’s taking off like a rocket ship. You can always come back to college, you can start another company, or you can get a job with the skills that you’re building.

It’s more of a rant than anything. Every time I see this now. I’m like, someone was a college dropout. If I’d built a great business, I would have dropped out of college too. Then I would have gone back if it wasn’t successful. The downside of this was just so low that using this phrase, I feel, is disingenuous.

In fact, I would attest that if you start a business, and it takes off, you are in college, and you’re making a full time income or more, if either of my sons did that, I would say, drop out of college, man. Stop going to college and follow this path. You might have lightning in a bottle here.

Most people start multiple businesses in their lives. Most entrepreneurs start multiple businesses. Right at the time when you’re getting enough confidence as you’re in college to kind of risk it on your own and your parents are no longer forcing you to go to school, I don’t see what other alternative you would have.

I do. The other alternative is to let the business flounder, be part time or whatever as you continue to go to college. There’s a whole other conversation about the worth of college and how the cost in the US compared to the actual value it gives. It’s not at all what it used to be.

My wife and I have had this conversation with our boys about there is college money if you want to go to college. I think there are developmental reasons to do that. But also, if you decided instead you wanted to start a company, we will angel invest in you.

We will make sure that you can do this if this is something you’re passionate about, you have some traction, and you’ve shown validation, I don’t see why we wouldn’t encourage that. I think college is now one of many paths that can get you where you want to go because the world’s changing and the old scripts are now, I would say, much less valid than they used to be.

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My fourth and final topic for this episode is, what would I do if I were starting over today? This is a question that I often get if I’m on a podcast or I’m doing an in-person talk. I talk about the recent successes or whatever and someone will ask that. Like you’re 21 and you’re starting over today, what would you do differently?

Sometimes I think it’s asked kind of in a trolling way of like, well, you’re successful, but we can’t relate to that. I can’t relate to that because I’m not successful yet. I would say, mostly because you haven’t put in the work. It’s probably my assessment of folks who asked it in that tone.

I do think there are a lot of folks who are genuinely asking. I think the question should probably just be rephrased. What should I do? I’m a 22-year-old and about to graduate from college or I’m a 19-year-old and I want to start companies. What should I do? I actually think that’s just a better question because what would I do if I was starting over today?

I do want to point out that this is different than if you were to ask me, if you were going to start your next SaaS, Rob, what would you do? Because I have a whole mental framework of, I don’t plan to ever start a SaaS. But if I did, there’d be a bunch of stuff I would do. It’s not what I would recommend if you’re a 20-year-old, 25-year-old. Really, age doesn’t matter.

I’d say an inexperienced startup founder who wants to make it, who wants to launch a product and support themselves full time, or maybe have a multimillion-dollar business and bootstrapped or mostly bootstrap this thing. When I think about it, I really think about a couple of options, and it’s within the stair-step approach. What I did was the stair-step approach. One key of this is I worked my ass off.

I think a lot of bootstrap founders who become successful don’t have to work that hard forever. But in the early days, you’re probably going to be doing nights and weekends, unless you have a really nice arrangement. I wasn’t lucky enough to have that. I think that’s just something that’s going to take. It’s going to require working hard.

I love the framework of the stair-step approach to bootstrapping because I have seen so many founders do it. It’s a nice, predictable on-ramp into working your way up. We’ll go through these two options. Option one is something that I did. I’ve seen others do it, but most people don’t want to do it.

They think of reasons not to do it. Some of those might be valid and sometimes I think they’re excuses, but it’s to save up money. It’s to work a day job, save up money, and buy something. Buy something on sideprojects.com, 1kprojects.com, MicroAcquire, Quiet Light, or FE International, and frankly learn marketing from that project.

Ideally, if you bought something with existing traction, you could see what marketing purchase had already worked. You could double down on those and grow it. Most people don’t want to do this because they want creativity, they don’t want to inherit someone else’s code base, or what if I get ripped off? There are all these thoughts. But frankly, buying something saves you 6, 12, or 18 months depending on time building and trying to find product-market fit.

To be honest, what I did is I was working a day job and then I was consulting nights and weekends. When I started out, I was billing $75 an hour for the consulting, then it was $100, and then it was $125. As it went up, I got a stockpile of $10,000, $11,000 in what I called the business account.

Sherry and I talked about it and I said I want to use this to grow a business, whether that means to go full time, consulting eventually, or to buy software products, I didn’t really know. I had never heard of anyone acquiring or doing these small acquisitions. So we agreed that the income that came from my day job went to the personal account, as well as hers. Then anything that I did on the side, I could use to “grow the business”.

What I eventually did was I dropped $11,000 on DotNetInvoice. That had enough traction. There was some SEO. I believe there were some Adwords going on. I don’t remember all the approaches at the start, but I learned some stuff from what those guys were doing about what was working and what wasn’t. There were already customers, and I tripled the price because you should always raise your prices.

I told the story over and over, so I’m not going to go into it here, but it was really an interesting option. Yes, it took time to find it. That one kind of stumbled in my lap. But then I wound up acquiring (depending on how you count) 20, 25 more small online businesses over the next several years.

Some of those were content sites and just barely making hundreds of dollars a month from AdSense. Others were full blown ecommerce sites, SaaS products, ebooks, and downloadable software. I did it many times and I would rehab them. Basically, I was a value buyer and I would rehab them. The profit that came off of those allowed me to quit my full time day job. It is an interesting approach if it’s something you want to consider.

Option two is to build an app for an app store. I’m defining app store as not just iOS App Store, but the Shopify store, the Salesforce ecosystem. HubSpot has one, Zendesk, HelpScout, GitHub, Heroku, Atlassian, AWS, Magento, WordPress, and Squarespace. I could go on and on.

In fact, over at rocketgems.com, an indie hacker and fan of the stair-step approach named Ramy put together essentially an essay called 68 B2B SaaS marketplaces with opportunities for indie hackers. That’s probably what I would do because this is step one of that stair step approach. All you need to know is how to rank in that app store.

As long as there’s enough traffic for it, they handle all the marketing. The distribution is done. You don’t need to think about them. One of the hard parts that we see with a lot of TinySeed and with a lot of MicroConf companies is they have a good product, they’re trying to find product-market fit, but they just don’t know how to market. They don’t know what to try next and they don’t know what to do next.

With this approach, if you can get in and get essentially that free traffic from the App Store, now it’s not free because you’re probably paying them 10%, 20%, 30% of your revenue, depending on the App Store, but it makes things a lot simpler. I think as a permanent solution, if I wanted to build a multimillion-dollar SaaS company, I wouldn’t do this, but this to me is that step one. If I were starting over today, I would use one of these app stores.

They didn’t exist when I was starting out. I am envious of folks who are starting today because they have this benefit. In fact, I’m going to go through some pros and cons of starting companies today versus 10 or 15 years ago.

Me and another old-timer are waxing poetic on the podcast. We say things like, man, remember how easy SEO was 15 years ago? You could just do this and that. It sounds like it was all sunshine and roses. But in fact, it was very much not so. I actually have more benefits of starting today than I do the negatives. There are more pros than the cons of starting today.

One of the benefits is that labor is cheaper now than when I started really in 2002 to 2003, which was when I started launching my first thing. There was no Upwork and there really was no hiring internationally by an individual. It just didn’t exist. The first time I ever heard about it was Tim Ferriss talking about it. It sounded like it existed. People kind of knew about it for a year or two.

Bigger companies had done the offshoring thing, but an individual hiring another individual in another country, there was no Skype, there was no way to communicate with them except email. How would you pay them? There were just so many complexities that don’t exist today. Not only are those things better today, but frankly, labor is just cheaper. It’s a global economy. That wasn’t something that we could do back in 2005, 2010.

The second benefit of today is there is so much more specific tactical information available about how to start startups. You think of pre-this-podcast, pre-Microsoft, pre-whatever. Wherever you go for your resources today, they probably didn’t exist 15 years ago, so I was very much in the dark.

In fact, the way I learned marketing was I read a bunch of internet marketing books, which was like info marketing. Even the old school folks who used to write actual physical sales letters in the ’90s like Dan Kennedy and Joe Polish I think.

I got to be honest, a bunch of their stuff, I’m pretty judgy about it. It did not fit my style. It was way hard selling and their products were not great. I don’t think they were selling info products, really overpriced. I don’t think that a lot of them were fair or 100% ethical. I’m not calling out those two names in particular, but just that space was known to be pretty crappy.

I didn’t have to take that away from it. A lot of their tactics and a lot of their thinking were actually pretty accurate about how to market, how to sell, how to write copy, how to write an ad, and how to give someone some time pressure to buy. There were all types of stuff. That’s how I learned it.

I would just go buy books and read through it because there just wasn’t anything online like you can get today with. There were remote events. There were in-person events. There were articles on Reddit, SaaS forum, and entrepreneurship forum on Reddit. Stack Exchange, Stack Overflow, these things are amazing. There is so much more specific tactical information available today than there was 10 or 15 years ago.

In addition, there are more marketing options available today. When I looked back at the list that was possible back then, it was just a handful. I’m not going to name them all, but you could do cold outreach, you could do SEO, pay-per-click ads became available around there, and then there were display ads. That was kind of it because there weren’t social networks. I guess Hacker News came around that time and there was Digg. These were literally the five or six things that I knew about.

There were obviously in-person events, there’s cold calling, and other things. But for someone bootstrapping a company, you didn’t have access to those more expensive things. The number of options available today with all the social media groups, these places where entrepreneurs, and your potential customers hang out, all the ad networks, there just is a lot more online you can do today. While some of the Adwords and Facebook ads are expensive and they get more expensive over time, I still think there are so many more ways to reach people today online than there were 10 or 15 years ago.

The next benefit of today is these app stores that I already talked about are just an amazing opportunity. I think that goes without saying or I guess I’ve already said it in this episode, but I think that today is where I would be going. In addition, there are more things available to buy. There’s actually a thriving ecosystem with the brokers and the marketplaces that didn’t really exist. I think that’s a nice opportunity, as you heard in option one.

I think another pro is that if you build something, if you build a SaaS app that’s even doing $5000 a month in MRR, it’s sellable today at a really good multiple. Back when I was buying stuff, you could sell it for 12–18 months’ net profit. It was just brutal.

While that is good when you’re acquiring, it’s really tough if you work your butt off and you build a SaaS company for $5000 a month, $60,000 a year. You can sell it for almost all profit. You sell it for $60,000–$90,000, there just isn’t a ton of value. You just have to build up these cash flowing businesses versus today.

Let’s say you build a SaaS for $5000 a month. Again, for easy math, let’s assume it’s 100% profit, $60,000 a year and you sell it a 5X profit multiple, so you’re getting $300,000 for building the SaaS company. Its long term cap gains if you hold it for longer than a year, although that’s not tax advice. That’s just amazing. It’s an amazing nest egg and an amazing way to basically angel invest your way into your next company.

The last couple of pros of building today, there’s a bunch of them. But in the interest of time, one is there are more communities—MicroConf, Indie Hackers, Dynamite Circle, ecommerceFuel, and Rhodium Weekend. There are so many amazing groups of people who are helping one another.

Going back to the tactical information being available, a lot of that is coming from these communities where people learn and are sharing it with one another to make a name for themselves, but also to help other founders. That isn’t something that existed. In 2005, the only two bloggers that I knew that were talking anything about this were Paul Graham and Joel Spolsky.

I started blogging about it in 2005, 2006. The only other people that I can remember the next few years with were Peldi Guilizzoni from Balsamiq and Patrick McKenzie. There was a business that software forums run. Anyway, there wasn’t very much. Now you couldn’t name them all.

I could name everything that was available at that time in less than 60 seconds. Today, we have this embarrassment of riches that I think is beneficial. I think these communities are great for not only the information, but it’s for the accountability, for the ability to say, oh, I see other people can do this. If they can do it, I can as well.

The last pro I will throw out today is there’s just more tooling. There’s just better tooling today to build SaaS companies or to build startups. There’s Rails, Django, and a bunch of new platforms that I’m forgetting. There’s Hotjar, Mixpanel, AWS, no-code, and there’s low code. You can do a lot faster today than you could 10 or 15 years ago.

Let’s look at a few cons. Ad networks are more expensive. Google ads 10 years ago were cheaper. The advice I would say here in terms of ad networks is if you look for newer ad networks, they usually start off with cheaper clicks, and then over time, they become more expensive. That’d be the thinking that I would have there.

The second con is this is more competition across the board. There are more SaaS being launched. It’s an amazing business model. It’s amazingly lucrative and a lot of folks want to do it. There is more competition and more niches. That means there’s more competition in SEO and the marketing approaches and more competition for the same customers. That does make that specific piece harder.

The third thing is that things are moving so quickly, they change so quickly. I’m not 100% sure on this, but I feel like you could have an autopilot business more realistically 10 or 15 years ago than you could today. I think given all that competition, so much is happening. So much has been developed so fast, new features, and all of that.

I think that there’s a lot more happening in a shorter period of time. I think that means that you have to stay moving or else you get caught. I think most people listening to this podcast are probably not looking to autopilot their business. But I do think that with things moving faster, it’s kind of more churn and just more competition.

Lastly, there’s a lot more distraction today, whether it’s social media or just a lot of people claiming to be successful entrepreneurs. At least, maybe they’re not even claiming. They’re just commenting on how you should start a company when they’ve kind of never done it or they’re commenting on things that they haven’t themselves done. I think it is easy to follow a path of too many voices and too many people saying too many things, trying to be experts.

That wasn’t necessarily the case. There was a lot less valuable information back in the day. But the couple sources of it, at least, you could probably trust that they were valid and that they were giving you good advice, versus today where you really have to separate the wheat from the chaff.

I want to leave you with the idea that it doesn’t matter if it was harder or if it was easier 10 years ago or 15 years ago. The bottom line is it just doesn’t actually matter that much. Because if you do want to start a business and want to be an entrepreneur, then you don’t have a choice. You don’t have a time machine. You can’t go back 10 years. It doesn’t really matter if it was easier or harder.

I would say, seize the day. This is why I’ve done 600+ episodes of this show. It’s because I love seeing new entrepreneurs get started. I love seeing existing entrepreneurs start new companies. I love seeing folks able to find their freedom, find that amazing purpose, and have these healthy relationships.

That’s what, to me, bootstrapping is about. It’s about this great equalizer that allows all of us, not just those who can seek venture capital or who can use to be moved to the Bay Area, frankly, to raise a venture, but it allows any of us to start a business that provides for us and provides for those closest to us. All the while, being ambitious with our business but also balancing that with our life, our family, and our lifestyle.

Those were my four topics for today. The benefits of working a day job, bad habits I learned as a solopreneur, the college dropout narrative, how I just don’t love it, and what would I do if I were starting over today? Thanks for joining me again this week. Signing off from episode 610. I’ll be back in your ears next Tuesday morning.

Rob: Welcome back. It’s Startups For the Rest of Us. I’m Rob Walling. Thanks so much for joining me this week. If you haven’t checked us out on Twitter, @startupspod, you get to see every week, a little 60th-92nd snippet of the episodes and their video snippets.

You’ll get to see my cool background with my Millennium Falcon kind of blueprint-ish thing, my Beatles gold record up behind me and of course, The Startups For the Rest of Us episode one album cover, What is a Micropreneur? Thanks to producer Xander for having that LP pressed for our first episode.

This week, I’m diving into listener questions, as always, video and audio questions that go to the top of the stack. You can ask questions by emailing questions at startupsfortherestofus.com or head into the website and click on Ask a Question. First question is from Josh Duffy, a longtime listener. He is asking about whether it’s worth having multiple LLCs.

Josh: Hey, Rob. My name is Josh. I’m the founder and CEO of a SaaS product that I’ve been working on since 2013. We’re currently doing 25,000 MRR and it’s under an LLC. I also have one other super small SaaS product that only does about 1000 ARR. It’s an early side project back in the day that still earned some revenue.

My question is about accounting and bookkeeping. I know you recommend different SaaS projects to have different accounts and everything set up so it’s super clean, so you could potentially sell one of your projects later. I recently spun off a module of my larger SaaS project last year into its own standalone SaaS.

It’s starting to take off. We’ve got five customers so far. I’m curious, just with all the effort involved, if you’d recommend making this transition at 1000, 5000, 10,000 MRR, or maybe once you have some product/market fit and when it lines up with a fiscal year.

A follow up question, would you recommend having separate LLCs? I’m a solo founder, so separate LLCs that are just owned by one holding company for tax simplicity. I’d love to hear your thoughts. Thanks for everything you do. I love listening to the show. Hope you have a good one. Thanks.

Rob: Thanks for the question, Josh. That’s a good one. I should start by saying I’m not a lawyer, not legal advice—all the usual caveats. I will say if I was in your shoes and I only had one SaaS app, so I did not have the 25,000 MRR app, but I just had one doing 1000 ARR, I personally don’t even think I would have an LLC.

In California, the fee for an LLC is $800 a year and other states vary. But just the headache of having to set up the legal structure and maintain it, personally, it wouldn’t be worth it at that point. I would just let it flow in the US. It flows to your Schedule C, I believe it is, on your taxes, so that revenue just almost comes in like 1099-type revenue.

Given that you have a business that is already under an LLC on its own, I would consider just having this side business just go to the Schedule C. Obviously, you’d want a separate bank account for it and I’m assuming a separate Stripe account. The cost, the headache, the hours of filling out LLC filings, and all this stuff—I act like it’s perhaps more than it is. I’ve had several LLCs running at once, and it winds up being a pretty big headache.

Personally, unless there was a compelling reason or I felt like there was extra exposure, because LLCs are supposed to offer you this exposure or this firewall between personal and business stuff such that if the business gets sold, they can’t pierce it. Single member LLCs, I’ve heard they often get pierced and in certain states, they just are viewed as it’s a personal thing. It’s a shield for shield’s sake, so they pierce it pretty easily.

I don’t know. I would either just have it on my schedule C and own it personally. I guess you could attach it under the other LLC, which is fine. I guess I don’t see much reason to do that if you don’t need to, because it does muddy the waters if you ever want to sell that 25,000 MRR app.

It’s all clean right now. Adding another product in there, if it’s not affiliated with it or you don’t have to sell them both at once is all doable. It’s not that big of a deal. But personally, I’d probably just have it as a side thing, much like I owned half a dozen websites back in the early 2000s.

They were throwing off hundreds or low thousands of dollars a month. At the time, I didn’t have an LLC. I had a consulting LLC that I was using. Even that I did consulting work for four or five years before I started the LLC, and I was doing six figures. It was just going to me personally.

It’s great. If you can get an LLC in place and get all that stuff in place, it’s fine. I do think some people will kind of pre-optimize some of these things, where if the business never does anything, then you have to shut down the LLC, and that’s even more paperwork and time that you have to spend doing it. Thanks for the question, Josh. I hope that was helpful. 

Our next question is a video question from Ruth Maine.

Ruth: Hi, Rob. My name is Ruth. I’m actually calling in with a question for my husband as even a little bit of a surprise for him. I don’t know if he’ll end up on the show or not, but he runs his own business, a software that helps run livestock shows. His name is Josh. He’s been listening for a long time. He got me hooked, even though I’m not a software person at all.

He’s just really in the grind right now. He’s a few years in. The business is going really well, but he’s just sort of constantly inundated with little fixes and support issues, even though he has a few people helping him part-time. That is just a constant stress that never allows him to have the freedom at the time to work on improvements and updates that would alleviate some of those problems. It feels like he’s in a cycle of just constantly trying to keep up and keep his head above water versus being the head.

If you just had any tips or encouragement for how to make the time to make those needed updates when it feels like you don’t have time. I know you’ve talked about this a lot, so it’s not really a new question. Just looking for a way for him to have that time and to encourage him in that direction. Again, his name is Josh. He runs an app for livestock shifts. Thanks.

Rob: I love this question. Thanks, Ruth, for sending it in. Hi, Josh. I hope this is a nice surprise for you. What a nice gesture for Ruth to send that in. I love it, Ruth. You said he’s got you hooked, even though you’re not a software person. That’s the cool part. Startups For the Rest of Us can be just about entrepreneurship for a lot of people.

I know many non-software founders who’ve never planned to launch software companies who can apply the lessons that we cover on this show to their business. Yeah, this is tough. Honestly, I feel for Josh. I think the idea here that I have is, if he already has some folks helping him part-time, are they task-level, project-level, or owner-level thinkers? Because back in the day, I had eight or nine task level thinkers.

It was great. They were inexpensive. I was doing the four-hour work week thing. The problem was I was the only one that was thinking about projects, and certainly the only one thinking at an owner level. Anything that wasn’t within this really well-defined process bubbled up to me.

That got really old, and it wasn’t fun. My four-hour workweek, which was actually 8-12 hours a week at the time, was filled with a bunch of crap that I didn’t want to do. It wasn’t interesting work. It was answering questions that frankly, a project-level thinker could have answered.

Eventually, I had the budget to then hire someone who was more of a project-level thinker who could manage and deal with a lot of the task-level thinkers. I’m wondering if that’s perhaps an avenue that Josh could go down. I think a lot of us make the mistake of hiring too many junior people, because they’re less expensive, and you meet a person who has this great attitude, and maybe they’re your friend or maybe there’s someone you get along with, and you’re like, well, I can teach them to do this.

You’re right, you can. The problem is it slows you down. Then you essentially become more than just their supervisor, their boss. You become almost a mentor, and they turn to you for a lot of things that a senior person may not do. I wonder if there are these bug fixes and support issues that are coming to you. Is there a way to hire someone who is more of a mid-level or a senior developer who can handle these things?

Really, there are two ways that I’ve heard about it. One is the way that I structured it at Drip, which was that we had a junior developer. They were assigned all the customer-facing stuff. They were level two support. Level one, tier one support was our support person answering email.

If there was a technical issue, they couldn’t troubleshoot, and then they would escalate it to this junior developer who would then dig into the code, figure out how to fix it. If they needed to rely on a senior dev to get input, then they would. But if not, they would push that pull request, push it for a review, and then we push it and the bug will get fixed without a senior dev ever having to get involved. That’s how I’m thinking about Josh being the senior dev in this case, where he can consult or he can offer advice, but really, someone who is more junior might be driving that fix.

The other way that I’ve heard support and bug fixes handled by dev teams is that it rotates. Every week or every two weeks, one developer is basically assigned all the tickets that are coming in. The support person or team knows who is on call, in essence, and those are funneled to that person. It’s good practice to continue to be in the code base and answering support tickets.

It’s not something that a senior developer wants to do 40 hours a week. They’re there to write code and build things, so there’s this balance. My gut is that Josh, you’re hanging on to too much stuff. I know you’ve heard me say it, but you have to figure out how to not just delegate tasks, but actually start to delegate ownership, and delegate project-level thinking and initiative.

Whether that means not having a few people and just consolidating to one person who’s helping you or that means rotating these responsibilities through your team to where support tickets don’t always go to you, you can’t just be the frontline and take the bullets all the time. You can grind it out, and you know how to do it, but it’s going to lead you to burnout. It makes it hard to lead a normal life. It makes it hard to relax in the evening when you’re hanging out with your friends or when you go on vacation with your family. You’re constantly thinking about your business because it relies so much on you.

I’m guessing you’re in a relatively early stage. I don’t know the stage of your business. I don’t want to act like you can just hire five people and hand it off to them. I realized that’s not a realistic approach for so many bootstrappers. It’s the approach that I had to take. I had to be the backstop.

Over the years, I learned that the more I was able to delegate, the more advanced project and owner-level thinkers I was able to hire. The more senior people, the better off I wound up doing. Thanks again, both Josh and Ruth. I love having you too as listeners. It’s a good question. I hope that was helpful.

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Matt: Hey, Rob. This is Matt Lasker. Thank you so much for letting me ask you a question. Really, I want to say I appreciate everything you do for founders like me out there trying to help us find our way through this process.

We are really wanting to know or get some advice about the MVP process development, in particular. We are trying to build an app that helps coaches, help their players, engage with their playbook. Right now these coaching apps are nice and beautiful, but they’re really made for the coaches. There’s really little engagement from the player’s side. We want to create a game, a mobile app that players can play, but it’s based on their coach’s playbook, basically.

We’ve talked to a lot of developers. We keep getting the same amount of cost right around $80,000-$100,000, which is not realistic for us to make our MVP. We are definitely of the mind that we want to make this MVP with a few core items, so we can get it out in front of players and coaches and let them tell us how to make it better. $80,000 is just not really realistic for us on that.

We did find one company that specializes in rapid prototyping that can do it for even less than half the cost. It’s great, but they are very adamant that this is not a long-term product that we can sell. It would take some additional development or just scrapping it, and then finding money to build the whole new real application afterwards.

I’m just having a hard time balancing that in my head—$40,000 for a prototype, we want to prove it. It seems like a lot, especially if you layer on the fact that we probably won’t see any value after that. Obviously, proving the concept is invaluable. I get that. I’m having a hard time quantifying that, so I’d love your opinion.

Rob: Thanks for the question, Matt. Yeah, this one’s really interesting, especially a tough question, because it’s a lot of money to put at risk. Given how startups are so unpredictable, and that the odds are that they probably won’t work out, you’re going to be selling to schools, I’m guessing. I can’t imagine.

Maybe the coaches themselves or I don’t know if the school is going to have to approve it, but it’s tough to get money out of schools often. I guess I don’t want to go down the road of thinking through the business case for this. I really do want to just answer your question about getting the MVP out.

It pains me to think of you spending $40,000 or $80,000 of your own money to prove an MVP. I think that’s what you’re getting at as you have that same feeling. Typically, in this case, what I see is that either the person, the founder, or you, learns how to code well enough to build something that people can use.

I would say I’ll build prototypes and show them how it’s going to work, but I get it. It’s coaches and kids or coaches and players. I don’t know if you’re talking major leagues, college, or whatever it is, but they’re going to have to see it in this case.

I’m wondering, as a founder, a lot of folks are able to put these out because they do learn to code just well enough or they bring on a co-founder who can build it, which is a whole other podcast topic to go down. It’s like how you would find that founder and how do you know they’re good.

I would say that there are folks in MicroConf Connect. There are more than 3000 mostly bootstrap founders. Some folks in there, there are a lot of developers. There are probably 80%+ developers, and some folks are looking to come on with a non technical co-founder and team up. I don’t know if it’s the hiring channel.

Honestly, if there’s a co-founder channel, I’m not in it at this minute, but that’s an interesting thought. You have to bring something too, which I think you’re already doing. You have to bring some validation and the leads, and that you’re going to sell, and all this stuff  in order to ask a developer to spend X amount of months, $80,000 worth of months to build up the app.

The other thing I was thinking about is, there’s a bunch of no-code app builders. I’m not an expert on these. While I wish I could recommend one to you, I went to Google and typed in no-code iOS app builder. Of course, there are these lists of the top 22 iOS app builders. Each of these is going to have a limited feature set. It can do one, two, or three things, and that’s it.

It’s not going to be completely custom. But I would ask myself, is there a way where I could build enough of an MVP with one of these app builders to use that as the MVP, or is there a way I could hire someone on Upwork or find them in MicroConf Connect, who is a no-code builder, and pay them for a few hours of of consulting to say, is this even possible? What could we build with no-code, given your knowledge of these tools?

I had Helen Ryles on this podcast. It’s probably 12, 18 months ago. She’s a perfect example of someone who knows no-code really well. Someone like her or someone you find in the no-code space, it’s a great community in general, I think could be beneficial to give you an idea of if you spend a few $100 to get a yes or no, because then that idea may be harebrained or it may be the solution to all your problems, so to speak.

The only other option I can think of is, is there a way that you don’t build it as an app, but that you build it as a mobile responsive web app. Then you don’t have to go through the App Store. It’s just a URL that the coaches would hit to log in and do things, it is a URL that the players would hit to see the playbooks or whatever? This may be reaching.

I’m really just spitballing here. The reason I throw that out is because I think that building a mobile responsive web app is going to be easier, and you’re going to get more functionality than if you try to build an actual iOS, and God forbid, also an Android app if you need something to be compatible with both. I know a lot of the app builders do both. I just know that once you get into the mobile app world, they are more complex and more challenging. I think there are fewer people with that expertise than there are who could no-code build a web app.

When I hear $80,000 to $100,000 to build a working prototype, that sounds insane to me, like so expensive. I think, what if it was a web app? Could it be done for a 10th or a quarter of the cost? In my experience, probably finding a good freelancer through recommendation. Again, I keep saying MicroConf Connect, because that’s where there are 3000 SaaS founders hanging out who were bootstrap and mostly bootstrap, who listen to this podcast, and who are helping each other out with this kind of stuff.

Whether you found a freelancer there or you found a recommendation to one, that’s one way to go. You could also go to Upwork. You can go to Indie Hackers, go to the Dynamite Circle. There are a bunch of communities where folks are going to be able to help guide you. I’m glad you wrote in with this, because I’m sure there are other people out there with this exact question.

I think my reaction is, oh, my gosh, these numbers just sound expensive. Of course, hiring a full service agency that’s going to deliver everything, yeah, I get it. I ran a micro-agency back in the day, so I know what the margins aren’t and how that works. But paying this much for an MVP, unless it’s really complex, feels like the funded approach to doing things. It’s not the bootstrap, mostly bootstrap capital efficient way.

Hopefully, that’s why you’re asking me, because I’m trying to think of how I would have done this years ago when I didn’t have that kind of money to drop on a prototype. There’s a lot to think about here, Matt, but I appreciate your question. I’m glad you wrote in. I hope some of those ideas were helpful.

My next question is from a longtime listener named Scott. He’s asking about transactional and marketing emails, whether they should be on the same domain. He says, “We’re a startup. We’re getting ready to start sending more marketing emails very soon. Should we be using the same domain name or dot-com for corporate emails—that’s your internal emails you would use in Gmail, Google Apps, Suite, Outlook, whatever you’re using, marketing emails—you all know what those are, Drip, MailChimp, et cetera, transactional emails—these are emails that are sent if you’re a SaaS app, you’re sending billing receipts, or you’re sending onboarding emails, or you’re sending notification, hey, someone just signed up for this or that.”

“The question is, should we be using the same domain name or dot-com for all three of these? If not, what is the best strategy? We’re already using the dot-com for corporate emails. Should we create emails as a subdomain for transactional marketing or both? I thought maybe some of your Drip experience might come into play here.”

Of those three, the biggest risk is marketing emails. Honestly, usually, I would send all of them from the same domain. I’m just not that worried about it. The place where I would tend to break them into a separate domain is if you’re sending a cold email, because that is where you’re going to get the spam complaints, and that can impact your sending strategy.

If you don’t maintain and might be mindful of the health of your marketing list, it can as well. The most dangerous one is marketing. If you want to separate that out, you can. But I’ll admit, it’s not something we did with Drip. It’s not something we do with MicroConf. It’s not something we do with TinySeed.

To be honest, corporate and transactional emails winding up in spam is pretty low, because they’re so targeted. It’s an it-depends, risk tolerance, blah, blah, blah. But most companies that I see have their corporate marketing and transactional emails all on the same domain, and then they start thinking about it when they’re sending cold emails. They start thinking about breaking it apart. Thanks for that question, Scott. Hope that was helpful.

My final question of the day comes from Philippe, who’s asking about planning for a very large project. He says, “Hey, Rob. When starting up a project, do you have any tools you like for organizing the steps of the code? I’ve always just cranked out hours and hours of code, but I’m wondering if there are tools that you like to perhaps tying to Gmail or just how to plan for a project started from scratch? Do you lay out in a calendar, which features need to be built by which date? Do you have something that allows the UX team to run parallel to the dev team? I tried Trello, but didn’t really like their UX. The ideal solution, I think, would be some sort of to-do list that ties into a Google Calendar. Thanks for your help.” Interesting question.

I have never had anything that tied into a calendar. Back in the day, I used to use an Excel spreadsheet, and then moved to Google Sheets, where I would have each feature, and then my estimate, and then how many hours I put into it, and how many hours I thought were remaining.

There was a count date feature. It would add up all the hours. It was a workday, I think it was. It would add up all the hours and tell me what day based on these estimates if they were accurate when it would be finished. It wasn’t individual. I didn’t calculate it for each individual feature, I guess you could. That’s a pretty simple way to do it.

In fact, Joel Spolsky has an article on his spreadsheet. I just took it and edited it. I loved that when I was consulting, because it would give a pretty good idea. I would do my estimates, and then I would submit them to the client. Hey, this is going to cost $40,000, and here’s why because here’s the hours we’re throwing at it. Then I could see if we were on track ahead or behind. It was a very simple way to do it. I really enjoyed it.

These days, there are other tools. Bottomline and GitHub Issues is one that is really good. In fact, it’s what we ultimately wound up using at Drip. We had an engineering team of 18, 20 people by the time we left. We had a UX team and we had all types of people working in tandem. GitHub Issues was what we rolled that on, so I think you should definitely look at that.

What I don’t remember is if there were calendars tied to it, because we worked in sprints. I forget if it’s two or three weeks. We didn’t say this feature was done on this day. It was kind of like once it was done, then it was QA’d, and then it went through a code review, and then if it was complex, we put it on staging. Otherwise, we push it to production.

There was this process that we had, but we didn’t try to pinpoint it down to exact days when exact features were going to be complete because we just didn’t need to. We pushed it to production as many times a day as we needed as features were complete. There was no reason to plan to that level of specificity.

Other tools people use include Jira from Atlassian. That’s a bit of an older tool. I know that a FogBugz back in the day, also an older tool, is what we had used before GitHub Issues. In fact, we actually used codetree.com, which is a tool Derrick built on the side while we were building Drip. He later sold that.

I interviewed him about that very process on this podcast years ago. He sold CodeTree, so there are new owners now.  It’s basically built on top of GitHub Issues, and it adds some extra functionality. That’s an interesting play.

I’ve heard some folks use Trello as well, and then Wrike is another one of those. Boy, there’s Asana and Basecamp too. Some people use them. Basically, I could probably rattle off 100 different tools that are focused on this niche, because there’s not much of a niche.

It’s a very horizontal play, there are a lot of software developers in the world, there are a lot of software projects, and there are a lot of tools. I don’t want to overwhelm you, but there are many, many tools that are built almost exactly for this use case that you’re describing. I’ve tossed out a few of them here today. I hope that was helpful. Thanks for the question.

That wraps up our episode for today. Thanks so much for joining me this week and every week. This is Rob Walling signing off from episode 609.

Rob: Welcome back to Startups for the Rest of Us, episode 608. I have quite a story for you today about Adrian Rosebrock, who bootstrapped and exited a seven-figure info product called PyImageSearch. 

No, it’s not about finding pumpkin and apple on, when is it? March 14? Yeah, March 14. It is about visual image detection and image classification in Python. This is really an incredible story of how Adrian graduated with a PhD in computer science with an emphasis on digital image processing and recognition and how he didn’t like his day job. 

He started a blog and he just stairstepped his way up. We’ll talk about stair stepping. We’ll talk about how Adrian discovered this podcast back in the 2010, 2011 time frame and how that led him down this path of bootstrapped entrepreneurship. 

It’s a pretty incredible story in the sense that he had built this info product up into the lowest seven-figures with essentially—I think his team was three people. It was just minting money into his personal bank account. 

Then in 2020, 2021, he had that epiphany that maybe he wasn’t learning new things anymore. I asked him that straight up. A lot of folks listening to this podcast would love to have an app or an info product doing seven figures a year and throwing off, I conjecture 80%, 90% net profit. But he wasn’t learning anything. Like startup founders, we have to know when to say when and when to move on. 

With that, I hope you enjoy my conversation with Adrian. Adrian Rosebrock, thanks for joining me on the show. It’s been a long time coming, sir. 

Adrian: Thank you, Rob. It’s just an amazing pleasure to be on this podcast. 

Rob: Yeah. Correct me if I’m wrong, but I believe we became acquainted, maybe, it would have been 2009 or 2010?

Adrian: Something like that. It’s been over 10 years at this point. 

Rob: Yeah. We can talk a little bit about it as we get into the interview. You were one of the very early folks who kind of stumbled upon what I was doing with my blog and then the Micropreneur Academy at the time. It was basically an online course or a series of online courses about how to be a developer and launch products. 

These days I focused on SaaS. Back then, there were info product folks in there. There were mobile app developers. There certainly was SAS, I think we were starting to call it then. There was downloadable software, there was all kinds of stuff. 

I’m curious how you found that. How did you find me and kind of this bootstrapper in this community? 

Adrian: Yes. I wish it was a more interesting answer, but it’s not. I was on the entrepreneur subreddit and somebody posted a Top 10 List of Podcasts and Startups for the Rest of Us was on that. I downloaded a few episodes and it clicked. You feel like you develop a rapport with someone quickly, and then it just really resonates with you. That’s exactly what happened with you and Mike.

When I was just getting started, I’m like, wow, I can relate to these guys. I really understand where they are. I didn’t feel like you guys were bragging or anything about your accomplishments. You get some of these entrepreneur podcasts and people just want to just show off and really highlight themselves and their accomplishments. 

With you and Mike, so humble, so relatable, and that really resonated with me. It was just two guys having a conversation and you were learning from it the entire time. 

Rob: That’s cool. Especially, kind of the info marketer or the information marketer space in the 1990s was the sales letters they would mail out. Then in the 2000s, they kind of moved online, and it was always the guru. It was always that person who was selling who was the guru.

I was always kind of annoyed by that because I thought, can’t you just be a normal person, be successful, and teach? 

It’s cool to hear that resonated with you because that was the point. I’ll admit, if I go back and listen to the first 10 episodes, I’m a little bit guru-ing. A little more than probably I should have because I just didn’t know any other model. But we quickly became ourselves.

We’ll talk later about Info Product Mastery, which is your podcast that launched a couple of weeks ago. Is that something that has impacted your approach to teaching? We’re going to dig in today at PyImageSearch, which is a company built to seven figures in revenue and had a life changing exit last year. 

I have to imagine that perhaps your take on teaching was influenced by—whether it’s Startups for the Rest of Us or other folks—who you relate to. 

Adrian: Absolutely. I have a PhD in Computer Science. I studied computer vision and machine learning in school. That’s writing software that can understand what’s in an image, such as face recognition.

I studied this in school. You have to understand that just because you have a PhD in computer vision, it doesn’t mean you understand the entirety of computer vision. You likely only understand a certain very small facet. 

But by teaching it, you’re getting all these questions and you honestly may not know the answer to. Now, the difference between someone who’s a PhD is that they can likely read a paper or two and get up to speed very quickly. 

That’s the situation I was in. But I certainly had to be humble with myself, lower my ego, and say at times, I don’t know the answer to that question, but I’m going to add it to my queue of blog posts and I’ll see if I can cover it in the future.

It became a tremendous learning experience for me. In school, I learned the theoretical, I learned the mathematics, I was writing papers, I was reading papers, but I wasn’t necessarily learning a lot of practical implementation side of stuff. 

As I was running the blog, I was able to actually write the code to figure it out, then hand it off to people, and be like, this is the code that you can use to solve this specific problem. Here is a line by line explanation of what that code is doing, and you can integrate it into your own projects. 

That taught me just as much as it taught the people who are reading the blog. It made me that much better. That wouldn’t have been possible if I didn’t lower my ego to really accept that there are a lot of blind spots that I didn’t know. 

Rob: Right. I think a listener who doesn’t have a PhD, maybe like myself, we always joke that I’m usually the least educated person. I went to public school and got a bachelor’s, least educated person in most rooms I’m in. 

You got a PhD and I think people might say, well, that’s it. You’re kind of set, right? You have the doctorate and you’re going to go do your thing and make a cajillion dollars. But, what didn’t match up there? Why did that script not play out in your life?

Adrian: It was weird. I’m always drawn to doing really challenging things, whether that’s building a business, getting an education, or getting a PhD. I felt like I was constantly being pulled in two different directions. 

Throughout my undergraduate years, I was working in a small business. I work for a company that was acquired. I was there for five years, started as a junior developer and ended up as a senior developer. That exit actually paid for my college education, which was an amazing blessing that I had while in school. 

At the same time, I was just drawn to this idea of getting a PhD. To me, it was almost like playing the market. It’s almost like a stop-loss. You put your investment in, but you immediately know what that stop-loss is. You can exit. 

That PhD was kind of my stop-loss because I knew it was security, that if anything bad happened in my life, I could always go back and teach. I could go back to a public university or a community college, teach, and still be able to make a living. That was my safety net. 

It was also extremely challenging. That kept me on board, going for it, and fighting for it. 

To be honest, by the time I was midway through my PhD program, I was well aware that I wasn’t suited for academia. I wasn’t suited for research. The double-blind peer review papers system, it works and it’s also extremely broken at the same time.

I didn’t like that I would write content that could help others, but it would sometimes take years to publish and tons and tons of revisions. It didn’t sit well with me. I knew that I needed to be in an industry where we can iterate faster. We could release products and help others along the way.

Rob: That’s also an issue Sherry had with academia. Most people listening to this know she got a PhD in Psychology and she interned at Yale. Then she was like, “This isn’t what I thought it was going to be and wind up doing a postdoc in the Boston VA.” 

Then I was like, “Well, the research stuff, the publishing is just a grind. It’s not as rewarding as I hope.” Like you said, it takes way longer than I wanted to. 

Then she became a professor, and even that then had its own thing. She loved the kids. She hated the meetings, the committees, and the politics. Unfortunately, it’s politics. It’s a big, old institution. She eventually comes out and becomes an entrepreneur as well. 

I think that spirit lives in a lot of people, only some of us are able or willing to listen to that call. The willingness to take that risk is a big thing, and the ability. Sometimes you’re married, you have four kids. You just can’t. I don’t want to play it out like if you don’t do it, you’re too scared or whatever. But I do think that some of us have the luxury. 

I know that I held myself back, psychologically, where I was so unwilling to take on any risks. Realistically, the fallback—like your idea of a stop-loss—my stop-loss was I was a senior developer making low six figures. I could go anywhere and do that. The stop-loss is I could go get a job, which is what I had that day. So, why not go out? Go out and try it. 

That’s what you did. You came out of grad school with a PhD. You got a job and you were telling me offline that it was maybe not your favorite day-to-day experience we often talk about on this podcast. What sucked so bad about your day job?

Adrian: I love the guys that I was working with. They were so smart. Two of them are pretty high up in NSA and we got to work with some pretty amazing data sets. At the same time, I just wasn’t feeling happy and I wasn’t feeling fulfilled. That’s because there’s a deep-seated need in me to not only create something, but sell something—to be able to create something of value that people will trade their hard earned dollars for. 

There’s just something immensely satisfying to me as a person by doing that. No matter how much money I was making with these guys, which honestly was pretty amazing. I graduated from college with my PhD. I had a base salary of $120,000 a year. Then we had bonuses up to $80,000. On top of that, just a ton of money back in the 2000s. I just graduated in 2011. A young kid who’s like 23-24 years old, you just feel like you’re rolling in money. That felt good.

I bought a bunch of stuff. I fell into the consumerism habit of more, more, and more. At the end of the day, I just wasn’t happy at all. I knew I needed to do something on my own. That’s where I started exploring, developing my own apps, and my own products. 

In college, I developed a few mobile apps just for fun to try and get them off the ground. What really held me back was the lack of marketing skills. That’s really what drove me towards starting PyImageSearch. 

Rob: Got it. Like you said, you stumbled upon Startups for the Rest of Us. It sounds like The Stair Step Approach resonated with you. Is that right? Talk us through your thinking there and where you started with PyImageSearch. 

Adrian: With PyImageSearch, I wanted to go back to square one. I really needed to ground myself in the basics and develop a small little product that you can create, ideally in 30-60 days. Just get it online and just work your butt off at selling it. Just get that marketing down. Learn how to email markets, learn how to advertise, and learn how to communicate with your customers.

Honestly, that’s what I was missing with my two previous ventures back in college. Those were two either scientifically focused or they were going after markets like health care spaces that someone in their 20s without the proper connections is just not going to be able to do. 

I needed to get these your consumers or your prosumers—people who were willing to trade a bit of money to get some knowledge that will help them professionally. That was my idea. Just go straight back to basics, learn them really well, and then that’ll serve you throughout your lifetime. It was truly an investment in my entrepreneur spirit and my own journey. 

Rob: Got it. You started by starting a blog. You started writing. How did that play out? This is 2013-2014.  

You start writing on this topic, which is a nice way to dip your toe in the water or something. If I’m going to write about an A, do I enjoy writing about it? How hard is it for me to do it? Do I get any traction? 

If any of these are a no, then it’s like, well, I probably shouldn’t do this. You’re writing about Python. It’s PyImageSearch. I want to explain to people it’s pyimagesearch.com. Py for Python. Python is used so much in the image recognition space. 

I got to be honest. I don’t know if we’ve ever talked about it, but my two favorite classes in college were image recognition and digital image processing. Maybe I was an undergrad and I was taking grad level courses. The professor was like, this is going to be really hard. I was like, I’m sure it is, but I loved it. 

I actually considered for a while, I was a double electrical engineering, computer engineering major. It was kind of an elective-ish thing. I considered focusing on image recognition because it was so fascinating to me, but I never learned Python. 

You dove into blogging about this. Did these things go up on Hacker News, on Reddit, or was it just an SEO play at first? How did you start seeing early traction? How did you get that signal that this is working?

Adrian: In the beginning, when you’re starting a brand new blog, you’re just not going to have that SEO traction. It’s just not really possible. You have to rely a little bit on social media. You have to join discussions like LinkedIn groups, Reddit threads, Hacker News threads, and that’s exactly what I did. 

I wrote the first blog post in 2014. The general idea and the theme was to explain these extremely technical, complicated computer vision, artificial intelligence concepts with code rather than theory. I would build these small working projects, and explain them line by line. Then, people could take that code and apply it to their own projects. I knew there was a practical aspect to that. 

Reddit was super important and so was Hacker news. Those are two groups that want to see that practical aspect. They want to see the demos. They want to see, hey, does this work for me? What’s the outcome? How can I integrate this into my own project? 

In some ways, you’re almost sparking their imagination by showing them both the code and output result. 

Rob: That is crazy. I would have thought that in 2014 there would have been plenty of books and resources available. You mentioned O’Reilly when we’ve talked about this, and that’s who I would have gone to in 2014. 

I want to learn about what’s called OpenCV with Python. You want to explain to people what OpenCV is?

Adrian: Yeah. OpenCV stands for Open Computer Vision. It’s an open source library for the Python programming language. Also, there’s C++ bindings and Java bindings. It’s the largest computer vision library available online. 

Back in 2014, most code samples were in C and C++. There was very little in Python, but Python was quickly gaining traction as the go-to language for not only computer vision, but machine learning, artificial intelligence, and data science. Pretty much all of that nowadays is done in Python, at least in a research and prototyping capacity.

Any books you would find online really utilize C or C++. There were three or four books on O’Reilly’s impact. Back then, there were no Udemy courses on OpenCV. 

Man, I’ve seen a few grad students start blogs on how to help other grad students do the more practical experiments of their PhD, like writing the code to process the data sets and get these results back out. 

I was thinking to myself, wow, maybe this is where I get involved. This is where I can show my expertise and just get back to the community, but also learn how to market and sell at the same time. I’m going to attack this thing using the Python programming language, where I know there’s a few blogs, there’s not necessarily anything for sale in Python. But, I know Python is the future of data science. It’s the future of machine learning. 

Let’s go in on this and I can always pivot back to C or C++ if I need to, but I believe Python is the way to go. It turns out that was definitely the right decision in the long-run. 

Rob: Yeah. I mean, you included it in the company name and the domain name—the Py. That would have been a tough pivot later.

Do you think you needed a PhD in computer vision in order to do this? Or, do you think you could have learned it from the books and from an undergrad education or whatever and still be executed by this company?

Adrian: I don’t even think you need a computer science degree or mathematics degree or advanced degree like physics or something that you would traditionally think of a person transitioning into these advanced computer science concepts. That’s just not true anymore. Maybe it was 10-15 years years ago, but now. No, not at all. 

You have so many resources on Udemy, on YouTube, and so many blogs. If you just learn the basics of programming, it’s remarkable how fast you can get up to speed in these advanced topics. 

Rob: Yeah, that’s been my experience as well. I grew up in the 1980s. I Speak BASIC to my Apple was the first book we had. We would literally read through it and type the basic programming into the Apple IIe. You’ll type that thing—there was no copy paste. You type it in and you’d have the typos. That was the way that I learned it. These days, it’s obviously so much easier.

Not to say that I walked uphill both ways. It was a really good way for me to learn it as a kid. But the advancement of these topics, whether PyImageSearch, O’Reilly, and Udemy, allows us to build so much more complex things, so much more quickly. 

You launched the blog. You’re getting some traction on Reddit and Hacker News. Are you learning marketing at this point? Were you starting to collect email addresses or were you just learning copywriting at this point? Like, hey, it’s content marketing. 

What was the tool belt? How is the tool belt expanding? 

Adrian: First put the site online. Put a few opt-ins up there. Back then, it was using Mailchimp. We had a resource guide PDF. We had a weekly newsletter. Those are the two primary ways people are getting on our email list. 

What really, really changed for us is when I realized, man, why am I not putting these code samples behind opt-ins? That was the game changer. 

I think people listening to this episode, especially developers, would be like, why wouldn’t you just throw it on GitHub? For me, I was creating a zip file or a tar file of this code, uploading it to my server, and the only way you could get it is if you entered in your email address. 

Yeah, it bothered some people, but we were getting a 3-5 increase in our opt-in overnight just by putting that code opt-in. That was fantastic. 

I think that’s true regardless of what info product you’re doing. You could be teaching people how to play guitar and you have a guitar tab or some chords that you review for a certain song in a video or a blog post. Put that PDF of that tab behind an opt-in and do it on a per post basis because it’s so hyper specific to that post. That was a true game changer. 

Once we started getting these multiple opt-ins and essentially an opt-in for every single post, we have 500 plus tutorials now. We switched over to Drip pretty quickly. That was back in the early days of Drip, actually, before even automations or the rule system were available. We were loving Drip. That helped us out tremendously. 

Otherwise, I was working on a product in the background. I was offering a book. For me, at that point, I’m learning how to write email, send that, broadcasting, and getting confident in that when I send an email, I’m not going to get hate mail in response. People aren’t going to mark me as spam. 

Initially, you have to build that confidence. It does take time. You can’t shortcut that unless you already have experience sending out email from some other business that you’re involved in.

Rob: Yeah, it’s a learning curve. It’s that terror of the first time you publish a blog post. Is everyone going to tear me down or are they going to rag on me? The first time you send an email and the first time you do a sales call, if that’s your business, I think these are all scary things. 

At this point, you have a blog which isn’t making any money. You have an email list which isn’t making any money. I presume you’re still working the day job. What was your daylight? This is the night and weekend story. 

A lot of people need to hear that some of us had to grind it out. I know that you did it as a side project. What did that look like as you were building this up?

Adrian: It was a grunt. There is no doubt about that. I want to make that explicitly clear that there is no shortcut. If you want to do it, you have to do the work and you have to be brutally honest with yourself of, are you going to do this or not? It is a true commitment. 

For me, I would wake up at 05:00 AM. From 5:00 AM-8:00 AM, I would work on PyImageSearch, working nine-to-five literally for this day job. Then, about 6:00 PM-8:00 PM on PyImageSearch. That was during the weekdays.

On weekends, both Saturday and Sunday, I was working 06:00 AM-01:00 PM on the business. I was working a ton. I was really exhausting myself, really at times pushing burnout, but at that point I could recognize it and pull back on a little bit. That became harder and harder as the years went on and as the business grew.

In the beginning, but it was also exciting. That’s the part that has to keep you going. You need that passion in the beginning. If you’re not passionate about it, or whatever it is you’re doing, whether you’re building a SaaS app or an info product business, honestly, you’re not going to make it. You’re not waking up excited to work on it. 

For me, I was working for freedom. I knew I did not like working at this job. I knew that I needed to own my own time. I needed my independence to feel happy and content as a human being. Money aside, yes, I wanted to make money. I wanted to be happy with my money, but I needed to be independent. That’s what I was fighting for and that was my motivation that kept me going through those early days, through that really rough grind. 

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Relatively quickly, you authored your first ebook. It was March 2014, Practical Python and OpenCV. Did you start selling that directly to your list or did you do a Kickstarter first?

Adrian: The very first book was sold directly to my list. I wrote it in about a 10-day period visiting my girlfriend, now wife, at the time. I was at her parents house while she was at work. Literally, for 8 hours a day sitting at their kitchen table, I would write this book, put on my headphones, just consume coffee, and just grind and grind and grind on it. 

Around five o’clock, I go in the fridge, get a beer, and start working on the parts that didn’t require so much creative energy. What I call the more procedural task, but you got to slog through. 

I had this book and it is done. I’m just thinking in my head, is anyone going to actually buy this? At that point, there’s probably 100-200 people on my email list. I built my first sales page. I went to the Boston Marketplace. It’s ThemeForest. They have their little templates. I picked an info product page, opened up Photoshop, created some graphics, and put a sales page up. 

I just slapped a $19 price tag on it. I have no idea if people are going to buy this. You see ebooks on Amazon for $3 or $4 and you also see these technical courses for $500 plus. I have no idea what the price of this thing is, but I put it on there, and I heightened it a little bit. I teased a little bit, and the email listed my own. 

It was actually my very first sales campaign. I sent out emails saying, I’m about to release a book. Here’s the table of contents. This is what it’s going to cover and I’m going to release it on this day. I did it and I made two or three sales that very first day. 

Honestly, some of my favorite money I’ve ever made in my entire life. It felt so good to be able to send out an email and have money come in.

Rob: Yeah, with a list of 100-200 people. It’s really small. That’s the validation. You talked earlier about having passion for what you’re doing to keep you going. I also think another factor is validation that something’s working. 

If you toil for a year on a blog and you build up an email list, but you never sell anything—I guess the email count could be a validation, but it’s weaker validation. Then, the moment that you make $60 in a day or a couple of $100 in a month. 

Suddenly it’s like, well, why couldn’t I just add a zero to that if I just keep doing this? If the list gets 10 times bigger can I make $600 in a day? Holy crap, $600 that could make our car payments or however it works. Then, you see $600 and you think, I’m not too far off $10,000 a month or whatever that goal is to quit the day job. 

Adrian: That’s exactly what happened. I had this $19 product. I thought, okay, what’s the next step? Do I create a new product? I was just thinking about that for a couple of days.

I think it was Ryan Delk from Gumroad back then. He was talking about tiered pricing, how well it worked, and his little formula of how to create three tiers, which is your base price, your next price is 2X of the base price, and the third tier is 2.2X of the middle price. 

You create these different tiers, like man, how can I create tiers to this book? The first book was called Practical Python and OpenCV. What can I do about this? 

I thought back to my early grad school days and I realized one of the hardest parts of getting started with OpenCV was actually installing the library. Back then, it was not an easy command. You just open up a terminal and type in a command. Then it’s done. It took days to track down, compile errors, and install dependencies. 

I said, what if I created a virtual machine that has OpenCD pre-installed. They can just download it to their system, import it, and run. Man, that is a good thing. That could be a middle-tier. Now, I have this original book. I have the book plus the virtual machine. 

Then for the third tier, I did some research and found CreateSpace, which was an Amazon company that doesn’t technically exist anymore, but they could print books on demand. I know people love physical print editions. Maybe that could be the final tier. 

I ended up creating this $47 tier at the base, $94 tier, and then $197 tier that included the physical printed editions. I put that online. As you said, you’re thinking, how can I add a zero to what I’m charging, how much money I’m making? That was a game changer immediately, made more sales, and proved that we were going in the right direction. 

Rob: We tend to underprice our work. It’s like I’m giving these blog posts away for free and this book is a collection of these blog posts, $19—that feels. Most books, you go to Amazon, like you said, $3 for an ebook, $25 for printed books. Shouldn’t we be charging in that realm? 

You’re mentioning Ryan Delk’s talk, which was called Lifting the Veil: The Data Behind Successful Product Launches he gave at MicroConf in 2014. Folks can go to YouTube and we’ll try to link it up in the show notes as well. 

But hearing an outside perspective, similarly to you, hearing Mike and I on the Startups for the Rest of Us, it makes you think, oh, this is possible. I can justify this to myself because someone else is making it work. Me, being an entrepreneur, is possible. Just being a solo entrepreneur sitting at a kitchen table as a bootstrapper is possible. 

Then you hear from another person, Ryan Delk, who says at the time he was Head of Growth for Gumroad. He had all this data of how info products were being sold. When he says whatever the formula ends up being, it rattles your frame. 

Each of us have these mental cages of, well, certainly I couldn’t charge more than $20 or $30 for a book. Suddenly it’s like, no, I’m going to charge $200. I’m going to include a virtual machine and print it on demand. 

I mean, really? The print on demand. The book is $5 to print, probably $3. It’s not actually that much more expensive.

Having these—sometimes I call them virtual mentors who don’t even know me and other times it’s just influences of seeing a talk or hearing a podcast that clicks something in me that changes the trajectory of my business or of my career. It sounds like you’ve had a few of those along the way. 

Adrian: Oh, yeah, absolutely. Practical Python and OpenCV was the first one. Then the second one happened towards the end of 2014. Basically my original job, my nine-to-five job, I was working at a startup, but our contract with the state of Maryland to overhaul this old mainframe system was costing taxpayers hundreds of months. 

Well, there was an election, the governor switched, and the next day we got a call that said, hey, you’re out of a job. The new governor doesn’t want to continue this project. I was in an interesting position because at that point, PyImageSearch had been around for 7-8 months, probably making $6000 a month from Practical Python and OpenCV, which was honestly amazing to see it grow that quickly. 

But it wasn’t replacing my full time income that I had with my nine-to-five job. It was doubly complicated because I had just moved from Maryland, Connecticut, moved in with my longtime girlfriend again, who became my wife. I wanted to take the risk to continue PyImageSearch. It felt like the right move to make, but I also felt like it could really damage the relationship if it didn’t go well. It could hurt her trust in me to be a good boyfriend, to eventually be a good husband, and to be a good provider. 

That was one of the most scary decisions that I had to make. But I said, you know what? I’m young, I’m 24-25 years old. Let’s just do this. So, I decided to create this Kickstarter campaign. It was the first crowdfunding campaign that I ever created, and I called it the PyImageSearch Gurus Course, which was honestly a horrific name for a course, but I was still learning back then. 

I planned it all out. I planned out the launch sequence—how I was going to spread it, how I was going to get the word out, sent out a bunch of emails to my list to get people hyped and excited about it. I purposely set my funding level low. It was probably only $3000 or $4000. 

The idea there was that when you run a crowdfunding campaign, you want to get that thing funded within minutes of getting it online, from your original list, from your audience, whether that’s social media or your email list. Get that funded, because that is social proof. Anyone else who stumbles along that page who is remotely interested, they’re going to see this project that’s funded by 2000%. 

Now you want to talk about social proof, that’s exactly what that was. Put that Kickstarter campaign online. Within the first day, it raised $6,000, it well exceeded the initial goal. I went on to raise $34,000 by the time the 30 day period ended. 

That was absolutely incredible. I felt like I had really reached some validation of, yes, this is where you need to be going. You need to focus on this business because it has legs and it could really grow.

Rob: $34,000 for what essentially has zero COGS or maybe some printing of some books. A lot of Kickstarters, you’ll hear people say, don’t do Kickstarter to make money, just do it to build an audience. 

If you do a 3D printer, the cost to design, build it, ship it, to manufacture, and all that. I had a friend who did like a half a million dollar Kickstarter for a piece of hardware and he’s like, yeah, in the end we made almost no money. We made less than minimum wage, but it built an audience, it built a brand, and now they had a bunch of [inaudible 00:32:51]. They did overproduce so that they had these pieces to move versus PyImageSearch Gurus, the cost of goods sold are almost zero. It was your time. 

Adrian: Yeah, it was my time to create it. That was just an online course behind a WordPress login. There wasn’t even any print cost associated with it. The feeling of raising $34,000 for something that just flat out doesn’t exist yet, that feels good because you know people are putting trust in you, and then you built an audience that you’re resonating with them. 

That feeling again, that’s that motivation that gets you out of bed, that allows you to keep grinding on the business. 

Rob: Right, it reignites. You talked about starting with this passion to do it. Then, I talked about having this reinforcement that it’s working. The reinforcement comes back and it can reignite that passion because otherwise you burn out. Right. You go six months with no reinforcement, it’s like, well, is this even going to work? Whether it’s you in your own head, whether it’s your spouse or future spouse, significant others as you were experiencing, I think we need that along the way. 

That was 2014, and you made $38,000 that year. In 2015, you made almost $250,000. In 2016, still just you, solo, which, Adrian, if I had known this, I would have been busting your chops so hard to hire somebody. You made $600,000 in 2016 and you still were working on this thing solo. Why did you not hire someone? 

Email support. Just email support. This is what I tell founders. Just hire that way earlier than you think you need. Dude, you’re making more than half a million dollars and you’re just cranking away answering emails as people have questions. 

Adrian: Yeah. Honestly, it really comes down to ignorance. It was the first business that I had run at that scale. I was truly afraid to hire someone initially. I thought by myself being in the inbox and responding to people, they felt like they were getting access to the owner, access to the expert, and that would increase sales just by virtue of having my name and the signature. 

That turned out to be a very poor assumption on my part. It was totally incorrect. Back then, that’s how I felt.  

I was doing way too much by myself. I was typesetting a blog post in WordPress. I was creating all the content. I was writing all the email campaigns, doing all the email support. If someone had an issue accessing their downloads, I was the one who had to go in, create that link, and send it to them. 

Those early years, I ran completely wrong simply because I was ignorant, because I had never, ever been in that situation before. Honestly, I wish I had someone who just would hit me over the head and be like, just get on Upwork, hire someone, and try them for a week. If it doesn’t work out, revert to what you were doing. It’s probably going to work out and you’re going to feel a lot better. I wish I had someone like that. 

I’m saying now, if you’re making over $600,000 a year in your business, and you’re the only one working and doing everything, probably time to hire. You should have been hired a long time ago. 

Rob: By the time you hit $20,000 a month and as long as you’re not straight-stagnant, you’re growing at all, there are some low hanging fruit and email support is usually the one. 

I know exactly what you’re saying because I used to do all of it on my own. People would have trouble accessing my book when I was selling it as packages. It’s like, well, they heard from Rob Walling. This is great, right? But it’s like, yeah, maybe a little bit. It’s like, oh, cool, Rob Walling responded, except for I’m chewing through time. It’s not worth it. It’s not worth the time and the potential burnout for me to be doing these day-to-day tasks. 

In 2017, over the next three years, you call this kind of your small businesses or your big growth phase. You started hiring more. You grew the revenue to seven figures and your email list into the hundreds of thousands, which was just more of the same.

It was more blocking and tackling. You finally started delegating some of your content, which I remember when you did that because I was sitting watching Relentless Execution. I was watching you do this for years and years and just grinding. I’m like, this guy puts out so much written content, it’s crazy. 

The first time you told me that you had hired someone to write content for you, I was thinking to myself, I wonder how he’s doing with that. It’s every word that had been written, whether it was an email, whether it was a support email, whether it was a sales copy, whether it was the actual blog content, or whether it was books—every word had been written by you for years and years. 

What was that transition like for you to hire someone and suddenly have their voice, their words coming out of your mouth, in essence, or of your company’s mouth?

Adrian: It was scary as hell. Founders talk all the time about how scary it is adjusting their prices—increasing prices, going up market. They don’t want to alienate current customers. They don’t want to kill off their growth. That’s how I was feeling, but orders of magnitude higher.

As you said, every word, every piece of content was created by me. I knew at that point, I was so stressed. I was so anxious. I was working way too hard. It was time to start handing over the reins, so I hired Dave. He was a customer I had developed a really good relationship with, and he helped me with content creation. 

Originally, he was effectively a ghostwriter for me on the blog post. I would write the intro to the post, the conclusion. I would fill in any challenging technical content. Maybe it’s a really tricky piece of code that needs me to explain it, or there was some theoretical component that I had to describe. He would go in and fill in the rest. He did a fantastic job. 

I remember when we started publishing posts with him ghostwriting, no one knew at all. I paid really close attention to the emails, to the blog post comments—no one knew at all. That’s when I started to release the brains a little bit and we wrote a book Raspberry Pi for Computer Vision. He effectively wrote all of that book and he rightly got credit for it. He was listed as the first author on it. 

He was the first really important hire to the business outside of our email support person. He went on to help with project management, with email support, and with troubleshooting. He was really a Jack of all trades and really helped during those mid-growth years.

Rob: The mid-growth turned into 2020 and 2021 where you’re still doing seven figures. You have this amazing business with what? 3-4 employees? 

Adrian: Yeah, about five employees. 

Rob: That is so incredibly profitable—throwing off loads of cash—and you decided to sell it. What was that decision like? As someone who has gone through this decision before, someone on the outside might say you work for all these years and you build up this thing that you had been building for, at this point, 6-7 years. 

I’m just going to say, you don’t have to deny or confirm, but it’s throwing off $1 million a year or more into your personal bank account. Why would you consider selling that? 

Adrian: Yeah. I’ll also point out that each year I ran the business, we increased revenue every single year. When you’re looking at a chart of growth, you’re not thinking about running it over the top yet because you haven’t had a decline here. 

But 2020 came around. Of course, we had COVID and we couldn’t go anywhere. My wife found this little cabin out in Western Pennsylvania. We went out there and I spent a tremendous amount of time journaling. Just really considering what I wanted over the next few years. 

I kept talking about selling the business. The reason I did that was while I enjoyed running the business, I wasn’t creating anything new. I had fired myself from a lot of duties in the business at that point. 

At that point, I was really just refining my craft. I wasn’t creating something new and novel. Believe it or not, writing email campaigns and making seven figures off of those campaigns, it actually does get boring after a while. 

If you have a growth mindset, you eventually get almost numb to it, which is sad, but it’s also affirmative of the fact that you need to keep growing. You need to keep doing what you’re doing and doubling down on what interests you. 

Sometimes what interests you is something totally different than what you’ve been doing for 70 years of your life. 

Early 2021 came around, I realized I was serious about selling. It was time to take my chips off the table. I didn’t want to worry about running over the top. 

I talk to you and talk to Sherry about different brokers that came across quietly. I just want to give a huge shout out to Walker [Doyle 00:41:07]. Just an amazing, amazing broker really helped tremendously with that sale of the business at that point. The rest is history. 

We had three very serious offers within five days of listing it. Seven months later, the business was sold. First buyer didn’t work out, but the second one worked out fantastic. They’re taking tremendous care of the business. I’m so happy for them and so proud of what they’re doing. 

Rob: Yeah, that’s good to feel that way. Seven months to sell? That makes the hair stand up on the back of my neck. Just saying it out loud. How was that mentally for you to make the decision? 

What I found is a lot of entrepreneurs, once we decide something, we want that to happen now. There’s a reason that we don’t work in academia anymore. When we decide to publish a paper, 18 months later it’s published and that’s too long for us. 

When I decide I want to sell a business, I want it to close tomorrow. When I hear 210 days, that’s freaking painful. What was that like for you as someone, who I would describe, gets stuff done really quickly because they can and you execute on things? This timeline was out of your control. 

Adrian: Oh, it was brutal. My Type A personality kicked into high gear, and I decided to sell. I got everything to quiet within a matter of days. Literally next week, everything was listed. 

I made it my priority. I hopped on calls. When Walker told me to hop on calls, I got potential buyer’s information when they wanted it. Super quick turnaround. I was really excited about the first buyer. We got 3-4 months, I realized there’s just a lot of red flags and the deal fell apart. 

It was challenging for me at that point. I kept the sale of the business pretty close to just myself, my wife, and my dad. I talk to them about it, talk to them about the stress of it. After the first deal fell through, I shut down completely. 

I told my wife, don’t ask me questions about it. If I volunteer information, feel free to engage, but don’t talk to me about it. I was losing sleep. I was super stressed out and anxious. Honestly, it was just playing out worst case scenarios in my head. 

If you’re a business owner, it’s just going to happen. You’re going to think about the worst case scenarios. It’s going to bother you, it’s going to be upsetting. 

One of the best things that I did, and this is something I would never do under normal working conditions or something like that for productivity reasons, I just found a mindless game to play on my iPhone for an hour or two a day while the business was running. I was done getting information to the broker, to potential buyers. I played this stupid little baseball game on my iPhone for a couple of hours just to give myself a break to let the brain shut down and occupy my time. 

That honestly, probably, just saved me from having a huge breakdown during the sale of the business. 

Rob: Yeah, that’s underrated. I know that myself and a lot of entrepreneurs get a little too hung up on constant self-improvement. Whether it’s physically or whether it’s listening to the newest audiobook of The Theory of this Future Thing. That’s nonfiction, for sure. I’m listening to these podcasts about how to improve my business. 

I do that and I get it. But, there are times where your life is so tumultuous, whether it’s your personal or your professional life. In this case, it was professional where I think you have to give yourself space and you have to give your mind some space to chill out. Doing that with a video game, I do it with Tabletop Dungeons & Dragons. I do it with a podcast about the advent of role playing. 

It’s stupid that no one else will get and no one else will care about, but I can put it on and I can feel for this 30 minutes I’m not thinking about business. I don’t know how else to numb myself out to that other than like drinking alcohol. One day is fine, but that can lead down a pretty tough path. 

You eventually closed and you sold this business after seven months. It was late 2021. What was that feeling like? I think a lot of founders find it bittersweet. The sweet part is, holy crap, I have millions of more dollars in my bank account today. The bitterness is I’ve been working on something for a long time and I have to let it go. 

There’s varying degrees of those two things in different founders. What was your perspective on it a day later or maybe a week later? A month later? How did that evolve? 

Adrian: This is the brutal, honest truth. For me, it was anticlimactic. I sold the business, the money got transferred to my account. I had a really quick handoff period. It was only three months that was required to be around to help transition the business.

The day the business sold and the money landed in my account, my wife and I went out to dinner at a nice restaurant. I remember feeling so tired and so exhausted. I enjoyed the food, I had a few drinks, and there was this really nice cigar lounge down the street that we like going to. Obviously, you just sold the business. It’s the perfect time to go have a nice Scotch and smoke a cigar. 

But I looked at her and it’s only 08:00 PM. I said genuinely, I’m so tired, I can’t keep my eyes open. I just want to go back to the house, lay on the couch, watch some stupid reality TV show, and just go to sleep. That’s all I want right now. 

To me, it was a confirmation of how I had been feeling over the past few months, that this was one of the hardest things that I had been doing. At the same time, I have been pushing myself so hard physically. I’m a super hard, hardcore fitness nut. I love pushing myself in the gym just as much as I love pushing myself in business. 

In 2020 and 2021, I was working out 11 times per week. A part of that was due to my fitness goals, but also because that was my stress outlet for the really severe hard stuff during the acquisition. Just going into the gym, throwing around some weights. 

The problem is, by the time that business sold and I got that relief of knowing that, okay, this is done. Then everything that I had suppressed just started coming out and I started to shut down a little bit. 

I had trouble recovering from my workouts. I felt tired, I felt bloated. I have never had any problems with gluten in my life, but literally developed a gluten intolerance for about three or four months due to the stress of selling that business. It was one of the hardest points of my life. 

If you sell your business, be realistic. Understand it’s going to be stressful and that you may not get that huge celebration at the end of it, when that money hits your account. 

For me, it took me six months later to get to that point. My wife and I went to Italy a few weeks ago. While we’re there, it finally hit me and I could finally feel all of it. I could look at the accomplishment of selling the business, of building that business, and of all that I put into it. I can separate it from all the grind of the pain and long hours put into it. I can see them both together and be proud of that. 

That takes a while to get to it, especially if you have a hard acquisition process. 

Rob: Yeah. That’s well said, man. That’s a good note to leave it on.

This is basically a summary—a compression of your story. There’s obviously a lot more to it. If folks want to hear more about your story, also hear more about your theory of info products, and building that freedom the way you did, you launched a podcast a couple of weeks ago. It’s called Info Product Mastery. Obviously, available in all the podcatchers people could find.

It’s infoproductmastery.com, if folks want to get on your email list and get some exclusive updates that you’re not going to release publicly and all that stuff. Thank you so much.

Adrian: Absolutely. The goal of the podcast is I just want to help developers, educators, and entrepreneurs launch and grow their online education businesses. As developers, we have such niche-specific knowledge that if you’ve been in the field for five years or more, you probably have enough expertise to write a book, to create a course, to start a blog. 

I wanted to instill all the lessons that I’ve learned from PyImageSearch and help you educate others, build a following, create your first ebook or course, learn how to market, sell it, and build a successful business. 

We dropped three episodes already. We’re doing weekly episodes. If you’re interested, go to infoproductmastery.com, enter your email address, and you’ll be notified when new episodes go live. 

Rob: Circling back to the early part of this conversation, I talked about how in the early days, this very podcast, Startups for the Rest of Us didn’t focus on SaaS. We had SaaS, we had info products, we had mobile apps, and a bunch of other stuff. 

Over the years, SaaS became my thing and we kind of narrowed to it. We have gotten emails over the years a lot. Andrew Connell has emailed several times and said, “Where’s the info product equivalent of Startups for the Rest of Us?”

I feel like I’ve always said I don’t know because so much of the info product and course creation advice comes from sources that I would not recommend, basically. My hope and my expectation is that info product mastery will be that. 

Folks, as you said, if they’re developers, educators, and entrepreneurs thinking about launching their own course, you should check him out. Thank you so much, man. Thanks for coming on the show.

Adrian: Thanks, Rob. It was truly a pleasure and an honor to be on this podcast. You and Mike have helped me so much over the years. I might as well share it. I’m just truly happy to be here. 

Rob: It’s great to have you, man. 

Relentless execution is how I would describe Adrian, and I hope you enjoyed that story. I hope today brings you a little bit of motivation. Maybe some ideas of how to improve or grow your own business. That’s the purpose of this podcast. Whether you’ve been listening for six or 600 episodes, it’s a pleasure to have you here every week. I appreciate you coming back. 

Signing off from episode 608. I’ll be back in your ears again next Tuesday morning.

Rob: It was the best of times, it was the worst of times. It was the age of wisdom, it was the age of foolishness. You’re listening to episode 607 of Startups for the Rest of Us. Thanks so much for joining me again today. I am talking with Asia Orangio and we answer listener questions about overcoming plateaus, stealth launches, founder-driven sales, and all types of tasty goodness. 

Of course, we cover all these topics from that mindset of not needing to build a unicorn company in order to have an incredible life-changing the outcome and from the idea that we’re seeking freedom, purpose, and relationships, and looking to better our lives and the lives of those around us rather than simply looking to go big or go home. 

We can build real businesses and solve real problems for real customers who pay us real money. That’s what Startups for the Rest of Us are all about. With that, let’s bring Asia to the show and dive into our first listener question. 

Asia Orangio, thanks for coming back on the show. 

Asia: Yes, thank you so much for having me. I’m super excited to be back. 

Rob: I am excited to dig into some listener questions today. Our first one is a video question from Tom Cusack on customers onboarding videos. 

Tom: Hey, Rob. A long time listener. Keep up the good work with the podcast. My question to you is the location of onboarding videos. I have an ecommerce marketplace that I’ve built in WordPress using WooCommerce and I’m looking for vendors to come on board. 

My question to you is where’s the best location to put the onboarding videos? Should I put them right on the front, at the top where the menu is? Right underneath where it says home page, shopping, and all the rest of the basic information up there? Or should I put them in the footer someplace and have them click on them there? 

My idea is to build an individual page for customer onboarding, keep it simple, a vendor registration, help them walk through the onboarding system that is already built-in, and also the vendor adding a product page. That can be daunting for some people that are not technically capable of doing things. They are challenged, let’s say. 

I’m just looking for where would be the best place to do this. Again, keep up the good work and I look forward to hearing more on Startups for the Rest of Us. 

Rob: Interesting question. Asia, do you have thoughts on that?

Asia: Yes. When it comes to any kind of onboarding, usually the most successful kind of onboarding pop-up, videos, or what have you, usually the two things I see that work absolutely best either have a complete overlap where there is some kind of takeover of the screen and has two, three, maybe four to five steps and that’s it or you just have the pop up with the video and any extra contexts. 

If you have any extra steps for them to do after that, maybe you include that. I definitely wouldn’t recommend putting it in the bottom right corner or anything like that. I wouldn’t recommend hiding it. 

I would recommend offering it as something that people can consume right there whether you do the full page takeover or just the pop-up and giving people the option to skip it just in case they just want to get to it. 

If you do give the option to have the people skip it, then that would be a used case for tucking it away somewhere and just reminding people hey, if you ever want to come back, here’s where you can find it. I wouldn’t hide it right off the bat. 

Rob: Yeah, I agree with that. I feel like if someone skips it, as much as animations can be really cheesy, and you’re able to shrink it into a little question mark on the upper right, then it’s like oh, I now know it’s behind that question mark. I can always click there to get back to it. 

I remember when we were originally designing Drip and designing an onboarding, Derek really had a good approach to it where when you first came to a page, let’s say for your campaigns which are autoresponder sequences, it’s a blank late because there’s nothing there. What we had was a view of the fully populated page, but it was blurred out and was in the background. You can see what the page will look like if you had a bunch of campaigns. 

Then there was an overlay just like you said—an overlay that had to create your first campaign or the video was right there. I think it was embedded next to it or at least it was next to an icon that was like watching a help video or watching a tutorial. There’s a better word for it, but it’s like how to do this, learn about this or something. 

If you click that, then it plays a video and once you had a single campaign, then you didn’t really need that. It was still embedded, there was a question mark in the upper right or lower right. It was like a nice elegant balance the first time, not even the first time you went there. It was until you created it. You always had it front and center. There is no better need for that real estate, we felt. I think that’s an interesting approach too. 

Asia: The length of a video is also interesting as well. We find that anything longer than a minute or longer than a minute and 30 seconds feels very long. I’m curious if you have any perspective or strong opinions. 

Rob: I feel the same way. They’re like a marketing video honestly. If I’m in an app and I click play, then I’m loading in one screen, and it’s a five and half minute video, I’m like, ain’t nobody got time for that. Ninety seconds, maybe. Two minutes is really pushing it. 

Asia: I completely agree. 

Rob: I think that’s a good rule of thumb. Awesome. Thanks for the question, Tom. I hope that was helpful. 

The next question is from Nick See. He says, “Thanks so much for the podcast. It inspired me to actually try to start a business instead of just thinking about it. Now I’m in the mid-stages of building an MVP. My question is when bootstrapping, how do you scale a content business? That is a business that relies on human generated content for scale.”

It sounds like he’s building almost like an agency of sorts. I guess content marketing and SEO businesses are good examples of these. If you scale up your number of customers, then the amount of content you need to produce increases. 

“How do you do this when bootstrapping? What if the resource—” probably the writer and the content producer, “—you need isn’t full time? It’s more ad hoc and part-time. Where and how do you find that resource? My business is in a different space but relies on scaling human generated content in a similar way.” 

“In the early days, I can fill these requirements myself, but what would you advise when it needs to be me plus n people to fill that demand?”

Asia, you run DemandMaven, which is an agency. While it is not necessarily content production, I know that humans are a big part of what makes your business successful. What do you think about this question?

Asia: This is going to tap into all of your operational skills. If you have a mind for ops and a mind for delivery, whether that’s software delivery or service delivery, it doesn’t really matter. This is going to be for you. 

When we think about scale, things that don’t scale, and things that do ultimately scale, we know for a fact that things that scale are ultimately going to be processes. Within processes, very clear requirements, very clear roles and responsibilities. This is the human element of who do you need, what do they need to be doing, and what are the processes upon which they actually follow to do the thing. 

This is actually true for any team, but when we think about scaling, let’s say content marketing specifically, usually it starts with you doing it yourself. At some point, you have a sense for what are the units that you are trying to deliver. If that’s literary content articles or content pieces in some kind of way, you can kind of reverse engineer how long does that take and what are the requirements for you to actually do that work. 

Once you have a rough model of how long it takes you to do. Keep in mind too that if you are an expert, if you’re super advanced, you’re going to take less time than maybe someone who is less expert and less advanced. If you’re not, maybe you’re more average I would say, then you’d have a pretty accurate picture for how long it takes you to deliver x units. 

Again, units can be whatever, but in this case, let’s say articles. If it’s you doing it up first, at some point, you’ll probably hire someone who can either add extra units to how much you’re producing together or take on your units that you are producing. Then your job is probably to go then hire someone else to go do the same thing. 

This dips into hiring very quickly, but when you are hiring people, it’s going to be pretty tough, probably for them to accurately tell you how long it takes or how many units, so to speak, can you produce in so much time. 

For content marketing, most writers on average are going to be producing one to two articles every two to three weeks. Some writers are a lot faster. Depending on their bandwidth and availability, they may be able to take on more volume. 

At some point though, once you get to about the 3-4 writer mark, that’s when you can start thinking about potentially hiring a delivery success manager or someone basically to manage the writers. 

This could be a content marketing specialist. This could be more of a project manager. It just really depends on the nature of the content, the nature of your market, and also how you’re thinking about delivery and operations. It could also just be you for a while. 

When I think about how we have grown on the DemandMaven side. We have specialists who produce some desired outcome, some desired output. As we increase the amount of specialists that we have on the team, we also start to add in a management layer. 

That could be a client success manager, could also be more like a marketing success manager. It just kind of depends on the project and how the team has grown so far. That person is basically responsible for managing those specialists. 

One person can manage about five specialists or so depending on the workload. The tough part is actually hiring the second manager. That 4-5 specialists per manager, whoever, whatever that is, that’s kind of where it gets tough, stepping into that extra place. 

This is actually where you probably, from a business perspective, start looking at capital in some kind of way. Capital can of course, just be getting a loan. It could also be a line of credit, something that enables you to stretch without necessarily impacting your cash flow too much. 

This is also technically true though, for software, like SaaS. We think about management in the more basic sense. The CEO is probably going to be able to manage so many direct reports before they need to add in a management layer. We see this often with flat organizations and then transforming those into more of a hierarchy from a leadership perspective. We kind of see the same thing, actually, in software companies. That’s how I would think about it. 

The hardest chasms to cross are always going to be when you hire that first management layer and then when you stretch into the second and third management layer. Then you have a team of, let’s say, 15 specialists, writers, what have you. Maybe not even that much, depending on how big you want to grow this business. That’s when you start adding in managers and leadership. 

Then your job really just becomes about making sure that people know what they’re supposed to be doing. Also, that you are making sure that you’re delivering high quality work and of course all the other SEO stuff—marketing, closing deals, that kind of thing.

Rob: That was a masterclass basically on how to build an agency if anyone didn’t notice. You touched on so many good points there that came to mind when he asked this question. 

A lot of folks don’t know that after you have about five or six direct reports, that’s it, you don’t want any more. This is another case of that where your strategist, or project manager, or client manager—whatever title they have—can only have so much bandwidth. 

That’s where from the start, you have to price this business. Keep that in mind as you build your client base. If I can write an article, then hire someone to write a piece for $250 and I’m selling them for $500 apiece, and deliver however many over the course of a month, I’m not building enough margin for managers. 

There’s going to be too many points of downtime where oh, I need to pay this person’s salary, or we don’t have a client, or I’m going to bring a manager in and hire a good manager who actually takes it off your plate. They’re going to be expensive and so you need margin. 

That’s why agencies are often maybe more expensive than people think they should be. An agency is more expensive than a freelancer and there’s a reason. There’s all these systems that have to be in place and there’s a lot more humans involved than you might think. 

The other thing, what you just described is amazing, if you’re an operator, and that was the first sentence you said. This is all about operations. If you’re that integrator person, this is your business. 

If you are like me and you don’t want to do it personally, don’t build an agency. That doesn’t sound fun. It’s not in my zone of genius—building these processes and getting all the humans involved.

Asia: It’s a different flavor for sure. I completely agree.

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One thing you mentioned that I wanted to get into is, you said a writer might be able to do one or two pieces every couple of weeks but is that really long form stuff? I’ve worked with writers and they could do a couple pieces a week of maybe 2000 words. 

Asia: This is yes and also quality. However, I know some writers that just whip them out. I think it really just depends on the writer. There’s probably some average or standard and it’s just a matter of finding people who fit that average or standard that you’re looking to create or deliver against. I’ve seen everything from one piece take three weeks to if the writer has more bandwidth, obviously they can produce a lot faster. 

I think right now, what we’re seeing on average is about two articles a month from one person given their bandwidth. If you have someone who has more bandwidth and or is a faster writer, especially if they have to source the content, if they are operating off of repackaging content, you can typically see a much faster turnaround.

But, if this is net new, high quality, maybe more intensely researched and created, then it might be closer to the two per month. There are some content marketers out there who would pale at that rate so it just depends.

Rob: Yeah, and Nick, thanks for asking the question. I would also recommend a course that Brian Casel put together. Brian has done a couple of productized services and then scaled them up into tens of thousands of revenue. He built a course on how he did this at productizeandscale.com. A lot of what he talks about in there is about exactly this problem.

There’s the marketing aspect of it and there’s the designing the offering, but then there is how do you fulfill it if it’s going to be human powered? I think there’s some really good info in that course. 

Brian actually sold the productized course a few months back, but I know that the material is still good. Thanks for the question, Nick. I hope that was helpful. 

Next question is from David in MicroConf Connect a few weeks back. I liked the question so much. It’s pretty broad, but I like it because a lot of people encounter this. His question was, “What is the best thing to do if revenue has plateaued? Am I doomed?”

First thing I said is don’t be so pessimistic. You’re never doomed. Asia, what do you think about revenue plateaus? What’s your framework to get through them?

Asia: My first reaction to the am I doomed was definitely, of course not. If you are running a software company, you are probably running one of the most agile, reliable, and resistant kinds of companies that there are. The only other thing I can think of that’s more adaptable is going to be being a freelancer. 

What to do when revenue plateaus? When we think about the why, the outcome, the thing that we ultimately have to do is take a few steps back—take a step back and look at the overall larger picture. 

The first thing we’re going to look at is the business performing? That is just from top to bottom business performance of, are we getting the traffic or leads that we need? Are those converting into trials/demos or whatever the model is? Then is that converting into paying customers? Then are we ultimately retaining those customers? 

If you’ve ever heard of pirate metrics, acquisition, activation, retention, then revenue, and referral, that’s kind of what we’re going to look at first. Are we performing? If we are performing, then it really becomes a question of okay, if the business is performing, then why are we not seeing the ultimate outcome of growth. 

My guess is, if growth has stalled, then there’s probably something that’s missing. We’re probably not adding enough net new customers on top of the funnel or we’re turning as much as we’re gaining, which means that nothing is ultimately moving. The trickiest part is really identifying where to focus next. 

In any strategic process, we now have to dig deep. If we’re not getting enough net new, why is that? If we’re not retaining enough, why is that? If we were returning a lot, where’s that coming from? 

The next step is usually whenever we see slow growth or like just a very marginal 1% month over month, or even less than that, usually, it’s because there’s some disconnect with the product and the market. 

I know it might scare you a little bit to be thinking oh, my gosh, do I have product-market fit? Usually, there’s some disconnect. It’s either that we’re not attracting the right kinds of customers for our product or there’s something missing from our product that our ideal customer really needs and wants. Now, we need to address that. 

At the end of the day, people turn because they’re not getting value but it could also be that we’re just attracting the wrong kinds of people. This is as we start to identify where that’s coming from. Usually some kind of customer research, some kind of structured customer investigation is necessary, in addition to some kind of market investigation. 

It could very well be that another competitor is eating your lunch and you just have no idea about them. You have to go find out what’s going on. It could also be that there’s things, product-wise, that’s missing. 

Then of course, there’s also other flags as well. Maybe we’re attracting the right customer but we’re not converting them as efficiently. This is kind of where we have to do some pretty intense deep diving. 

A lot of times we find that a lot of businesses aren’t really tracking the right things from the get-go or aren’t reliably measuring anything to start with. I would say if you’ve got a pretty good handle on analytics, attribution, et cetera, amazing dive into that data. If not, then that might actually be the first place to start.

Rob: All right. I was jotting down notes before this call and you pretty much touched on most of the things that I was going to say. I think the one thing I’ll add and you touched on it a bit, but I want to call it out is if you’re plateauing early, if you’re at $2000 MRR, $4000 MRR, it’s what you said, you probably just don’t have product-market fit. You haven’t built something people really want and are willing to pay for. That’s usually the case under about, I would say, almost $10,000 MRR. 

If you’re plateauing at $50,000 MRR or $100,000 MRR, there’s a couple questions to ask. Is the market so small that we have literally tapped the whole thing out? Usually no, but if you’re catering to a very, very small niche, that’s a possibility. Then you have to think, do we add additional product lines to this to be able to charge more? Or do we expand into other verticals or something. 

The other plateaus that I see in that later stage are folks that churn can be an issue. If it’s a 80% churn business, you just can’t outrun that. You need a massive funnel to grow beyond a few million because you just constantly churn them out or have a price that’s too low is often what I see. You’ll never get to a $5 million business, not never right, but almost never. If it’s like my average revenue per county is $10, it’s too many people, and the churn is going to be too high. 

Then lastly, I think I’m surprised at how many folks don’t understand how much traffic you need to drive in order to test an idea or in order to get that escape velocity. I will have folks say hey, I’m at $1000, $2000 MRR and I plateaued. I’ll say, how many uniques do you get to your site in a month? They’re a low touch funnel so it’s all about traffic. It’s like, oh, about 800 uniques a month. It’s so cool, but you’re not going to grow. It’s just too small. 

Get to 10,000 and then look at the rest of your funnel and see are you converting? It goes back to what you said, you just have to look up and down the funnel. Look at the rules of thumb, trial to paid conversion rate with a credit card upfront should be between 40% and 60%. It’s all this stuff that we talk about at MicroConf and on the podcast. 

If you’re outside of those bounds, usually I can look at like six numbers and I’m sure you can do it’s like the traffic, conversion to trial, the trial to paid, the churn, this, and that. You just look at these numbers and be like, yeah, that’s your worst one. You just feel it because you’ve been around it long enough. 

That’s why I like that question because I feel like, (a) a lot of people run into it and, (b) the answer is it depends on the stage but it is just kind of a framework. We know the SaaS metrics. I recorded a YouTube video a couple weeks ago, it’s like the six SaaS KPIs you should pay attention to and it’s everything we just said—the LTV, the churn, and this and that. 

Thanks for that question, David. Hope that was helpful. 

Next question is from Marcel Albrecht about stealth launches. He says, “Hey, Rob. I’ve heard you mentioned the concept of a stealth launch a few times. I’m curious, under what circumstances would you recommend a stealth launch?” 

I have a note here before I toss it to you. I’m not sure I’ve ever mentioned stealth launches on the podcast so I think he’s confusing me with someone else, but I figured, hey, it’s a question. It’s here, let’s dig in. What are your thoughts on stealth launches, Asia?

Asia: Stealth launches are so interesting because I’ve only ever encountered a few of them in my work at DemandMaven. There’s only been twice where I’ve ever worked with a founder. This is out of dozens and dozens and dozens of projects at this point, in addition to just meeting hundreds of founders. 

There’s only been two companies I’ve ever worked with before where they were in stealth mode. The reasons why they decided stealth mode was they were banking on a very big idea. They were on the path to raise […], which totally could be your vibe, not knocking that vibe at all. I think it’s a great vibe, if that’s for you. 

The third thing was, it’s not that they were worried about competitors copying their idea as much as they knew that they were on the brink of something. It’s a very innovative thing and they knew that they were going to have to dot their I’s, cross their T’s, get all their ducks in a row before they really went out and asked for the big […] dollar. It was really like, we want to make sure we are very, very, very clear that this is going to work or it is not, at least to the best of our ability. I did not work with this company, by the way.

Superhuman actually comes to mind as a company that spent a long time in stealth mode. People did not really know about Superhuman until they had already been building the product for 2-3 years. On top of that, had hundreds if not thousands of users, beta testers, come through the product, try it out, give feedback, and make it really clear where they needed to best innovate while also providing a ton of value. 

Some of the companies that I’ve worked with, those were the three main triggers. The tough part is I would say nine times out of ten, most companies don’t need to be in stealth mode. That’s my opinion. Every now and again, there is an idea that just feels so wild and out there. I wish I could actually talk about these two companies, but they are still technically in stealth mode so I can’t. They are just so wild and out there and on top of that, the opportunity is so big that they would do their due diligence to be in stealth for a while. 

I want to be clear when I say stealth mode, they are not publicly going to market. They probably don’t even have a website to be honest. They are likely taking on design partners or companies that can help them co-build the product.

They need customers, so to speak. They almost want these design partners to help give them enough feedback to help them build an even better product. Also, to just kind of prove that this is going to be something that’s going to be worth something. The long tail vision though is 10 years out. It’s not two years. It’s 10, that’s how big the vision is. Anyway, I digress. I’m curious Rob, what are your thoughts?

Rob: I mean, my thoughts probably kind of summarized yours, which is if you’re going to raise […] then maybe consider stealth mode. If you’re Superhuman and you have tons of funding and can go build in a basement for 2 ½ or 3 years, and you know what you’re doing because a founder had already reported and exited for a great exit to LinkedIn. If you’re in that case, maybe think about it. 

Otherwise, I would say that you have way bigger problems than stealth mode or someone stealing your idea. The problem is no one’s going to give a crap when you launch. That is 99 out of 100. I don’t know a B2B SaaS aside from Superhuman, but I don’t know anybody else where stealth mode would make sense. 

I started clamoring that we were going to launch because we’re not doing things that are that innovative. If you’re launching something that needs stealth mode, this is probably the wrong podcast for you because this is about more boring businesses. This is about, I’m going to build an ESP that’s better than the other ones on the market. It’s not like it was some huge innovative thing. 

Guess what I did the moment we decided to do it? I went out telling everybody we’re going to build this ESP. Here’s my landing page and our email. We can build the launch. I would go the exact opposite of stealth mode in almost every case unless you have some very unique circumstances, you’re very experienced, and you have a lot of funding. There’s some exceptions. 

Asia: You can work full-time on it and also maybe afford other people working full time on it, which is actually true for all of the companies that I worked with that were in stealth mode. Yeah, I completely agree.

Rob: Almost never, I think is the phrase I would use. With that, let’s dive into our last question of the day. I don’t remember who asked this question, but it’s in the Trello Board so we are going to answer it. 

“Is it possible for a SaaS product to penetrate the enterprise without a dedicated sales force? I will go so far as to say maybe not a full sales force, but what if the sales force is in the early days as the founder or founders?”

Asia: I love that question because it is spicy. Okay, do you have to have a fully scaled out sales team in the early days? Probably not. I will say you are going to have to have some killer sales skills. You’re going to have to have some really powerful sales and negotiation skills. On top of that, you’re going to have to be able to actually deliver against what you promised. 

The diligence process of bringing on enterprise is a giant pain in the early days, but you get to a place where you grow enough where it’s less painful, but still annoying for certain types of industries and verticals. 

Again, early days, probably not. At some point, you will look far more credible. Also, at the same exact time, you will see better performance and results if you build out an experienced sales team course within reason and also within budget. 

I honestly would argue that if you can’t afford relatively great talent here, then it might make sense to just wait until you can. If it’s only enterprise in theory, maybe a couple of deals, and now you’ve got a team. Early days, not necessarily, but you are going to have to be the best salesperson you can be.

Rob: I want to be clear here too. There are some SaaS apps where they have their $50 price point and then their enterprise plan is $500 a month. That’s not an enterprise actually. Enterprise, I think it was $30,000 grand a year up, $100,000 a year up. I mean that’s true for enterprise. You’re talking $5000–$30,000 of annual contract value. To me, that’s more mid-market. You can sometimes get through that without the enormously painful procurement. 

I’m in agreement with you as well. It’s not that you need a sales force from day one, but you need a person who is a great salesperson, if you’re going to sell into this space and you need to charge enough. That’s the big mistake I see. 

If my product is $50 a month and CVS comes in and wants to use it in their […], BestBuy, or Target, Fortune 5000 company, they shouldn’t be paying $300 a month. They should be paying $3,000 a month. 

They’re going to put you through the wringer procurement, negotiations, the security audit, the custom redline terms of service, and the invoices with POS with net 30. All this stuff is such a headache, you have to get compensated for it.

I usually say the moment I’m doing enterprise sales, the minimum ACV I want is at least—and this is bottom and scrapey—is about $25,000. Einar, who is my TinySeed co-founder, he’s like yeah, that’s too low. I think it should be $30,000 or $35,000. 

We have absolutely seen TinySeed companies closing deals with these big companies that are $60,000–$100,000 a year and these are SaaS companies that have $50 a month plans. The bottom line is the enterprise gets more value out of it and just selling to them is so cumbersome that you do need to price it appropriately.

Asia: Yeah, completely agree. In my mind, I was like a minimum of $10,000 a month. I think it kind of sounds like it could actually even be a little bit less than that and still be considered like an enterprise sale, which I think is great.

Rob: I don’t know. 

Asia: Who knows. 

Rob: That’s my interpretation, but for you and in your world, enterprise maybe $120,000 a year. That’s a perfectly reasonable amount because maybe mid-market is $10,000, or it’s $20,000 up $120,000, then enterprise is $120,000. It’s just how we define it. I don’t know if there’s any system. 

Asia: No hard rule. 

Rob: Bottom line is, if you’re going to deal with larger customers like this whether it’s $20,000 a year or whether it’s $120,000 a year, you are going to have to do high touch sales and you are going to have to be good at it. 

In fact, that is why all the SaaS companies I launched, none of them required high touch sales. Because that’s not my gift. My zone of genius is not in sales, it’s in product, it’s in marketing, it’s in whatever a little bit of branding. It’s whatever else got Drip, HitTail, and frankly, MicroConf, TinySeed.

Those things don’t require enterprise sales although TinySeed does because we have investors. Guess what I did? I have a business partner. Einar is the sales guy. I talk to investors, I hang out with them, but I don’t close the deals because it just isn’t where I am the best fit.

Whoever asked this question or if you’re thinking about this yourself, especially in the early days if you’re bootstrapping and maybe you don’t have other founders, you do need to think about, I should build a business that at least leans into my giftings and there are many ways to do it. You can build super low touch businesses, if you’re more in the marketing, left brain thinking through funnels. If you are better at sales than go after a business that requires that.

Asia: Yes, 100% Totally agree.

Rob: Awesome. Well, Asia, this is super fun today. If folks want to keep up with what you’re doing so demandmaven.io, which is your growth marketing consultancy for SaaS. Actually, your h1 is it’s time to stop throwing growth tactics at the wall. I like that. 

You are @AsiaOrangio on Twitter. Asia, you have a podcast called In Demand that has been on hiatus for six or eight months and you’re bringing it back. Tell us about it.

Asia: Yes, I am bringing it back. Actually, it was because of attending MicroConf and also a few other conferences. People mentioned it and they were like, hey, when is that coming back? I was like oh, I didn’t realize that was the thing people liked. 

Yes, I am bringing it back this season. We are on season three. We will be focusing on how to be a better CEO. Also, how to work with marketing leadership and how to think about building your marketing team. We’ve got a bunch of very big topics that we’re going to break down. These are just solo hosted by me. I’m kind of bringing together all of the research and insights and sharing them with all of you. I’m super pumped to bring it back. It’s a good time.

Rob: I’m excited to listen. I have listened to the first season, 18 episodes in your prior couple seasons, and the h1 on that is how to grow your SaaS to 100,000 MRR. I like that value prop. You can search In Demand podcast, obviously, in any pod catcher you use, but the canonical URL is in-demand.castoos.com Thanks again for joining me, Asia. 

Asia: Awesome. Thanks again for having me. 

Rob: Thanks for joining me again this week. If you haven’t checked out youtube.com/microconf. In addition to conference talks that we’ve been putting out, I’ve been putting out some 5–10 minute videos covering SaaS specific topics and its content that I’m not releasing on this podcast feed. It’s things like Bootstrapping VS Venture capital, what’s the right call, how I made $30,000 a month with SaaS, top five activities of a great SaaS Customer Success Manager, SAS metrics: the best guide to software as a service, KPIs.

That kind of stuff is pretty topical and tactical. There’s also some strategic thinking but it’s all around bootstrapping and mostly bootstrapping SaaS companies. So youtube.com/microconf if you haven’t already checked it out and you can subscribe. It’ll show up in your YouTube feed as these videos are released.

I’m trying to do one a week at this point so if you’re looking for kind of what feels like a little more Startups for the Rest of Us, even though it’s me solo, but you get to hear more of my thoughts on this topic and further your education and SaaS all the while having an actual video. We have editors that are making these things pop and making them interesting. I’d encourage you to check out youtube.com/microconf and I’ll be back in your ears again next Tuesday morning.

Rob: Today, we have another great episode of Startups For the Rest of Us. I’m your host, Rob Walling. This is episode 606, where I sit down with the founder of Castos, Craig Hewitt. He and I talk through podcasting. We talk about all the acquisitions that have been happening, podcast analytics, Apple versus Spotify. Then we switched it up and we talked about staying up to speed when you’re no longer doing a task day-to-day as your company scales.

We talk about keeping everyone on the same page as you grow. Castos now has 13 team members. Obviously, the challenges you face as a single founder are very different from what you face when you’re one of 13 people, and you’re just trying to keep the ship heading in the right direction.

Before we dive into that, our next round of MicroConf local events are scheduled for this summer. We have MicroConf Local in Chicago on June 21st and MicroConf Local in Denver on June 23rd. If you want to meet local bootstrappers in your hometown or want to make a short trip to join us, head over to microconf.com/locals to pick up your ticket. Remember that the MicroConf Locals are inexpensive. It’s just a few hours in the afternoon, so it’s a great way to dip your toe into the waters of MicroConf.

Currently, I plan to be at both the Chicago and the Denver event. If you can make it, it’ll be great to see you there. With that, let’s dive into my conversation. It’s not an interview. It really is just a back and forth conversation about a bunch of topics.

I always enjoy getting Craig Hewitt back on the podcast. With that, let’s dive into my conversation. Craig Hewitt, thanks for coming back on the show.

Craig: Hey, Rob. Thanks for having me. It’s been a while.

Rob: I know. Just three, four months? I think you came on for where they are now, TinySeed Tails season one episode.

Craig: Sounds about right. Yup.

Rob: Yeah, that was a fun one. Folks remember you, obviously, from TinySeed Tales. You’re the founder of Castos, which is public and private podcast hosting. In fact, it’s what this very podcast is hosted on, as well as our MicroConf podcast and TinySeed Tales itself.

I was pleasantly surprised earlier today. I wanted to install Chartable’s listener tracking. I guess it is download tracking, technical. I have the Castos stats. I think podcast stats are completely broken across most of the world, because I’ll look at one provider we used to use.

It had tens of thousands. I go to a different one and it’s a third of that number. I’m like, how can it be 10%, 20%? I was like, you know what, it’d be great to have a second provider. I already use Chartable for some other stuff. I was thinking, this is going to be kind of a mess.

There’s a prefix and I’m thinking, am I going to have to hire a WordPress developer to hack some HTML or RSS? You know where I’m headed. I just went to Google. I typed in Castos and Chartable. It was like, grab this little URL from them and paste it in your Seriously Simple Podcasting thing. It just worked, man. It was so cool.

Craig: Yeah. Both Chartable and Podtrac, the formerly independent podcast analytics platforms both acquired by Spotify a few months ago.

Rob: Both of them? Oh, I didn’t know that.

Craig: Yeah, both of them. That is one of the hottest topics in our industry lately. It’s like, hey, these independent third-party platforms are not independent and third-party anymore. What does that mean? Yeah, drama.

Rob: What does that mean? I know there are purists who say things like there shouldn’t be billionaires in the world or people who are really religious indie software companies only. As you get big and get bought, you sell out.

There’s, I think, folks who maybe think too black and white about it. But beyond that, maybe the zealots take on whether these folks should be independent or not, what are the pros and cons of both of them being acquired by Spotify?

Craig: I think the downside that I hear a lot is, obviously, Spotify will take that data and do things with it that they wouldn’t have had access to otherwise about your podcast and your audience. How bad is that? I don’t really know. I think a lot of the decentralized, DeFi crypto folks are up in arms about it. Spotify itself is very much the closed garden kind of provider in our ecosystem as opposed to Apple, Amazon Music, and all these that operate open RSS.

I don’t have a super strong opinion. I think that it provides an opportunity for another player to come in and do the same thing that they did before, open source maybe and things like that. I think that could be pretty cool. Yeah, podcast analytics are super tough just by the nature of the distributed system. Spotify has a different way that they approach it, because they’re not an open system.

Rob: Yeah, I think that makes sense. It’s funny. I’m not an open purist like, oh, that open source software should be everything or that crypto and DeFi. Obviously, I own some crypto, but I’m not necessarily in that camp. It’s just like, okay, cool. Whatever works, let’s have a competitive space.

If the open source software is free and the best, like WordPress, for example, which I use on Startups For the Rest of Us and robwalling.com, or if Squarespace, Wix, and these other are better, if you’re willing to pay $15 a month, not have to deal with the conflicts, and constantly upgrading, I think I have 20 plugin updates that I need to run on these sites, which is the free puppy aspect of them, I like to see it competed out and for there to be more choice. 

However, one big hang up I have is with Spotify buying these podcasts, like all the Gimlet stuff now, I just don’t listen to it anymore. Anything that is Spotify exclusive. We have a five-account family plan. I have Spotify in my car, it has an app. I have it on my phone with me. I listen to it constantly. I was just listening to it right before this. And yet, the moment that they walled off the podcast, somehow, for me was almost offensive.

I don’t know if it’s just because I’m what I’m used to. Podcasts should be open. They’re like email and HTTP. Or because I’m a podcaster, or if it’s just annoying that something that was once free, it’s still free, in essence, I guess with my account. But something that was once open is no longer.

Craig: Yeah, personally, we operate a lot in the open podcast ecosystem and in the WordPress ecosystem via our plugin there. I’m just a big believer in it. I didn’t come from a technical background, but open source is amazing.

Open source is amazing for the community, the developers, and the end users, but it’s also a really good business model. WordPress Automatic is an amazing business. There are a lot of different examples of it in different industries, where you have this open source tool that you can use however you want, and then there’s the hosted version or the managed version, Ghost, another popular example, like Fantastic CMS. It’s free. You can go install it on your DigitalOcean droplet or you can pay them $10 or $15 bucks a month. Those are for you. I think it’s great.

It creates a lot of community-based accountability, which I think is the most positive thing. It can be painful to make a lot of decisions, I think. If you get into the politics of open source, it gets messy pretty quick. But I think overall, it’s a really good thing for these bigger projects.

Rob: I didn’t plan to ask you this when we started recording, but I’m realizing we just touched on podcast analytics. You said they’re difficult because of the distributed nature of something. Why are they so hard? If I log into three different analytics platforms, we used to use Blubrry.

We use Castos now. I’m looking at putting Chartable on because it’s free and I already have it. I bet I’ll see a swing of 50%-100% in terms of download numbers. I know estimating subscribers, I’m not even going to go there because that’s just an estimate. I know that just raw file downloads are what you can track and see.

As a former developer, it seems like if it’s a partial download, at a certain point, you just don’t count it if it’s only 10%, 20%, 30%. But at a certain point, you do. If it’s 60% or 70% downloaded, I don’t know. There’s probably a number, and then everything else, you just look at the number of downloads. Why isn’t it just that simple?

Craig: I think there are two things. One is it should be relatively that simple. There are a lot of subjective decisions that we make when engineering around multiple downloads from the same IP address, how many do you count is one listen, and things like that. There are some subjective decisions we make, but there’s some guidance in the industry around how we should handle that.

We do benchmark our analytics versus Podtrac, and it should be the same with Chartable. It’s 10%, 15% off. If you see a bigger difference than that when you install it, I’d be pretty surprised. Yeah, it is all that kind of bots, crawlers, and artificial traffic that hit your RSS feed, especially depending if it’s on WordPress or on Castos, different traffic patterns in those two places. I think we have a unique challenge to solve in that respect.

I think the bigger challenge, if you look at podcast analytics versus web analytics, and Google Analytics or Fathom or whatever, we only have visibility to the file until it’s downloaded. If people want to know like, hey, can I get demographic information about my listeners? Can I see when they listened, for how long, and things like that? The answer is mostly no, because the file leaves our platform, and it’s just gone.

It’s on Pocket Casts on your phone and you don’t know. We don’t know when you listen to it. That’s the closed loop that a lot of people are looking for. Going back to Spotify, that’s where they really rock. They control the whole stack from the creator and advertising—they’re the advertiser. They have a closed relationship with the listener.

Rob: Okay, that’s good to know about that 10% difference, because I will take a peek at that and see Castos versus Chartable once I have enough data. With Spotify, do their downloads of Startups For the Rest of Us, would they show up in Chartable or in Castos? Because Startups For the Rest of Us is on Spotify. It’s also available everywhere else. Do they basically just download it once, and then they now distribute it? If there are 1000 people listening on Spotify and 20,000, listening everywhere else, it’s only going to show 20,001 downloads?

Craig: From our platform, yes. It’s because Spotify is the only platform that does exactly what we said. It takes the file from Castos, stores that on there and re-encodes it differently, and then distributes it from their system to their listeners. We have the option to not do that and have it be a pass-through kind of relationship like every other platform, but it would require us to re-encode the file that you upload to our system a certain way. We don’t want to do that, because we think that the file you upload is the one that your audience should hear.

Spotify says, hey, if you’re going to have a pass-through relationship with us, the file has to be this way, this way, and this way. We say we don’t want to have to do that for our customers that spend so much time creating this audio. We want you to be able to deliver that file to your audience.

Yeah, Podtrac and Chartable  should basically not track Spotify listens. That’s why you log into your Castos. You can if you directly submitted through us or if you just submit it through the Spotify podcast portal. They have a lot of analytics there. Just like Apple, a lot more in depth analytics than we have access to.

Rob: Right. Probably, I have not logged in. I probably need to, because I haven’t been counting those download numbers. Now I’m realizing I need to add them together. I know in Castos, you have a tab where if you connect it through your Castos account, you can then flip between the two tabs. It’s the Castos downloads and the Spotify numbers, where I assume you’re pulling it in from an API or something.

Craig: Yeah. Depending on your audience and where you’re located geographically, 20%-40% of your total audience is on Spotify.

Rob: Is that much?

Craig: Yeah, it depends. Internationally, it’s more younger generation, something like that, industry-wide.

Rob: Before TinySeed, after I left Drip, I had this idea that I wanted to make podcast analytics better, not do it on the server side, but basically go and acquire all of the client side apps that I could, like raise a fund and buy up anybody that would sell. Then you’d have real data if you combined Downcast with Overcast with Pocket Casts. Obviously, you’re not going to get Apple Podcasts. But if you bought five of them, 10 of them, or whatever, and had hundreds of thousands of users, at least you could kind of extrapolate.

It was right around that time that Apple launched their crappy analytics, where you can log in as it’s the podcast dashboard, and they started giving that information. I find that information not very accurate. It’s just way different than the Castos numbers, for example, or and the Blubrry numbers that we had.

Have you found those Apple numbers? They actually tried to give you like, how far people listen in and how many people there are, because they do have that client. Used to be iTunes now, it’s Apple Podcasts. What’s the consensus or is there a consensus around Apple’s numbers?

Craig: I think the consensus really broadly is a helpful indicator. It’s a directionality kind of level thing. But basing a bunch of your content decisions on that, it’s probably not helpful. It’s what I hear. I think that your idea and your hypothesis of that is right. Being able to access the end listener kind of behavior would be really helpful, especially for advertising, because they want to know about impressions, and that’s what it is.

I know that a lot of podcasting apps are quite privacy focused. I think, unless you bought them, you would have a hard time getting that data back from them. I think the hypothesis is good. The interesting thing about Apple versus Spotify in this respect is Apple is not incentivized at all to give you any of that data. Spotify, more so, because they’re monetizing that traffic. I think that’s the big difference.

Rob: Yeah, it’s such a trip. It’s still early in podcasting, I think. I guess you have a whole company based on it, so you probably share that. It just feels like it’s going to be built into all the cars, all the places.

Craig: Airplanes, yeah.

Rob: Yup, there’s a lot to be done there. 

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Let’s switch it up and talk about a topic that you actually brought up before we recorded, how do you stay fresh with the latest hotness when you’re not so close to the action anymore? This could be someone like myself who’s no longer a founder of a SaaS company. I’m still a founder of some other things. Or it could be you who used to, nuts and bolts, get in, do the blocking and tackling, and now you have 20 people working for you?

Craig: Yeah, we’re 13.

Rob: Thirteen, sorry. Why do I think you had 20? Approaching 20. I think I live in the future. I know that you’re probably still writing nitpicky marketing copy or ad copy somewhere, because at 13, that’s just not the right thing for you to be doing.

What are your thoughts here? How do you stay close enough to the metal that you feel like you’re able to strategize and that you’re not missing things because you’re not in it?

Craig: Yeah. I think that where we are is particularly challenging in this respect. I think that’s why I wanted to talk about it, because I’m sure you can relate, as we’re at the size where I don’t do a lot of real implementer level stuff. But we’re not 20 people, to where we have real directors, owner-level folks in every group of the company, to where I don’t have to really get into the weeds there. I do find myself, especially like sales and marketing, on sales calls and writing some marketing copy. Not as much certainly as I used to, but I do some of those things and answer support tickets every once in a while.

I find it challenging both in the context of what I asked or wanting to talk about in the question. How do you stay up with the latest marketing trends or sales, pricing models, and how to freaking run HubSpot, and stuff like that. The other side of that is, how do you not do a lot of that, and be able to take a step back and above, and think strategically about the business, and kind of be a CEO?

I think what I found, and this is interesting coming from a person that runs a podcasting company, is I read and listen to a lot more books now instead of podcasts, because I find that the temporal nature of podcasts makes them more trendy. To me, a book is more kind of evergreen. I can take the lessons away, and abstract the lessons away from a book, and implement them how I want and where and when in the business. Whereas, podcasts seem to be really super specific, and sometimes just very timely or not timely. That’s one thing.

I think the other part is just working with the people in our company that are doing the sales, or doing the marketing, or doing the support. Doing the product stuff, and just learning from them, and trying to stay up to speed with what’s going on and what they think are the best examples, and then pointing out UI patterns that we want to emulate and stuff like that.

I think at the end of the day, when I put my good founder hat on, it goes all the way back to hiring the best people who are able to bring me along in that journey through this valley of half pregnancy, because half the time, I’m a real CEO and half the time I’m in the weeds. For some period of time, I’m in the weeds and half I’m a real CEO. The folks on our team are able to help me stay fresh with what’s going on and help them make good decisions. The other part is just really being a leader.

Rob: Yeah, as you were talking, the thing that resonated most was about hiring the right people who can bring you along. I even think at a certain level, imagine if you had 100 employees or 500 employees, you cannot stay up on sales, design patterns, code, and any of the other stuff. That’s where you were saying, having directors or VPS who can stay up to speed on things.

It’s mostly a temporary thing, because when you hit a certain size, you being Castos, again, 20, 30, 40 people, I do think that you will stop wanting or needing to be up to speed. You just need good people who are up to speed. You need your implementers, your individual contributors, your designers to know design really well, and for them to hire those people who are inspired and think about it in their spare time.

When I was a developer, I used to bring books about software development to the beach. It was the nerdiest thing ever, but I was that person. It made me pretty good at my job, because I was thinking about it a lot, and I enjoyed it. I worked with people at Drip, some of whom are cool. They clocked in 48 hours a week, and then went home, and didn’t think about it. That was fine.

They were good folks who delivered. Then there were just those people who went the extra mile. They thought about product management over the weekend. It’s just different. I’m not saying better or worse, but you do need some of those people, because then they bring it back to the rest of the team. That’s what I would see.

They were the ones listening to the podcast reading the books. Then they’d bring back a new idea and be like, hey, so there’s this new innovation. It’s called flat web design. It’s called drop shadow or whatever, and then we’d get to debate it. But at least someone was bringing that into the team. I think that’s maybe what you mean by those folks who bring you along.

Craig: Yeah, at the end of the day, those are the folks who are going to bring these ideas to us and say we should do flat design, or we should do integration marketing, or we should do whatever. It’s my job to trust them that they have our best interests at heart.

I’ve communicated the vision of where we want to go. The idea they have is they think it’s going to get us there, and then just gut check that with what I know of things. Is that how it is for you? I’m curious about you. With TinySeed, it’s just at a different level.

Rob: Yeah, but it’s the same thing. I’ll give you an example with this podcast. I hired an assistant producer a couple years ago. He worked a bunch of good work for us over the past few years, and then he moved on. We brought in a full time person now who helps with all aspects of it. But he used to bring suggestions, because he would watch other shows and listen to other podcasts.

He was the one who said, you’re not really even sharing a tweet of the episodes, and so we started. I was like, that’s fine. It’s pretty low lift, a light lift to do that. Then he said, well, what if we started doing audiograms? I’m like, what are those? This was a few years ago, so you get out of touch with stuff. But he was my guy who was thinking about that stuff.

Then he said, can you record the video? I want to start doing short video clips and put them on social. I was like, it’s a hassle. Recording video, then we’re going to have to edit it, and then we have to tweet it.

Here’s how we made the decision. I said, let’s experiment for one month, so you’re going to do four of these. Then let’s see the time difference between that and an audiogram. Let’s see the views or the engagement difference. As it turns out, it was 2x-3x more engagement with a video. That’s how I view it.

Tracy brings stuff to us all the time like, oh, I want to try this new thing with the blog. It’s like, cool, let’s do an experiment over a short period of time, a month or a quarter. Let’s track how much mentally do I ballpark. Do I think this is going to cost us in time or money?

What are the odds that it’ll succeed? Is it even recent? If it’s a 2% chance of succeeding, that’s a no.  If I gauge it, deem it at 2% or we agree it’s a low. But if it’s probably got a 25%-50% chance, to me, that’s a pretty good bet to get another 1000 eyeballs or another 2000 views.

Craig: Yeah. I think podcasting with Andy Baldacci for our show, the thing I know he would add is you have to consider the outcome of that too, because it’s not binary. It’s not just, will this work or not? If it works, will the outcome be so much more that it’s worth the risk? I would just add that. I know that’s the thing he would say right now, because he always beat me over the head about it.

I’m sure that our team has a drinking game for me around this, but this is where we’ve implemented OKRs in our business in the last six months. This is where this really just puts all of that stuff in a good lens that is visible across all groups in the company and for me. We’re able to really sit down, make those strategic decisions, and then the implementation of it. Like you’re saying, it’s their ideas that come and we figure out how we’re going to reach these goals. On a quarterly basis, that’s the rotation, so it’s been helpful for us.

Rob: I can imagine. For me, staying fresh, like you already answered it for yourself. But for me, it is a lot of podcasts and books. I view my mental model as books are, like you said, more evergreen. They’re more strategic long term. There are some tactical books, but I actually don’t tend to read those anymore.

I used to literally read ebooks on how to run Facebook ads when I was running, but I just can’t. I’m not going to get in the weeds, because that’s going to change in the next six months. I know that I can go hire somebody who can do it way better than I could learn these days.

I still listen to podcasts. I struggle with interview podcasts. I try to make this show less about interviews and more about conversations. I have heard some pretty interesting conversations around new tactics that are coming up. There was someone talking about TikTok marketing for business the other day. As much as I don’t care about this, in depth, I don’t. I don’t care about the TikTok aspect. I do care that it’s a new thing, and should it be on my radar?

I view podcasts for me as fun, which most of my podcasts consumption is not around work, but the chunk that is around work, the 20%-30% that’s around business. I’m either keeping up with folks like you on the Seeking Scale podcast, or you and Dave on Rogue Startups, or Brian and Jordan on Bootstrapped Web, or I am listening to these shows that are throwing out the tidbits, the, hey, this is how someone’s doing TikTok or Facebook ads are really different, and they’re a lot more expensive, so I can put that in the back of my mind of like, okay, maybe I’m going to check that with a couple people, but is that the way this is moving now? It’s like information gathering for me and just trying to keep aware of the broader picture.

I would also say, for me, it’s a lot of conversations with founders like TinySeed and even MicroConf founders. That’s the other way that I keep up on something. Someone discovers something, posted in the Slack, or they ping me if like, hey, there’s this thing that’s working for us, and now I’m like, mental note A that that’s happening and B, that that person is now a resource. If someone just got LinkedIn ads to work, then you ping me in two weeks, and say, hey, do you know anybody with LinkedIn ads, or do you know how to run LinkedIn ads? I would say, I don’t, but that founder does.

That’s the other thing where I was saying earlier I’m not sure that we have to maintain expertise in these things. You don’t if you have a really strong network. You and I are in some Slack groups where the network is strong. If you had a question like, hey, I do want to run LinkedIn ads, you would just ask. You’d ask in the TinySeed Slack, you’d ask in the other founder Slacks that we share.

That’s probably the first place you’d go and be like, who’s running LinkedIn ads or who’s paying someone to run LinkedIn ads? People would weigh in, and that’s your shortcut. The network is a shortcut to certainly a better answer than googling it. Just a lot of thoughts.

Sorry, I turned that into a solo podcast there. In the early days, I talked about building a product, building a business, and then building a company—three phases. I haven’t gone super in depth into the specifics of exactly when that happens. Building the product is just the early scrappy days. You launch and until you have at least $10,000 a month in revenue, you’re still a product, and you’re just trying to find product market fit.

At a certain point, it becomes a business in the sense of your profit and loss. You just have to start thinking about it as this is something beyond just a hobby project or something beyond some code I threw up on the weekend. Company building, obviously, that’s where you’re at. That’s when you start thinking about hiring managers and you implement things like OKRs or Rocks.

OKRs and Rocks when it was two of you, and you were at $8,000 a month or whatever, it’s way over processed, over engineered. I think that leads me to my question. I’ve heard you talking a lot about Rocks and OKRs on Seeking Scale with Andy. So much, in fact, that I think I need to research it more, because I feel like for me, it doesn’t fit my style of work.

I’m not a process person. Tracy, who runs TinySeed program director. She is very much in the process, and that’s why she’s here, because Einar and I are not. OKRs and Rocks, which for folks who are uninitiated, it’s like setting monthly or quarterly goals, your annual goals, and then they all roll up to something, or they don’t, or whatever.

What has been your inspiration for pursuing these? Is it that it fits with your mental model, or is it that you got to a certain point when you’re like, oh, we need something better than what we’re doing now, because it feels like we’re maybe getting a little out of control?

Craig: Yeah, that’s a good question. An answer to that is we’ve done Rocks and now we’re doing OKRs. They’re very similar. For the size company we are, I think the difference is that OKRs can scale a lot more, because they can go at the company level, group level, and individual level. If you’d want where Rocks are just like a single set that is company and division level maybe, they’re both set quarterly.

The nice thing about them for me, and the reason we really liked them is it makes you. Now, for us, our team leads once a quarter say, what the heck are we doing? What’s important to us from where we are right now to 90 days from now? How does that relate to our annual or two or five-year goal?

It is how we start all of our group meetings each week. We say, hey, let’s open the OKR scorecard that we keep and see how we’re doing. In the Rocks world, those are the issues that come up. Like, hey, we have a roadblock here. We have developments behind here and marketing is slacking on leads. Why is that? Let’s talk about that and see how we can unblock ourselves and work towards achieving these goals.

I think longer term, the vision is that I will, again, move one step up in that goal setting stratosphere, and then the leads of each group will set, run, and report on those OKRs without me. I think that’s where OKRs are really powerful. It is a tool to give them the permission to focus on just a couple of things and a quarter. We’re still in super startup mode. We just want to do a thousand things. If you do a thousand things, you’re going to fail, so we do two or three things in a quarter.

We want to do them really well. We set really ambitious goals. We grade ourselves against those goals every week. If someone comes to me and says, hey, I want to start running LinkedIn ads, and we decided we’re going to only run AdWords, this quarter, we get to say no, unless there’s a really super compelling reason why we have to do it.

That has happened, but the answer is just no. This is our world for the next 90 days. Let’s focus on this and do it really well. I think it just helps everyone focus during that quarter, and then leading up to that quarter when we’re making those Rocks or OKRs in our case.

It’s almost like the little founder retreat. You get to say, hey, what’s important to me, our group, and the company in the next 90 days with a lens of, hey, in two years, we want to get to this point? I think if you’re less than five people, it doesn’t really make sense. Where we are, it makes really good sense. As we grow, it’ll be even more important.

Rob: Yeah, it reminds me of how I think about mission, vision, and values, where at five people, if you’ve come across it organically, great. If not, I wouldn’t force it. Right around that 10–15 mark, if you don’t implement something, it will implement itself. If you don’t create a company culture, one will be created for you, and you may not like it. They may not have the beliefs and be in line with the mission that you actually want to achieve.

I’m guessing the mission of Castos is not to serve podcast files to pod players. It’s like there’s something. There’s a higher level thing to bring audio to everyone or whatever. I don’t know if you’re public about it or if you have a mission that you’ve thought through yet.

Craig: Yeah, we do. It’s right on our website, tempo.castos.com. Everything about us is right there.

Rob: Yeah, this is really well done, man. You have a whole content guide. It says, our mission, “Build the most powerful platform to help creators create great content, and connect with their audience.” That’s pretty cool.

You have, how do we accomplish this and you have our purpose, our vision, or our values. If someone’s evaluating Castos as a potential employer, basically, if you have a job break out, then they can look at these things and link to themselves. Is this what I want to do? Is this fit?

Craig: I think as companies get larger and become more successful, I think that stuff is just so much more important. Everyone wants to work at Stripe because they know what they’re all about. We try really hard to be that darling, especially these days with those competitors. The market is, we are selling ourselves to candidates more than they’re selling to us.

Rob: Man, thanks for taking a few minutes coming back on the pod. It was great chatting.

Craig: It’s awesome. Thank you.

Rob: If folks want to keep up with you, obviously, you’re @TheCraigHewitt on Twitter, where you retweet extensively. I went and looked through your feed and I was like, he has a lot of retweets in it. It’s what I used to do when I was a little busy. When I’m too busy with Twitter, I actually retweet other people.

Of course, castos.com if they want to check out awesome podcast hosting for both private and public podcasts. Thanks again for coming on.

Craig: Thanks, Rob.

Rob: Thanks for listening to yet another episode of Startups For the Rest of Us, where you’d been listening for 6 or 600. It’s great to have you here. Thanks for joining me again this week. I’ll be back in your ears again next Tuesday morning.