Episodes

Rob: Welcome back to Startups For the Rest of Us. I’m your host, Rob Walling. This week, we have a ‘Where Are They Now?’ episode, where we look back at season two of TinySeed Tales. We talked to Brian and Scottie, the founders of Gather.

If you haven’t heard TinySeed Tales, it’s a podcast that I host. We do heavy production value on it where I have voiceovers, background music, and we cover the struggles, victories, and failures of SaaS founders. I do between 8 and 12 interviews over the course of a year. It’s about every month or two with the founder or founders who are going through TinySeed.

Season one ran through 2019 and it was Craig Hewitt, founder of Castos, who many of you have heard on this pod. Season two followed Brian and Scottie, who are a married couple who run Gather at gatherit.co. It is a SaaS for interior designers. That season aired in September and October, a little bit of November of 2020. Those interviews, I believe, ended around the summer of 2020, and then we aired them a month or two later.

It’s been about 18–20 months since I’ve spoken with them. During that season, they had struggled as the world entered COVID. They were not growing as quickly as they wanted. They were going upmarket. That was a big part of trying to raise their price and change who they were focused on. I believe when they first started season two episode one, they were around $4000 of MRR. It may have been $4500. When we ended the season, they were just getting over a cash crunch. They were looking ahead to, I believe, double their MRR in the subsequent year.

Today, in the conversation, we talked about how they’ve made it upmarket, how they’re looking to double their MRR again this year, and how their growth has accelerated since they found product-market fit. Of course, you’ll also hear my new segment: How did you know when you had product-market fit? With that, let’s dive in to my conversation with Brian and Scottie, the founders of Gather.

Brian and Scottie of Gather, welcome back to Startups for the Rest of Us.

Brian: Thanks, Rob. It’s good to be back.

Rob: It is so nice to have you. Folks who listened to TinySeed Tales season two will remember your trials and tribulations throughout that year of TinySeed. You were in batch one back in 2019. You graduated and became alums. Really, your business has gone up into the right since then.

We were talking before we hit record. You were making good progress during the year, but really something kicked in. I was caught like a bootstrapper hockey stick where it’s not the Facebook, Google hockey sticks that they talk about in Silicon Valley, but noticeable upturn going from you’d grow 500 MRR in a month. You’d grow a thousand and a thousand was a decent month. Then suddenly, it was 2000, 2500, 2000, 3000.

It was a really noticeable thing that happened in, really, I guess it was mid-2021. This was eight or nine months ago. When you started with TinySeed in the first year, you were doing just over $4000 a month, so under $50,000 a year. You’re on track now to 10x that number by the end of this year. My first question is, how does that feel to think about we’re about to 10x our business? Does that feel real?

Brian: I think it feels real. I think that the thing that startles me sometimes is thinking back to how slow things went in the first five years of Gather and how that compounding growth starts kicking in. When you’re living just in the moment and you’re trying to set goals, for us, it’s doubling this year. You think, oh, well, we can double this year because we’ve more than doubled last year and then we doubled the year before. But where it really starts to get interesting and exciting is just seeing the compound trajectory go steeper and steeper.

Rob: What do you think has been the cause of that?

Scottie: I think it’s hard to tell exactly the reason for that growth. I attribute it to us finally getting our footing with the right set of customers like the right customer. When we started TinySeed, we were catering to a smaller design firm, a solo designer. Anybody who listened to Tiny Tales would know that we started to go towards the larger teams. I think that saved us in the end, especially with COVID.

There’s some churn there during COVID. When we ended up on our exit checklist, when we asked them why they turned, we added COVID. There were a few that did say they were leaving because of COVID and they were always the smaller, the solo. I think that actually focusing on teams and building platform geared towards team communication and collaboration, especially for COVID teams looking to work remotely, it was almost like we didn’t know that was gonna happen, but it was the best thing we could have done. 

When COVID happened, I think design teams were looking for a tool just like ours. I think that was really beneficial.

Rob: A big theme of your episodes of TinySeed Tales was moving upmarket. Every episode, I kept saying, you’re going upmarket, you’re moving upmarket, this is the process, and we don’t know how long it’s going to take. It seems to me it took longer than we all thought. But once that happened, it really clicked all at once because your churn plummeted at that point.

You had increased your prices three or four times, which is the definition of going upmarket. I remember you increased prices a couple of times and I’m not sure your product had caught up with it yet. I think it maybe took some development months, some cycles to get there. Do you agree or disagree with that?

Brian: Yeah, I agree. Also, it occurred to me too that when we were going through TinySeed and you were mentoring us on going upmarket, somewhere I think towards the end of 2019 we decided to shut off self-service and we went to a demo-only model. We did that for almost a year while we were trying to build the product and gear it towards the customer that we were trying to attract and work on language and positioning.

I think that that was a good decision, even though we didn’t go real fast. We were going slow that year or we were going at the same speed, but we were learning a lot more from our customers because we were talking to them, sales demos, and learning about what they needed while we worked on the product.

Sometime (I think it was) at the end of 2020, we turned the self-service back on. We had a dual model, both sales demos, and self-serve. That’s right around the time when things started to go out. I think you’re right. I think we had found the right product for the customer that we were trying to attract upmarket. We gave them more flexibility as to how they chose to sign up and come into our funnel.

Rob: Yeah, and oftentimes, growth like this comes from a lot of different factors hitting at once. It can be hard to determine exactly was one thing? Probably not. It seems like it was a combination of things. I know that it was towards the end of TinySeed Tales.

I think we recorded the end of those, let’s say, the end of 2019 maybe. No, because we were in the pandemic. It was mid-2020 that we recorded the end of those. I remember that you weren’t growing as fast as you wanted. You wanted to both see if you could retain some customers, but also try to accelerate your short-term revenue.

Scottie, you and Brian added a consulting service, in essence, to where you were going to help your customers and you were going to charge them a monthly rate. I think of it like a design pickle but for interior designers, where it’s like, pay us $800 a month or $1000 a month, then I’ll do all these things for you. Because for folks who don’t know, Scottie, you yourself used to work in the interior design space.

I don’t think we ever wrapped that up. Do you want to let folks know? Is that a roaring success? Is that still happening or did it just fizzle out?

Scottie: Sadly or however you want to look at it, it did not pan out the way we wanted it to. In hindsight, I think that’s probably a good thing. It required a lot more of my attention than I had anticipated. Literally, I almost felt like I wasn’t focusing on Gather, the product, anymore. I was just focusing on Gather services.

I was doing, actually, more of the work than I had anticipated doing myself. I, all of a sudden, found myself in a job. I didn’t really want that and I couldn’t really figure a way out of that quickly. It’s something that maybe over time I could have figured that piece out. The ROI on it just was not there.

I had one firm that we were piloting the program with. They were really gracious and let me stumble my way through it. Then we ended up just killing it after we were done with those two projects with them.

Rob: It’s one of those bittersweet things perhaps because long-term, do I really want services in my SaaS? At this point, I’m not sure that you would want that to stick around. But I know in the near term, you were in a cash crunch for a bit and wanted to be able to pay your devs and do all that. It’s an experiment. We’re entrepreneurs. We try a lot of things. Some of them don’t work out. Many of them don’t work out and I consider this one of those.

I’m not sure if you know, but I have a new segment on Startups for the Rest of Us. It’s called, How did you know when you found product-market fit? I’m asking this of all the founders that come on the show because no matter how many times we talk about it, if you’ve never seen or achieved product-market fit, it’s still this very I-know-it-when-I-see-it type of thing. I want to get one of your perspectives on, do you remember when that happened, how did you know what that felt like, and how did you identify it?

Brian: I guess, for me, it wasn’t like a binary, black and white thing. You’re right, you know it when you see it. I definitely think we have it now and I feel confident. I just think that there are some signals that you can look out for.

For us, like I said, it wasn’t just all of a sudden, one day, we went from zero to 60. I can say it definitely turns a big signal. Our churn had been slowly dropping over time to the point where it got to be pretty predictable as to what range it would fall within and it was to the low end of the margin.

In fact, I even remember looking, we used bear metrics for our analytics. They’ll actually let you look at where you lie in the cohort that you belong to as far as your revenue is concerned. We watched ourselves go from medium to not so good into the best cohort repeatedly.

That was actually an interesting way to feel like we’ve got product-market fit and then just having customers that stick around for a long time so you can watch your lifetime value just come up, and up, and up, and up. It got to the point where our lifetime value became 10x what it was just a couple of years prior. A lot of that is because they’re not churning out and they’re happy. Those were signals that indicated to me that we truly had product-market fit and we were probably ready to start scaling more seriously.

Rob: It’s a good answer. Like I always say, it’s a continuum and it sounds like it was. It’s always a long process. It’s never like, oh, now we have it. You have it with a certain audience. You have it with a certain size. If you went after a massive hotel chain, you wouldn’t have it. You need different features and all that, but that’s a good perspective.

I want to regale you with a little story that happened in summer 2021. I’ve logged into TinySeed Slack. I don’t remember if it was advice needed or if I got a DM, but it was from Brian. Basically, our hair is on fire. Our entire app is catastrophically down.

I’m just going to come out and say it, it was the worst moment. I always asked what was the best and the worst since we last spoke. I think this was the worst moment for the two of you and Gather. Your entire infrastructure—what happened with this? First, let’s give the facts, what happened? And then I’m going to ask you the question. You tell me what it felt like in that moment because I’ve been there too.

Brian: Yeah, that was awful. I think I literally did text you in Slack and say, hey, Rob, do you know any really good DevOps guys? Which is always the lead question to something really bad that’s just happened. We run on AWS all over infrastructure, not to get too technical, but we used some automated infrastructure tools and processes.

Our developer who wasn’t really that knowledgeable of the infrastructure set up, he tore down the infrastructure, basically, just by accidentally running a script that he thought was innocuous and he brought the whole infrastructure down. Meaning, he literally tore down the entire infrastructure, like deleted all the servers, all the provisioning. That, of course, crashed the app for our users.

Due to some technical reasons, we couldn’t just press some buttons and then reload the infrastructure. It wasn’t the best time for me or Scottie, me from the technical side and Scottie from customers beaten down our door.

Rob: Yeah. And so you couldn’t just run a script and redeploy. Things are on fire. Customers are probably calling in. I don’t know if they have your number, but they’re certainly emailing in live chat. They can’t live chat because it’s down, so they’re emailing. Scottie, what was that like?

Scottie: Because I was doing support from the beginning and so many people have my personal email, my inbox was just filled to the brim. They weren’t happy. They were frustrated. I think the frustrating thing for us was that we didn’t know how long it was going to take to get it back up.

Our engineer would say an hour, two hours, three hours. That turned into 14 hours, 16 hours. Basically, I finally stopped giving them a timeframe. I just would say, I’m very sorry, we’re working on it, we’re doing our best.

I did actually pick up the phone and call some important accounts that I wanted to reassure that this wasn’t a data issue. Their data was safe, the site was just not accessible. It was damage control for sure.

The thing that I realized once my blood pressure had dropped, I calmed down, reevaluated the situation, and maybe took a couple of days, but our customers were so surprisingly forgiving. I think, in a way, it made them realize how valuable Gather was for them because they couldn’t access it all day.

They were like, oh, my gosh, what would I do if I couldn’t use Gather ever again? In a way, it was awful, but it was also encouraging to see how valuable we were for them. I think it made them realize that as well. That was interesting.

Rob: That’s pretty cool that you didn’t lose any customers. It shows the level of trust that you’ve built with them, that they figured, hey, this is a one-time thing. And although we’re mad and frustrated, we’re not going to bail.

The other interesting thing I found is there is a product-market fit survey that Sean Ellis developed. One of the questions is, how disappointed would you be if you could no longer use the product name? That’s another way of how you knew you had product-market fit. That is pretty cool.

Brian, you and I messaged and I said, hey, there’s a few people in TinySeed or whatever that could help out. But you mentioned specifically that some TinySed folks were super helpful in correcting this.

Brian: Yeah, it was amazing because when you’re in a situation like that and you’re like, who do I know or who can I reach out to? Had I not had such a great TinySeed batch to reach out to and then, of course, yourself to reach out to it would have been terrifying.

I just jumped on Slack because, obviously, TinySeed has a really great Slack community and just put out the bat signal. Several people actually came and swooped in to help. Shout out to Andy Hawkes. He was amazing.

Rob: Yeah, let’s give him a plug, loadster.app. He was in batch one as well. I actually love his h1. Your site has a breaking point. Let’s find it before your users do. It’s load testing your web app. He’s really good at all the DevOps stuff and I know that he worked with you for several hours just to help because it’s a relationship. You’re part of the same community.

Brian: Yeah, it was amazing. He literally dropped everything he was doing to help us out and helped to get the site back online and point us in the right direction. Just having those relationships are just so critical. I can’t imagine going through the world without the network that we’ve built with TinySeed.

It was amazing, and obviously, you helped out. We wound up finding some really awesome DevOps guys. They got things back up and running overtime. It took months, honestly, to really get things to the point where they were stable.

We’re still working on things that aren’t directly related to that whole incident, but that made us realize how much technical debt and infrastructure debt we had gotten ourselves in over five years. We have almost climbed out of that, which is a great feeling.

Rob: Yeah, it’s that hidden cost of technical debt that you don’t see until it comes and bites you like that. The outage, how long did it wind up being?

Brian: It was like a little roller coaster where there’s one big dip and then there’s a bunch of little twisty turns. The first one, I think, Scottie is probably about right, it was 20-ish hours, probably.

Rob: Catastrophic.

Brian: Yeah, awful. After that, we’d go down for an hour here, a couple of hours there for probably a week or two. Then in the back end, we’re just scrambling to make stuff work. There were points where the site wasn’t totally down, but key features were not working. That continued, I’d say, for two or three weeks at least.

Rob: That’s a bummer, but you’re pretty much wrapped with that and dug yourself out of that technical debt.

Brian: Yeah, it’s a bummer because you want to work on features and stuff but you realize, once you get to any level of scale—and we’re not super big or anything, but we’re big enough that we can’t mess around with core performance, infrastructure, and reliability—it’s just too important. You do what you have to do, you pay the debt off, and hopefully, you move on.

Rob: I actually talked with Brian last week. He was asking me questions about you having this growth so now you have more money. Oftentimes, it’s hard to decide where to spend that. What’s been your process? If you grow $2500 in a month, you’d grow $10,000 over the course of a few months. Suddenly, that’s recurring revenue because it’s SaaS and it’s the cheat code of business.

What do you do with that? Because I know that you don’t want to put that in the bank. You don’t want to take it out and spend it on lavish vacations. You want to grow your company. That’s why you’ve been building it for this long. What’s been your thought process behind how do we deploy this newfound capital?

Brian: Scottie can attest to this. I probably spent an unhealthy amount of time on runway spreadsheets and try to analyze all the avenues, I guess. I think what we came to is, we’re really going to focus primarily on brand building, long-term play stuff, primarily really high quality content, and probably share that through the community. I think that’s probably where we’ll spend a lot of our money and energy.

We’ve also had some decent success, I think, with advertising. We’ll be doing more of that. It’s cool to see as revenue goes up and after you get to the point where all of your base expenses are met, then you can start to think about things like advertising and content being a percentage of MRR, percentage of growth, and then watching how that works.

I’d say it’s still in the early days of us figuring out exactly what works. I don’t know if Scottie feels the same way, but I’m comfortable with the next two years building a brand rather than always jumping from how do we make enough revenue this month to stay alive. We’re a little bit beyond that where we can sit back and go like, what kind of company do we want to build over the next three to five years? That’s a better feeling for me.

Rob: I was going to say I have this kind of three-step mental model of, in the early days, we’re building a product and it’s writing code, it’s trying to get people to use, it’s trying to get a few paying users, and then the next step. It’s usually between, let’s say, $10,000 and $20,000 MRR. It’s like you’re building a business.

Gather became a business under my definition around that time as well. Then the step after that is when you’re building a company. That’s where you have a lot of choice. You start hiring, maybe you hire your first manager. It’s just a different phase. I think you are solidly in that.

Now we’re building a business. Businesses have repeatable processes. They have repeatable marketing approaches. They usually have more predictable growth. I feel like you’re now squarely in that.

With that in mind, Scottie, what are you most excited about? In true TinySeed Tales, end of episode fashion, what are you most excited about over the next 6–12 months?

Scottie: Exactly what Brian’s talking about, it’s just building our brand. I’m leading the charge on the content side since it’s my industry. Like you said, when you’re first starting out, you’re so heads down and just trying to build the product, sell it, get users, and make sure you have product-market fit.

For me, I was deep into customer success and customer support. I’ve wiggled my way out of this actually being the front person on the support side, which really freed me to focus more on what I’m more excited about, which is building relationships and building community with industry partners within the industry. I’m excited to focus on that this year now that I’m freed up to do that more. I’m looking forward to that.

Rob: It’s a luxury when you’re not scrapping for survival, to be able to work on the business, instead of in it. You fire yourself from the jobs that you don’t want to do in the business.

Scottie: That’s been really nice.

Rob: How about you, Brian?

Brian: I think Scottie said it perfectly. I would say, for me, because I’m more focused on the product side, building our product team, getting to the point where we can actually add a lot of value on the product side, and continue to choose what direction we want to go with as far as our customers or potential customers are concerned.

I’m really excited to take on the product side again, build more features because I think there’s a ton of opportunity. There’s more opportunity than we realize in our marketplace and even in our product category that we haven’t even tapped into. I think there are several different directions that we can go. I think it’s exciting to go after a direction, see where that takes us, and maybe even enter into new markets down the line.

Rob: I was going to ask what’s next for Gather itself, but I think you answered that question right there. Thanks again so much for joining me for this, Where Are They Now episode of TinySeed Tales. If folks want to keep up with what you’re working on, gatherit.co.

Brian: That’s the one.

Rob: Thanks for joining me, you two.

Brian: Thanks, Rob.

Scottie: Thank you.

Rob: Thanks to Brian and Scottie for coming back on the mic with me. I hope you enjoyed that lookback episode. Thanks for joining me every week. It’s great to have you. I’ll be back in your ears again next Tuesday morning.

Rob: In this 594th episode of Startups For The Rest of Us, I talk with Dan Andrews and Ian Schoen from the Tropical MBA Podcast. We cover the gamut, but we talk a lot about how they’ve started over. They’ve started a new business after selling their physical products company back in 2015, I believe it was. Then, they run their community, the Dynamite Circle, and they have in-person events and a podcast. It’s very much a sister podcast of Startups For The Rest of Us. It’s just that they don’t focus necessarily on SaaS. 

They saw a need within their community. It’s a need that would be really hard for most people to bootstrap because it is a two-sided marketplace, but Dan and Ian have the advantage of having an audience on one or both sides of that marketplace. You’ll hear how we talk through that in today’s episode. Thanks for joining me as always. Let’s dive right into our conversation.

When I introduce you guys, I never use your last names. I always say, do you know Dan and Ian from Tropical MBA? It’s like Tropical MBA is your collective last name. 

Dan Andrews and Ian Schoen are joining me today. Gents, thanks so much for coming on the show.

Dan: Yeah, a pleasure to be here.

Rob: I described the Tropical MBA Podcast, which used to be called the Lifestyle Business Podcast years ago, as a sister podcast of Startups For The Rest of Us. The two of you are some of the few podcasters who’ve been doing it longer than I have. There aren’t many people I meet who’ve actually been cranking on this. 2009, is that when you originally launched?

Dan: Yeah. I appreciate that. I do feel very similar themes and very similar ethics. One is Ian and I are very concerned that our business chops coming from doing actual business is a bigger deal than the podcast business itself. That’s something that you guys have always had. I guess the difference is that 25% of our audience are developers. The rest are ecommerce owners, publishers, and affiliate marketers.

Rob: Courses, info products, ebooks—that kind of stuff. Crypto, a lot of crypto going on in there. That’s how I think of it too. There’s a Venn diagram of overlap. 

But you came with digital nomadism. That was how you started. The Lifestyle Business and then Tropical MBA—when I used to listen to it, I was like, this is super cool. I’m not going to strap on a backpack and head to Chiang Mai, but these dudes are living this pretty amazing life.

Both of you have settled down a little bit in Austin, Texas now. Do you feel like the digital nomad aspect of the early emphasis is still alive and well? Do you emphasize that as much, or do you feel like it’s more of a business focus?

Ian: I think it’s always hopefully been business-focused, but definitely, we had a lot of lifestyle in there. Obviously, COVID has slowed things down. We are both based in Austin, Texas. For us, there have actually been a lot of huge benefits to that. We got to sit down over the last couple of years and restructure our business in the way that we operate and interact with each other. It’s been amazing because we haven’t really been in the same place for this long together. I thank COVID for that certainly.

Dan: I also want to point out that one of the things Ian and I often talk about on our show is that our digital nomad journey was one of necessity because you were a California developer typing up websites. We were California marketers and manufacturers desperate for development support. We couldn’t afford it in California, so we went to the Philippines and Vietnam to hire our first group of developers and marketers. Along the way in the early days, we were like, this is amazing. This is actually a thing. We’re making money doing this.

We started sharing that journey on the podcast. I believe we were the first regularly publishing bloggers or podcasters that owned a physical product’s location-independent business.

Rob: That’s pretty incredible. That’s the thing. To my knowledge, you never sold the Make Money Online courses. You didn’t monetize the podcast like, hey, we know how to do business and we’re going to teach you how to do it. It’s been so much more about building the community. 

You have the Dynamite Circle, which is a paid online membership community that you had long before we had MicroConf Connect. Then, you have started in-person events. Was that because you heard us (Mike and I) talk about MicroConf? Were you influenced by that? I think you launched those after us because we started in 2011.

Dan: In those early days, we were inundated by emails from listeners basically saying, we really want to know who else is out there. Where are you guys? How do we do this?

Ian and I did launch a seminar business in 2012 where 44 students paid us $2000, but we actually way over-delivered. We had people come to an island resort. They stayed with us for 10 days. We did presentations, workshops, and masterminds every day.

Rob: I remember those now.

Dan: Ian and I just were absolutely exhausted emotionally. We realized we can’t help you guys build a business in 10 days. It was interesting and a lot of great businesses came from it. 

It was during those seminars that we were like, what if we just rented a nice hotel and got everybody together? That was the first DCBKK in 2012. We were there and it’s just like a light bulb went off. We were like, people just want to meet each other and we’re getting more credit for their business growth just by throwing a party than we were by doing 10 days worth of teaching every day.

Rob: That’s the thing. I’ll say before 2009, the old info marketer model—Dan Kennedy and those folks—was always to be the guru. It was, I know the stuff and I’m going to teach you. 

I feel like that model switched with our generation because actually if you go back and listen to early Startups For The Rest of Us, I was trying to be that. I’m like, I know all this stuff. Probably by episode 30 or by the time we got together at MicroConf, I remember thinking that the value here is getting people together in a room like you said. They want the relationships versus no one person here knows it all, contrary to what Internet marketers used to claim.

Ian: Yeah. The guruism didn’t really go anywhere. You can still see that DNA in our marketplace, but I think the transparency allowed this new practitioner-preacher, or we call it the Chops Index. It’s like, watch me do my thing right in front of you every week. That’s solidarity, trust, and peer-to-peer. That’s something that people were probably even more interested in. You want to meet your peers and your people as opposed to kissing the ring of Dan Kennedy if you pay the right amount of money for inner circle access.

Rob: That’s always been something that resonates certainly with me and why I’ve been a listener since 2009–2010 of your show. Why a lot of folks resonate with it is that you’ve always been practitioners. 

While you started the Dynamite Circle community, you had a business manufacturing cat furniture and valet podiums. You sold that business in—I’m going to try to remember this because I believe I heard the episode when I was in an apartment in France with my family. You know those moments where you hear something and it’s like, I remember what the apartment looked like and I remember the kids were younger, but what I don’t remember is what year it was. I think it was 2015, is that right? It would have been fall, September, October?

Ian: I think it was summer because I was in Greece. I remember where I was too. I was on a hotel bed signing these documents. This was the biggest deal that we ever did. I was signing these documents, and then the next day, I got sick. It’s like when all your adrenaline just runs out of your body.

Rob: Yeah. It’s like, I’m signing millions of dollars in documents here. You’re probably doing it on your iPhone with your finger. I did one of those too. It’s the kid’s cello camp and I’m supposed to be in there managing the kid. They’re like, we got to get these docs signed. I walked out, and the teacher gave me a bunch of crap about it. I was like, you need to cut me just a little slack. I am the most stressed I’ve ever been.

You guys sold that business and then within a couple of years launched Dynamite Jobs, which we’re going to talk quite a bit about today. Tell me if I’m describing it right. It’s a job board and an online recruiting help. Those are the two focuses.

I’m quite familiar with it because we at TinySeed proper have used you to help fill two of our roles so far and then a bunch of the TinySeed and frankly, MicroConf companies when they go to hire. I have used your flat fee recruiting service.

This is a lesson I learned. As we were building Drip, I was cash strapped, bootstrapped, and doing all the hiring myself. By the time we got to 10 people, that’s basically half my job for 10–20 hours a week. I was doing it and I hated it. All the recruiters I talked to are like, yeah, 20% of first-year salary. I was like, this is […] insane. 

I was looking all over for a reputable recruiter that I can trust who I can pay $3000, $5000, or a reasonable number because I could have afforded that, but I couldn’t afford $15,000 or $20,000.

When we got acquired, we had two or three in-house recruiters and I was able to basically let them do all the hard work and then just pick the best candidates. I thought to myself, I will never go back. When I leave Drip, if I ever hire again, I’m not doing it myself.

When you guys started talking about it, I was like, this is a baller idea. I believe right now you charge $3500–$3600, a done-for-you recruiting light is how I think about it. You market it, you sift through the resumes, you do the pre-screens, and then you hand the best candidates off. Is that a relatively accurate description?

Ian: Close. The price is a little off.

Dan: We just raised the price. Thanks for the shout-out, Rob.

Rob: How much is it?

Ian: If we do the recruiting for you, meaning we handle the whole process and we place the person in your company, it’s $5500. We do have a lite version of that where essentially, we screen candidates for you, but we don’t actually talk with them on the phone. That’s $2000. Going down from there, we have our posted job offerings basically.

Dan: We do all the promotion. For me, I feel this anxiety when I come to a job board. It’s like, oh my gosh, all the work’s ahead of me right now. I got to compose something that’s interesting. I got to market it. I got to decide whether this is the right job board or not. It’s not like I do it four times a year, so I don’t know if this is the best job for marketers.

I think we tapped into that negative emotion of, we’ll take care of it for you. Don’t worry, just get on the phone with us for 15 minutes and we’ll take care of it for you. That’s this business generation heuristic that we’ve seen over time in our industry which is blank for the rest of us. 

There’s this really established recruiting industry—like you said, 20% of first-year salary—in tech. Everybody knows about it and it’s enormous, but they get so well-compensated for serving in their traditional niche that they’re not going to cross the chasm, come over, and do it for the rest of us.

As our peers mature and become the next generation of business leaders, there’s a big opportunity for listeners of this podcast just to provide professional and marketing services for the rest of us. That’s essentially what our DJ recruiting product is.

Rob: How did you get there? Again, you sold your company in 2015. You’re running a successful podcast. You have an online and in-person community and that’s a business unto itself that is profitable. Where was the spark or the click of, this is what we’re going to spend the next decade working on? That’s a big commitment to this. How did that come together?

Ian: I think the Genesis story of this goes way back to the Tropical MBA, which is essentially trying to find people that we could afford, oftentimes there in other countries, for our business. It was our competitive advantage. Even going back to the manufacturing company back in the day, we couldn’t afford to hire designers, developers, and marketers in California, so we had to look abroad essentially. I think we became pretty good at it and people recognized us as having that talent of being able to find these people. 

There’s another Genesis story, too, which is essentially in DC, which is our community. People were bombing into the forum basically saying, hey, I’m trying to hire somebody. Does anybody know anybody? Hey, I’ve got this job. Would you like to work? It was, in a lot of ways, clogging up the forum. 

There are a lot of different instances of this happening when you own a forum—people coming in and pitching or whatever—but one of the biggest things that we saw there were people trying to pitch job opportunities, so we thought, hey, what if we start marketing these roles for people? That was essentially the Genesis story for Dynamite Jobs.

Dan: We have over 1000 members in there. We were like, if we could just harvest these jobs, that would earn a really impressive audience. Our members are hustling startup founders. They were starting, in some cases, to use our events as hiring fairs. They were realizing that the quality of a remote-first primary candidate, somebody who really understands what we’re doing, is so valuable that they were willing to risk their reputation in the group to build their businesses. They didn’t want to go to indeed.com or other communities that just don’t “get it.” 

We saw that annoyance and that scratch your own itch. People were trying to jump on our bandwagon to leverage our brand to do this anyway. Why don’t we help them turn around and turn an annoyance into an opportunity? 

It was interesting because we just started basically saying, look, we’ll put all our energy into promoting your jobs. Thanks for being clients of the DC private members. We’ll work on your behalf to find great people for you. 

We essentially just did that for years and didn’t make any money. We put a lot of our backs into it and we saw it in the audience. Dynamite Jobs was the fastest thing we’ve ever grown. I always felt like Ian and I were always putting brick after brick after brick. This was really the first thing where we saw some levers. It’s like, oh my gosh, we have 10,000 email subscribers all of a sudden. 

We saw an opportunity during the pandemic to step in with our full-time effort and to try to turn those eyeballs into revenue.

Rob: Got it. Did it start with the job board, then hey, we’re going to allow folks to post and charge a fee, or you weren’t charging early on and you were just promoting?

Ian: We hardly charged anything. A lot of the companies that were posting jobs were DC members so essentially, our value prop to them was, hey, you’re a member of our community. Let us help you find these people that you need. We either charge nothing or very little. 

Looking back, it was amazing the amount of running around that our team did to try and fill these jobs. Our key metric back in the day was the number of jobs filled, which if you look at it is still a good metric. We still keep track of it, but it’s a ridiculous one because half the jobs people post gets abandoned or blown up for whatever reason. As a founder, you change your mind halfway through and here we are, scrambling for basically no money to fill these jobs. 

But it was a really good exercise for us because it taught us actually how to fill a job. That’s when we started to think about the recruiting service essentially. This wasn’t just going to be a job board, per se, but there was a services component behind it.

Rob: What you’re talking about is providing an enormous amount of value for free upfront, more than anyone else would be willing to do. That’s what you’ve done with your podcast. You have hundreds and hundreds of free episodes educating folks, and then you start this job board and you essentially do what anyone else would charge $3500 for a 30-day job posting. They don’t do anything beyond that. It sounds like you just gave value. 

This is one of those things Dan asked me about when I was on your show a few weeks ago. It’s about how I say never bootstrap a two-sided marketplace. You can do it if you have reached into one or both sides of that market. If you already have an audience on one or both sides, it’s much easier.

It’s still hard because you’re fighting a war on two fronts, but you guys have reached into that space and you’re willing to take this approach that not a lot of people are, which is to have staff working to fill these jobs. Nobody does that. That’s why I think this has been successful.

Dan: In 2019, our revenue was less than $5,000.

Rob: But you had the DC basically. You had staff working on the podcast in DC and were able to see if it was that compensating.

Dan: That’s right. Our membership is a profitable business, so we thought, this is a really interesting marketing and services arm. We’re providing these services on behalf of our members from their dues. We have a full-time person trying to maximize the number of placements. That built a lot of relationships on the side.

I do think it’s interesting though. Things changed when Ian, myself, and our CTO, Simon Payne, got involved. That was probably late summer, fall 2020. 

Our website fundamentally looks similar to what it did in 2019 from a passerby. It’s all that stuff that’s happening below the website. That’s a message for makers. Getting on the phone with your clients and having that calendar link front and center, those conversations ultimately led us to our monetization paths. What we’re able to do with that service’s revenue is pump it back into our platform in building technology for our users.

Ian: If you back up a bit, number one, Rob, we cite you all the time. In our meetings, we’ll be like, Rob said not to do this, man. We probably shouldn’t be doing this two-sided marketplace. That still comes up all the time. 

But if you back up and you take a look at Dan and myself, we’re not software guys. We never have been. We’ve tried a couple of times and this is our first go at it. 

If you look at the history of Dynamite Jobs, it was a service-based company. We started with a WordPress site and we started literally running around trying to solve people’s problems. That’s been an advantage for us because we couldn’t just go off and write software to solve these problems. We actually had to physically do the work and figure it out. 

It did get to a certain time where we brought Simon on, our CTO, where we figured out, hey, we’re starting to connect these dots, have a platform, have these profiles, and make it easy for these candidates to apply to jobs. This stuff all makes sense. At a certain point, as marketers, we couldn’t do that. We’re starting to see a lot of these software opportunities, but a lot of these are still very new to us because we’re not software guys, per se.

Dan: We’re the guys that the Airtable people are like, oh, they’re an interesting user.

Rob: You guys are software guys now. You have a CTO who’s writing custom code and I believe you have at least one more developer. You’re running a software company here real soon.

Dan: Yeah. One of the things that I thought of before this conversation is that we and a lot of listeners of this show aren’t in a position to not have premium developers working for you. The market is a bloodbath right now for technology people, it’s competitive, but you got to find some way to step up and get quality people in because we really missed out on a lot of quality development this year by pitter-pattering around with some junior folks.

Another big argument for TinySeed funding is to just be able to enter the market with confidence and not to lose 6 or 12 critical months. 

Ian and I are going back to the marketplace on Monday to hire our third developer, and we’re not screwing around. I don’t sit in Golang every day or I don’t understand what Tailwind is, the nuts and bolts, so I want to hedge my bets because I want to be a responsible entrepreneur. 

I think one of the lessons I learned this year is there are places where it’s worth cutting corners, and your development resources in a startup aren’t really one of them. I know that sounds obvious, but it’s harder to say I’m going to write this check and then you’re on the line to go and create the revenue that will support it responsibly.

Ian: I’ll give you an example of how we really screwed that up in the last year. Dan had a great idea which is essentially a services marketplace. If you look at remote work and the future of work in general, there’s a lot of services overlap, meaning, essentially, employees will be replaced by services at some point because there’s a lot of efficiency in that. We’re already starting to see this happen. We have clients come to us and they’re like, hey, I’m thinking about hiring a senior marketer. I’m thinking about hiring this firm. That’s a decision that people are making these days. We’ve seen and done this in our own businesses. 

We launched the services marketplace on the side of DJ because it’s like, hey, I’m trying to solve a problem here. Maybe we need a person, a service, a consultant, or a freelancer, but it’s all the same thing. It essentially didn’t work big time, but when you look at the amount of development resources that went into that project, it was easily six months. 

It’s something that we just wiped off our screen the other day. The buttons are completely gone. Sad to say, it wasn’t a good idea, but certainly, the timing wasn’t good, we didn’t have enough resources to market it properly, and people don’t really understand it. There are a lot of reasons why it didn’t work in the context of DJ, but in terms of our resources, it put us behind in making that decision. 

That’s going to happen to us a couple of other times, but trying to figure out how to properly deploy our factories so they’re making the right things that are pushing us forward is really difficult. It’s also really powerful. 

Dan and I can sit here as non-technical people and order the team around to be like, hey, wouldn’t it be cool if we had a services marketplace? Everybody’s like, yeah, it would be great. It’s like, well, now we’re back 12 months.

Dan: Good idea, boss, who doesn’t know anything about this.

Rob: It’s tough to know what’s going to work. I think it’s Tim Cook, CEO of Apple, who says, there will always be many more good ideas than we can possibly implement and we just have to figure out which one or two we focus on. That’s the trick of all businesses probably but software especially because if you don’t focus, then you do that. You wind up building entire features that no one uses and you lose months of time. It’s especially challenging when you’re writing code.

Dan: And you got to babysit those features once you build them. They don’t just hang out. You got to constantly be improving and fixing bugs. We’ve been really focused on this concept of pushing deeper. Why doesn’t everybody just have this […] grin the entire time they’re using our job board? 

These are the sorts of concepts that we’re focusing on right now to find opportunities in the details as opposed to I think Jordan Gall calls it CEO bombing. You just come into a meeting and you’re like, hey, I had a dream last night, everybody. Job board is the future of work. It’s like, how about the future that a button doesn’t work on the other browser? Let’s talk about that.

Rob: Yeah, totally hear you. You guys have a couple of frameworks that I think are really interesting. One is the thousand-day principle. Dan, do you want to define that briefly? My question is, where is Dynamite Jobs on that journey? Where are the two of you on that journey with Dynamite Jobs?

Dan: The thousand-day principle, I first heard of it from a mentor of mine named David McKeegan who runs a wonderful business, which is also a for-the-rest-of-us business. It’s tax consulting for digital nomads.

Rob: Greenback Tax Services?

Dan: Yeah. This was in 2012. I was in my 20s. I was like, why isn’t everybody here? We were hanging out at some villa in Bali and I’m like, they read the blog post. Why aren’t more people joining this entrepreneurial revolution? It seems like this amazing opportunity.

He said, I think the thing that people aren’t willing to traverse or understand is that they’ll have to make less than they would make at their professional careers for three years or about 1000 days. I think most people can’t get through the 1000 days, and that’s why they won’t join.

I just thought it was clever, interesting, and sticky, so I started just asking what normally happens in the first year? What normally happens in the second year? In the third year, you have this feeling where you’re like, now I can hire people to run the business for me and I make as much as I made previously in my professional career. 

I’ve just seen this pattern happen time and time again since that time that cultural context has changed, but the basic process of suffering for three years in order to get your vision out into the world is a decent rule of thumb or at least a decent way to set expectations for what the journey might look like.

Rob: Yeah. That’s a line I often say, think in terms of years, not months, especially if you’re bootstrapping because people read TechCrunch. It’s like, it raised millions and they have millions of users. It’s like, it just doesn’t happen that way.

Dan: For me, this idea of emotionally plowing through plateaus is really frustrating. When we came back to Dynamite Jobs, I had a little bit of rose-colored glasses because we had already had a “successful business,” and then feeling that pain again of, okay, we’re back here. It’s the 14th Wednesday in a row that our revenue is the same, we made a bunch of mistakes, and it just feels like there are all these problems. 

That’s a lot of what growing a business is. It’s not always positive feedback every day. You’re hanging out at plateaus until you break through to the next level. It’s been interesting to have to eat some humble pie, come back, and go through the process again. We’re not immune to these struggles, challenges, and doubts of sustaining yourself for months and years at a time when things aren’t always up and to the right.

Rob: You guys have built so many assets that you can lean on. You’ve built the audience, you’ve built the community, and you built a stream of revenue to be able to basically fund yourself. As long as you’re motivated and interested, you have an infinite runway effectively. That’s something that you’ve earned through 13 years of podcasting and community building.

Ian: That’s the other thing about the thousand-day principle, not only have you replaced your income from a job at the end of those three years hopefully, but now you have an asset. 

We’re just starting to be at the point where we’ve reached our 1000 days with Dynamite Jobs. The first year or two though, Dan and I were just throwing a bunch of cash at it. We weren’t paying much attention to it, meaning, we were doing the CEO bomb. We have all these good ideas and we had some cash to deploy, but we didn’t really have our finger on the pulse. It’s been about 1 ½ years of our full-time concentrated effort on this.

Rob: In 2019, Dan, you mentioned that you think you had about $5000 in revenue and you’ve been public about this, but in 2021, you had $500,000 in revenue, and in 2020, some number in between that. Do you remember what it was?

Dan: I think it was something between $50,000 and $80,000.

Rob: That’s a huge jump. That’s almost 10X from 2020 to 2021. What do you ascribe that to? 

Ian: There are a couple of things. Number one is Dan and I started putting our full-time effort into it. I think that there was a big change when that started to happen.

Dan: Let me just underline what that is because a lot of it is emotional bravery. Like you said, Rob, we didn’t need to do this. We were trying to get real with ourselves about what we want our careers to look like over the next five years, what goals we want to take on, and why we are going to sit in front of our desks and go through the pain of having difficult client interactions and of looking at competitors who are outperforming us. 

There are all these emotional difficulties of doing this work. For Ian and I, we had to have a rock-solid communal goal of why we were going to do it. That’s how I’m interpreting that point of getting our fingers on the pulse. It’s a lot easier just to put something on the Internet, have some Wi-Fi money coming your way, and just ride your bike or something.

Ian: Another way to say it is we had to engineer our backs being up against the wall, which is a unique position to be in. When we first started our business way back in 2007 or 2008, our backs were literally up against the wall. We had no choice. This time, it’s like we had to throw ourselves to the wolves when we weren’t necessarily in a position where we had to do that, per se, but we wanted to do it.

Dan: One of the critical next steps was stepping up, genuinely hiring people, and recruiting people who were better than us. For example, our CTO, we had this friendship happening over the years. We watched each other’s projects and supported each other. We were Internet friends, but I wasn’t confident enough to say you should change your life to come work with us. That was a problem because I didn’t have a vision. 

Ian and I weren’t on the same page. We didn’t decide what that was. The moment we decided that, hey, we’re going to go for this, and here’s how we’re going to go for it, we were able to recruit a CTO. We were clear about the vision. We were able to recruit a senior recruiter, both of whom have skill sets that are far beyond Ian and myself. That was a watershed moment. Now, all of a sudden, we can sell $6000 products. I can’t evaluate candidates to a $6000 level. Our senior recruiter has been doing it for 15 years.

Rob: It sounds like you committed to the business at a certain point in 2020 where you’re like, oh, this is what we’re going to do and went all-in. I know you still have all this other stuff going on, but you went all-in on it and that gave you the confidence to bring on people at that level. Is that right?

Ian: Yeah. I’d say it was the confidence of going all-in, but then once we started hiring professionals—and I don’t think we’ll ever go back from this now—and people that are truly better than you, it really changes the scope of what’s possible. 

Even in our product manufacturing business that we sold in 2015, everybody was pretty good at what they did, but no one came into that business on fire and the best in the business kind of thing. I feel like we’re starting to cultivate that over at Dynamite Jobs. It’s certainly inspiring for me to come to work every day and watch people perform on a stage that they’re professionals at.

Certainly, it’s expensive. That’s one thing to notice. If you’re going to build that kind of organization, it’s not cheap, but the things that we’re going to be able to achieve with these A-players are going to be pretty cool.

Rob: What’s interesting once you get on this side of it—because I’m there as well and I’m going to give a couple of examples of how I made the same mistakes of hiring junior people and really wasting time and/or energy—you’re like, my early hires are all going to be senior people. They’re all going to be better than I am at their particular job. Suddenly, the case for raising funding makes a lot more sense. 

I know when I was bootstrapping and I hear people say, I’m bootstrapped and that’s all I do, that’s great, but you don’t have money to hire senior people. 

In the early days of Drip, obviously, Derrick Reimer, you guys have seen him do Drip and then SavvyCal. When I met him, he was 23 years old, but he had the chops of a super senior person. But everyone else we hired were these people out of code school and out of three-month code academies because I didn’t have the money to hire them. It worked out, but it took us way longer and there was a lot more headache to get there. 

The moment that we got acquired and had all this venture funding to spend, it was game-changing for us. That was another moment where I said, I’m not going back, much like you guys have decided. You’ve seen the other side of it.

Now, we hired Tracy to run TinySeed America. She’s a type-A who keeps these trains running on time. She’s a way better integrator than Einar or I. 

Xander runs events better than I ever could. We used to run them and they were successful, and then Xander started helping us in 2014. I was like, wait a minute, this guy is really good. This is a hard-learned lesson because I’m cheap. I think we’re all cheap.

Ian: I don’t think you’re necessarily cheap, but part of the bootstrappers’ curse is being resourceful and clever. You get in this clever pattern and then you don’t realize what you’re missing out on because we’re all super clever to get our businesses to this point. Then now it’s like, well, am I going to keep being clever and maybe cheap, or am I going to actually go for it?

Dan: I’ll be transparent. Earlier in the year, we did this clever thing, which I think was a mistake, where we hired multiple developers that were junior and basically pitted them against each other. We were transparent about that element, but the thing about those salary levels, Rob, is you’re already at 60%–70% of what the premier would cost. 

We ended up spending more money and wasting more time in the long run than if we just went out and got somebody senior. I’m really passionate about these pivotal lever moments. As an entrepreneur, it’s like, okay, you were clever about cutting costs. What about being clever about your business model? Why can’t you pay top-of-industry? Maybe there’s some thinking to be done on the upside and the margin side. 

That’s something that Ian and I have really been exploring intellectually over the past few months as we really focus on this new developer we want to hire. We want someone this premium that loves autonomy, sits on top of our candidate side of the marketplace, and just digs into these problems on a daily basis. That’s different than saying, here’s how much we think we can afford. It’s scary, too, because now we have to go out and find a way to pay for it. 

I agree that we talk a lot about control. If you raise a little bit of money, now, all of a sudden, you’re not 100% in control, but that also means that your business can morph outside of your immediate skillset and ability to come to work every day. I’m all in favor of opening up the floodgates a little bit and getting better people involved earlier. It’s almost like a self-respect thing, too. If your time’s worth it, you should be dealing with your peers and people that you look up to.

Rob: The two of you run a job board and a recruiting agency. When you go to recruit, you’re going to hire a developer starting tomorrow or next week. What is it that you have learned that you do differently than someone who doesn’t know what they’re doing? How do you find great people? What is your pull into that from your learnings?

Ian: We’ve learned a lot. Hopefully, we’re good at what we do when we go to hire a developer, and I think we are. 

There are a couple of things that are going on right now. One thing that’s going on right now is a candidate’s paradise essentially. All these candidates have multiple offers on the table at any given time which is a unique point in history. It’s not generally the case, but right now it is. All these companies are going remote. The companies that have been remote are frustrated, I think.

Rob: That used to be our advantage, right?

Ian: Yeah, exactly. Now, you look at Latin America, Asia, and all these different places. They’re coming up as well because now, everything’s flattening and there’s becoming a lot more transparency around the marketplace, salaries, and whatnot. It’s like, hey, I’m a developer in Latin America. Shouldn’t I make just as much as a developer in the United States? I have the same skill set. Here’s my portfolio.

The costs are going up for everybody. Those are some of the unique things that are happening in the landscape today.

Another thing that is happening that we should point out is you can’t just post a job in most cases on any given job board and find your candidate. Essentially, what we do over at Dynamite Jobs is we post at Dynamite Jobs, and then we post in a lot of other places on the Internet where we think that these people are hanging out because it’s very fragmented. It’s good. 

Not everybody back in the day go into monster.com and find their perfect candidate in five days. It’s hard. You got to dig around and find these people, especially these candidates that are A-players. They’re not necessarily hanging out on job boards. 

What does that mean? Maybe that means a cold approach. Maybe that means finding them in these weird places, seeking them out, and then trying to figure out what their motivations are. This is where an A-player recruiter comes in to have conversations with candidates in terms of their motivations, like what’s going on at your job right now, are you happy with your income, what moves are you trying to make, and try to suss out basically where these candidates are and where they want to be. 

There’s actually a thread on Hacker News the other day about why you should always talk to a recruiter. There are a lot of reasons why you should. They can be your advocate as a candidate, they can help you make moves, and they can let you know what’s going on in the marketplace in terms of salaries. They work both sides of the aisle which is, in a lot of ways, good.

Dan: But most recruiters suck which is why that article went to the top of Hacker News. The way I’m thinking about this is because the world’s completely fragmented now, you need to tell a founder-level story to candidates. With geographic constriction or before the pandemic, you could be like, we are this kind of agency. We pay this much. We’re in this city. This is a job, apply. 

There’s a lot of implicit narrative there that candidates can buy into. Probably the lowest cost, highest leverage action for founders is telling that founder-level story in your job post and to the candidates. Candidates can know right away if they’re an A-player and they’re talking to a B-level recruiter that doesn’t understand their situation. That’s a huge turnoff. That’s basically what we’re trying to emulate. 

We talked to Greg on the phone. He understands our client stories at the founder level. He understands why they started the business, what kind of opportunity it is, and what direction it’s going. He can communicate that up here to A-players. 

Most recruiters are just playing the numbers game essentially. That narrative of what you’re doing as a business is in our DNA. That’s how we’ve always hired, we’ve told the story of what our business is doing. I think it’s expensive to do and is why 90% of our job posts don’t have a compelling company narrative.

Rob: Yeah. There’s advice that I always give to founders, and it’s that you’re not a big company. Don’t write a job description that acts like a big company. Don’t go read the Target, Best Buy, and General Mills job descriptions because they don’t have the same things to offer. What they have is their salaries are probably higher and they have more benefits, but we used to call it combat pay because you have to put up with all the […] at those companies. You’re kind of in combat, so you make more, but you hate your job versus if you’re a 5-person company or a 10-person company, what do you actually have to offer? What is your advantage? How can you use that against a larger company?

Usually, the way I’ve done it is to almost think of the job description a little bit like the sales letter, not go over-the-top Dan Kennedy style but to be unique.

Dan: You’d be better off to do Dan Kennedy style honestly. Be careful who you copy because there’s this big implicit story in a job post for Best Buy. You don’t need to write it. Everybody sees a Best Buy job post and they can tell their own story. 

I look at our site and I see these brands that I’ve never heard of before. There are 15 employees and it’s a genuine life-changing opportunity, but the founder’s not taking the time to describe that. I understand why. It takes a lot of energy, but I feel like that’s the number one piece of advice right there.

Rob: Last question for you guys today as we wrap up. Another framework that you’ve called out a lot is Rip, Pivot, and Jam. It’s where you see an idea, you rip it which just means you take it, you pivot so you change it, and then you jam on it. You basically execute on it. 

Whether it’s the job board side or the recruiting side, did you actively rip, pivot, and jam because I can see some ripping, pivoting, and jamming happening? It’s like you had the traditional recruiter model and you took it, tweaked it to make it flat-fee (it’s less expensive), and you focused on startups and digital nomads type of folks. People are building businesses but not big companies. I can see it on the job board side as well. What’s your take on that?

Dan: The fundamental idea of Rip, Pivot, Jam was how can you not be so intellectually challenged to get started in business? It sounds very intimidating to me to come up with a business idea and you realize that you’re surrounded by 10,000 business ideas every day. 

In other words, you could say, well, scratch your own itch, find a problem, or whatever, but how about just look at the business? That business is working. Go and talk to the people who run it and make sure it works. This recruiting business is a $1 billion industry and it works. 

The pivot part is why don’t people do that for this or this for that? That’s just the basic pivot. There are a bunch of different ways you can formulate a pivot. In our case, it was simply like, this service is valuable, it’s profitable, and it has a track record in the world, but there’s none of it for our people, and our people need it too. That was simply it. 

Then, the jam part is the thousand days. It’s not going to work on month number one. We had some momentum early but then you got to hire people. You got to backflow that revenue stream. You got to hire a boat line and you got to keep plowing to those plateaus. That’s the jam portion.

Ian: When I look back at our business success and failures, most of our failures were what we thought were the best ideas. It’s like, here’s a brand-new idea that’s never existed before. Let’s put this into the marketplace. Thud, it doesn’t work. 

The ones that do work are like, hey, this has been around forever. Why don’t we just change this a little bit? 

Rob, there’s a lot of that going on in DJ. These things have existed. Job boards have existed forever. Recruiting has existed forever. Now, it’s like, how are we going to pivot this? How are we going to make it 5% better this year or this month, repackage it, and present it?

Dan: Yeah. There are a bunch of different methodologies that come across in Startups For The Rest of Us where you can find that pivot. 

We’re certainly not fans of copying anybody’s work. Originality is important, but you don’t need to be original about the conception of how to make money online. That’s been proven out. 

The question for founders to determine is what’s the thing that you can do differently that other people aren’t willing to or technically able to do? In our case, we were willing to cash flow essentially a recruiting service for the price of a job board. There’s no job board in the world who’s dumb enough to do that, but we were like, we’ll do it for two years because we can afford to and we were in a unique position to have a perspective on these cool jobs that our members had that no other job boards had access to. 

We were able to build these relationships. That was our pivot. It’s like, okay, there are job boards, but there’s nobody willing to do this. If you come to Dynamite Jobs, a person talks to you about your role and figures out what’s best for you. That’s a necessity because other job boards are established and they sell based on trust. We had to earn that trust in a different way. That was our perspective in pivot, and it got us to where we are now. Hopefully, we keep going.

Rob: You almost 10X last year and I hope to see a 10X this year. If folks want to keep up with you guys, you are @anythingian on Twitter, @tropicalmba as well on Twitter, and of course, Dynamite Jobs if folks want to check out what you’re working on. Thank you so much for coming by, guys.

Dan: We appreciate it, Rob.

Ian: Thanks for having us.

Rob: Thanks to Dan and Ian for showing up. I could talk for hours and actually, I do talk for hours with those guys whenever we get together. Last time I was in Austin for MicroConf Local in September, I had dinner with them and had such a great time with awesome conversation. I hope to have them back on the show again soon. 

Thank you for listening every week. If you haven’t subscribed, do that. If we’re not connected on Twitter, look me up @robwalling. I look forward to being back in your ears again next Tuesday morning.

Rob: Welcome back. It’s Startups for the Rest of Us. This is Episode 592 where we’re going to dive into nine tactics for amazing customer support. If you recall, this is an experimental format where Cody Duval, the founder/acquirer of Keeping, which is a help desk tool, came on the show last week. We dug into his story of coming to MicroConf in 2019 and later acquiring Keeping through FE International. He’s been running that ever since.

I’m bringing him on the show today purely for the tactics, the tips, the tricks, the do’s and don’ts of amazing customer support. Without further ado, let’s dive into my conversation with Cody Duval.

Cody, I think you are the first guest on Startups for the Rest of Us to have ever made his first and second appearance seven days apart.

Cody: All right, excited.

Rob: Congratulations.

Cody: Thank you, Rob.

Rob: This is great. As people just heard in the intro, this is an experimental format. I realized that a lot of the founders that I interview have this subject matter expertise that you gain through the osmosis of running or building an app in a space.

I remember when I was running HitTail, which was an SEO keyword tool, early on, I acquired it, revamped it, and started marketing it. People started asking me, well, how do I do SEO? And what should I do with this? I was just like, it’s a tool, go use it. I don’t know, whatever. I know how to do SEO, but I’m not your coach.

I started realizing, oh, so much of the value is the knowledge that’s in our heads of whether it’s SEO, running an ESP and knowing best practices for email, running a support tool like Keeping and having a lot more knowledge and a lot more exposure to a lot of, I’d say, probably successful customer support experiences. You’ve probably seen some that aren’t great. That’s why we’re here.

Cody: Yup, that’s exactly right. I’m an operator of a tool that empowers teams to provide customer support to their customers, but I’m by no means a professional. I’d love to, as we have this conversation, have folks disagree, I’m @codee on Twitter to shout back because all the things we’re going to talk about here are things that I’ve just absorbed from talking to my own customers, having conversations with professionals. I think this will be fun.

Rob: I want to kick it off before we dive into these. It’s called nine tips for customer support or something like that. That’ll be the title of the episode. Maybe we wind up with 8 or 10. We kind of wander, but the interesting thing we were just talking about is the term customer success versus customer support.

I want to walk back and talk about my understanding of these definitions. Customer success was not even a term seven years ago. I think the first time I ever heard it was probably 2013, 2014. Customer support has been around forever because we know that you would call United. You called Pan American Airways and you’ll get customer support.

Startups have traditionally done it via email, sometimes chat widget. Customer success became this way a lot around onboarding and a lot around helping high value clients get value out of a product and retain those folks to cut churn. That became this new role with the subscription businesses.

You didn’t really need customer success if you made a one-time sale. They had implementation engineers and all that, but there was a relationship manager and AE or whatever. But really, SaaS, I think, brought about this need for customer success because we know that churn is the death knell. It’s the kryptonite of SaaS and customer success.

I think their overarching umbrella is to help people get onboarded, not churn, and stick around, but you and I were talking offline just before this that this definition may be changing or adjusting. Do you want to talk through how you see success versus support?

Cody: Yeah. I do think that this is a term or a job title that, like you said, has been birthed in the past couple of years. The way I see it, at least with my own customers, is that customer success envelops the full lifecycle from when someone comes on board as a customer to when they might churn on the other end. We might talk about customer support once they’re already a happy customer and they’re needing advice and/or a problem solved. I think in the industry, customer success now covers the whole lifecycle.

Even up another level, you have the customer experience or CX. There are conferences where these folks go. I think if you’re working in the industry, you probably call yourself a customer success professional, but you may be doing customer support as well. We’re going to talk about customer support stuff here, but this maybe is under the umbrella of customer success.

Rob: Yeah, and that’s the difference. When I left Drip, there were about 110, 120 employees and there was a 6-person customer success team. They very much were high value clients. We get them on board and keep them around, thinking about making onboarding better—all the stuff we could think of under customer success. Then there was a 12- or 14-person customer support team and they were very separate.

Someone talked about merging those two and I was like, there’s an overarching theme, but the skill sets of those two roles are actually quite different. If they move customer success up to this umbrella term over both of those, I think we need a new term for what those customer success people were doing at Drip. Whether it’s an account manager or relationship manager, there should be something that has to replace that so it’s not ambiguous. Does that make sense?

Cody: Yeah, I think those are AEs or account executives. They’re managing the customer at a strategic level, not just dealing with tickets.

Rob: Right, not reactive but proactive. All right, let’s dive into this first tip. If you pay attention to only one metric, make it response time.

Cody: Right. If you adopt a tool, there’s going to be a ton of metrics that you can look at, there are dashboards that are all dedicated to customer support. What we hear from our customers and what I’ve noticed is that the thing that matters the most to their own customers is response time, in particular, first response time. That specifically is how long does it take to get a reply from a real human, not an auto reply. The auto reply does not count.

Just to say, hey, we acknowledge that you have an issue or you have a question and that we’re on it or even you provide a solution. There are, I think, various metrics as to what is a good response time or a good first response time. We can talk about that too.

Actually, just before we started recording, I recently emailed a very well-known SaaS tool and I got an auto reply that said, our typical response time is three days. I just immediately was like, oh, are you kidding me? I get it, but a customer doesn’t care or know that you have thousands of folks emailing you. You are a special, and at Snowflake you are one and you want to reply. Generally, we can talk about what’s a good response time, but I think that this is the most important metric to pay attention to.

Rob: Yeah, what is a good response time?

Cody: I think that for teams that we’re talking about here, generally, around 12 hours or less is what you should aim for, which really means like a business day. I think that there are definitely tools and areas where maybe more than that would be acceptable. What I see from most of my own customers is that going anything longer than a day, customers start to feel ignored and they feel sad. That should be a nice rule of thumb to pay attention to is to try to get back to everybody within one day.

Rob: The second topic is this difference of interacting with a human, like, hey, this is just an email between two people. As cold as email might be, email always feels like I’m texting with a little bit of delay and I’m having a human interaction versus some systems like Zendesk is the one that comes to mind because, again, I hate to keep talking about merging with Leadpages and that whole thing. That’s why I have experience with a bunch of different systems because I’ve been on both sides of this.

We were on Help Scout. I liked it because it felt like a person-to-person interaction. It wasn’t a bunch of cruft around the email or it wasn’t this survey at the end. It wasn’t all this stuff. Then we moved to Zendesk because that’s what they were using and I hated it as an experience. Do you have thoughts knowing the space better than most about which is preferred by customers?

Cody: Yeah. This is near and dear to my heart because at Keeping, it’s one of the things that we like to say. What makes Keeping different is that you really should feel, as a customer, that you’re dealing with a human. I have to give Help Scout some props here because if you look in their marketing docs or even in their own support docs, they don’t like to use the word ticket. They call it a conversation.

This goes to what you’re saying, which is, when you start labeling, hey, here’s your ticket, it becomes anonymous. You’re this work product being pushed around a system. If you’re at a high value SaaS, again, you want to be talking to a real person that knows what they’re doing.

I really encourage folks to look at tools that don’t say, here’s your ticket number, click on this link to check your status, please reply to this, go to this portal. I think that today, in 2022, even though it’s an email, people want to know there’s another human on the other end of that email and not just a robot.

Rob: How do you feel about these surveys that go out after where it’s like, rate us one to five? How did Josh help you out? I have my own thoughts on it and I get it. I get that when I have a team of 5 or 500 customer support people, the way I’m going to evaluate them is based on response time and customer satisfaction.

If I’m not sending those surveys, I don’t have that second piece of data. I get it from a business perspective. From a user perspective, it pisses me off. I hate it, and I’m curious. You’re on both sides of it, what are your thoughts?

Cody: You can start to see customer service tools are really segmented. We’re going to pick on Zendesk here. They are geared towards teams with hundreds, maybe thousands of folks on the other end who are replying to customer support requests. There’s a manager and a manager’s manager. They need data to know, oh, wait a minute, are we doing a good job? Unfortunately, you, as the customer, are being bullied into providing that data.

I think more often than not, the data isn’t very helpful if you’re at a small scale like most of us are. Number two, I think customers kind of resent it. I think a lot of times, they’re only going to click the frowny face and probably ignore the medium and the happy face. You’re going to get skewed.

Oftentimes, data folks were like, well, what does that frowny face mean? I took too long to reply? Was the person rude? It’s often not very actionable. Again, if you’re a 5000-person organization, maybe you can get some value out of it. But I think for most of the folks that are listening to this podcast, it’s not very useful.

Rob: Yeah. And I feel like the only times that I respond to it are when someone either is amazing and I want to give them a thumbs up or they’re terrible and I want to give them a thumbs down like they were overtly rude. Other than that, to me, it’s more work for me. My inbox is already clogged with stuff. I don’t want another email that I have to think about and sit there and may not even remember the experience.

A question I know that I get a lot when I’m mentoring and advising founders is, when do I hire my first employee? When do I hire my first developer? When do I hire my first customer support person? What are your thoughts on that?

Cody: Right. This is hard because I think that depending on the type of service that you’re offering really is going to […] the kind of person that you can hire. My own rule of thumb, just very generally without going too far into that, is that if you can’t get back to your customers within a day, so this goes back to that response time we’re talking about, that’s a signal that, wait a minute, maybe you need to hire somebody to be that first line to respond to your customers.

The big assumption here though is that those tickets are fixable by someone that you hire. If you’re early and you have a lot of technical bugs and everything requires a ticket in JIRA or your project management tool, that customer support hire is going to be not very helpful because they’re just going to say, well, yup, it’s broken. That’s it. But if you get a lot of requests that can be tackled resetting passwords or billing questions that can be hired by somebody who’s relatively trainable, I think a lot of founders find this as a huge weight off their shoulders that they’re not staring at that queue and they can focus on their business.

I also like to say that if you’re a technical SaaS that this is a great place to start a junior engineer, somebody who’s learning if your Rails and this is their first job. Opening bug tickets and tracking down bugs is a great place to start. They can bridge into a more senior role from there.

It really depends on your domain and the kind of tickets that you’re getting. But I think for the most part, if you’re feeling overwhelmed and you’re not able to get to your customers back in the day, then think about hiring somebody.

Rob: I think a lot of founders wait too long to hire a customer support rep. Oftentimes, it’s the same reason/excuse where it’s like, well, but I just know so much and as the founder, I can just do better support or our product is too technical, I hear this all the time. You don’t hire someone with no technical experience then. You hire someone who can either figure it out, or as you said, it’s a junior engineer.

I have known multiple founders who told me, oh, it just isn’t that much time. I’m not going to hire someone full time. I don’t know if I can hire someone part time. It’s only 30 to 60 minutes a day. A founder told me that and I was like, are you fucking kidding me that you’re spending up to five hours a week on this? This is the lowest value. Customer support is extremely valuable, but you can find someone for not very much money to do it well, not very much money compared to what your hours as a founder are worth.

Cody: It’s the thing that keeps people up at night. One thing as a solo founder, especially, you’ve got all these things circling you taking a little bit of your founder mana away. I think that not having to worry about that customer support queue, you’re just going to sleep better at night. I agree.

Rob: Yes. And the interruption, you don’t take that into account. The distraction and the interruption are the two biggest things, not the five minutes to respond to it. It’s that it’s off your plate.

Next thing is a chat widget. To chat widget or not is a pretty common question I get. I advised a company that had the chat widget for everybody including their free users and really inexpensive plans. They have plans running from $9 up to thousands a month and they have thousands of people coming in. They were trying to man the chat window or the chat widget and it was a huge amount of effort.

I talked them through, hey, maybe we should not have it available for free plans or maybe we should not have them available for $9 and it’s only 49%. We just talked through maybe only during a trial, blah, blah, blah. There are just ways to hide it. But I also know that chat can be great because it’s real time and people can get fast responses. What’s your thought on that?

Cody: Yeah, it’s just not an easy answer. But I will say that when Intercom came onto the scene, they really I think were the ones that made the chat widget ubiquitous. My chat widget is amazing, especially if it’s manned and there’s somebody there. The one thing I will say is that once you offer a chat widget and you’re responsive on the chat widget, your customers will always go to the chat widget. Not everything needs an instant reply, but it’s very, very satisfying as a customer to not have to wait.

In talking to a lot of folks about what you just said, at some point, your business is going to be just too big to support a chat widget. I think if you’re less than 200 customers, that’s just a ballpark number, consider a chat widget. I think that it’s something that can give you really good feedback. It’s really, really useful when customers get stuck in their onboarding process and they just need a little bit of this or a little bit of that.

I think it’s worth it in those cases. But after 200 customers, I think it may be a feature that’s only offered on the higher plans. Premium support actually means something a lot of folks have on their higher plans and it doesn’t mean anything, but I think chat support is something that people will pay for.

The last thing is, you have to make sure that there’s someone there. I think that an empty chat widget is often worse than no chat widget. A lot of the chat like Intercom comes with bots that fake type, which is a little bit of a pet peeve of mine. We see a bot typing when we know a bot doesn’t type.

Those can be useful. I think chat widgets can get people to their answer like, hey, here’s a support article that you asked for. But if folks really want to talk to a human and they can’t get to a human in a chat widget, I think you’re, at this point, just have them email and then you’re going to meet their expectations. Chat is a tricky one. I think that just be careful because once it’s there, it becomes something that’s really hard to take away.

Rob: Cody, you have a note here in the outline. This is tip number five, by the way. It’s about how early in the pre-product market fit that customer success, sales, and product are almost the same role. I want you to dig into that in just a second.

I remember, I talked about hiring customer support out and how I always did with all my apps, but I didn’t do it at the start. When I acquired HitTail, I personally responded to every email ticket that came in for three months, it might have been a little more.

Drip was the same way. Three to six months, I did it until it started (a) I started hearing the same things over and over, (b) our product roadmap was set, and (c) it became enough of an interruption and a distraction and it made sense. But I found those early days extremely valuable for me as a founder to be doing it. Why don’t you tell us what you’re thinking about this one?

Cody: Early on, this really is about when you’re still trying to find the right product for the right customer. Your support channel is really just another way to talk to your customers. If your customers are taking the time to write you an email or get on your chat widget, they’ve just opened the door to being able to have a conversation about, hey, something’s not quite right, this product doesn’t quite meet my needs. But they clearly like you enough to take time out of their day to write you an email.

I think as far as product development goes, it doesn’t have to be like an outbound email. Hey, will you talk to me about this product that I’m offering? Someone’s already raised their hand and said they’re ready to have a conversation with you, even though it’s in a customer support ticket, and that can be turned into sales.

As soon as somebody has said, hey, this is great but.. Then you can say, oh, well, let’s do this instead of that. And the next thing you know, you’ve turned somebody that was maybe on the fence. This is during a trial into a customer.

I think in the beginning, it’s really, really critical, even though no one probably loves doing customer support, that as a founder that is your main channel to getting a dialogue with your customers. Getting feedback about the product, you’re seeing how they type about it, how they talk about it, you’re getting all that language, and that’s going to come out in all sorts of ways as you build your product.

Rob: Tip number six is training your customer success team or yourself to ask every customer a question. What’s that question?

Cody: This is just a very quick tip. Attribution is just a mess right now in marketing. If you have a lot of inbound sales, where do they come from? You have this opportunity to just say, hey, how did you find us? And they will almost always say, Google, but they may also say, oh, I saw you on a buddy at a bar and said, hey, you should check out this tool.

It’s just an opportunity to get a little bit of insight into your marketing, especially if you don’t know where they came from. Obviously, if you reached out, if this was an outbound lead that you pulled in, you don’t need to ask them. But if you have a customer that came to you and you don’t know where they came from, just ask them.

Rob: Another question that I get pretty frequently is, how should I deal with abusive customers that are pretty far out of line? What’s your tip for that?

Cody: This is really hard. I think there’s a line between rude and abusive. I think a lot of folks, especially in an impersonal medium like email, can come off a little rude. I think that’s okay. I think we need to be able to deal with rude customers. That just comes with the territory. They may not be nice, but they are your customer.

I think when something drips into abuse, and I think it’s important as your company that you have already decided what is abusive with your team. Especially if you have employees and you need to train your team to very, very quickly just push that ticket if you’re dealing with a support ticket system to you, the founder, and let you deal with it so that your employee isn’t in the firing line of somebody who’s really stepped over the line.

After that, it’s up to you as a founder how to deal with it. You can fire them as a customer. I certainly have done that. I think I’ve talked to other founders who said, you know what, we just don’t need or want your business.

Obviously, that comes with some risk, especially in the world of social media, product review sites, and all the things that come with it. A customer support tool or a customer support platform gives you, as a founder, visibility into what’s going on. I think it’s something that just happens and it comes with the territory.

Rob: I had to fire a few customers for sure over stuff like this. My phrase was always, it sounds like we aren’t a fit for your needs. I would apologize. I’m sorry that we’ve disappointed you. It sounds like we’re not a fit for your needs. We need to part ways.

Sometimes the person then just went ballistic. Other times, they apologize and start begging for me to let them stay. This wasn’t one email that was rude, like you said. This was way over the top stuff—threats and this kind of stuff. It’s like, no, you’ve shown me your true colors. There’s just no way that, unfortunately, I can let you stick around.

Cody: Yeah. Again, this is after you reach a certain point. It’s worth spending some time. We actually have a blog post on our site about typing up a policy about what we consider abusive.

You can just outline things ahead of time that you can share with your team, anyone that’s on the front line, that they know they tripped over into a new character. Then it goes up to you as the founder or if you’re big enough into their boss and then you can handle it, so someone’s not stuck there in that really bad space.

Rob: Got it. We’ll link that blog post up in the show notes. It’s on the keeping.com blog.

Cody: That’s right, yup.

Rob: All right, we have two more here. This one seems obvious to me but maybe it won’t be to some people. It’s about deciding when to pay for a customer support tool. I know some people in the early days tried to do it directly in Gmail with labels. I think that not having tooling around that, whether you do go for a full-blown Help Scout or whatever or using something like Keeping that makes that possible within your Gmail. What’s your thought process around that?

Cody: I think some folks don’t know or, hey, what do I get with the customer service tool? What does it bring? I actually think that if you’re really small, if you’re still in the product development stage, these tools are expensive, so it’s okay to wait. You can get really far with just an email support@mycompany.com. Especially if you’re a solo founder, you’re not assigning tickets to anybody, you’re just dealing with them. 

On the high end, some of these full-service customer support platforms are $30 or $40 a month per user. That’s not a lot if you’re a big, well-funded SaaS, but if you’re bootstrapping, that’s a pretty big expense.

The killer features that may make you want to pay for a tool are (some call these) canned answers, shared templates, response templates. You’re going to find that you get the same questions over and over again. Not having to type the same email over and over again is a huge time saver if you can take the time. Basically, cut and paste that question and answer into a system that lets you one-click, insert. You can even customize it, of course, to make it feel like it’s being typed. That’s just a huge time saver.

All these tools give you basic analytics like we talked about with response time. The more expensive tools go really crazy here. I don’t think you need every metric under the sun. But being able to calculate something like response time with a little dashboard, I think, is really important after a certain size.

I think most of these tools allow you to communicate on the side about a support ticket, call it a note instead of forwarding an email around, is a huge thing you don’t know you need until you need it. A customer emails in and says, I have this question. So having able to have a chat about that ticket inside of your tool is really great.

One thing that is different for each domain is, we’re living in this omnichannel world and some folks get customer service requests only through email, then you should choose a tool that’s optimized for that. If you’re in the more prosumer consumer side of the equation, you’re going to get a lot of your customer support requests on Twitter and Facebook. And so you need a tool that can plug into those platforms.

In fact, I think for a lot of consumers today, that’s their primary channel. They’ve realized that the visibility of complaining on Twitter or Facebook gets a faster response. You got to have a tool that plugs in there.

Rob: Aside from spammers and IP blacklists, that right there, going to social media because my thing is so urgent and you should just pay attention to it. Those were the top three things that I hated about running Drip.

Actually, I […] despise them like it ground on me. Because then it was always like, cool, well… oh, I already have. And it’s like, oh, yeah, I see you’re third in the queue, we’ll get back to you. Our response times were very fast. It was especially in the days when I owned it. It was a few hours tops for an initial response.

It just always felt so entitled. It was never from the awesome customers who were singing our praises and who legitimately had an urgent issue. It was always the demandy customers paying us the least and who complained the most. It just inevitably was that.

Cody: Yup.

Rob: All right, last one, our ninth tip. This is around tooling and software. You have some specific thoughts for folks about deciding maybe which type of tool to look at.

Cody: Yeah. What toy to pick? This is a hugely crowded space. If you were to go into Google right now and search for a help desk or customer service tool, you would get page upon page upon page of options.

Obviously, I’m going to plug Keeping if you’re primarily dealing with customer support through email and you need a tool that does everything we just talked about. Perhaps, you don’t have a 10- or 15-person customer service team, Keeping may be a great fit for you.

My own advice is that buy the tool that’s the right stage for your company. Help Scout is a great tool, but maybe not if you have 10 customers. The segments are now big enough that really, these tools are oriented towards specific use cases.

There’s a tool called Gorgeous, which is all about ecommerce. I think it’s worth spending a little bit of time and investigating which tool is really oriented towards your industry. My churn is very low. I’d like to think that’s because we have a great product, but it’s also because there’s a real investment that you make with these tools by pouring in your knowledge base, all your customer support data gets in there.

Once you choose a tool, you’re going to be on it probably for a while. Just take some time to choose the tool that’s right for you. Don’t just grab the first one. Know that most of these bigger customer support tools are built for customer support teams. If that’s where you’re going, then choose those tools. 

If you’re a founder with a couple of folks, just be aware that you’re not falling into a really complicated and expensive tool that is way more than you need. I think those are just some things to think about before you put your money up on the table.

Rob: In terms of the knowledge base thing, I was always resistant to putting my knowledge base into a support tool because then it tied me into it. We either looked at third-party knowledge base tools or, at one point, we used WordPress with a theme. There are just other options, but it does seem like that’s the way people are going now. Is that accurate, where the KB is combined with the tool?

Cody: Yeah, the public knowledge base I think is a business idea for anyone out there. I think that it’s a really underserved market. I think if you want to build a knowledge base right now, all of these tools come with a not very good knowledge base, I have to say.

It’s good enough. It’s nice. It’s integrated with your tools so you can easily link to it from a support ticket. But from a customer side, they all just don’t feel very good. This is true with Intercoms, it’s true with Help Scout, it’s true with Zendesk. I think they all just feel like they’re not very well—there’s not a lot of folks paying attention to those products inside those companies. They feel like kind of an add-on. 

I really encourage folks to unbundle if possible. I just don’t think there is a lot of great knowledge base that’s specifically oriented towards SaaS tools right now. A lot of folks just do, like you said, something in WordPress, a Gatsby static site, but it doesn’t feel like there are a lot of great options for knowledge bases right now.

Rob: I think the bummer is, given the fact that there are mediocre free versions—free in essence—attached to these customer support tools, it would make me resistant personally to going into the knowledge base phase because I know that a bunch of the sales objections are going to be, well, I already have a half-assed one in Zendesk, so why would I pay what I want to charge for it? Hopefully, someone out there is gaining traction.

Frankly, if you are getting traction, I’d love to have you on the show and talk through similarly. Do the interview about your product and then do an episode like this where it’s like things to do in your knowledge base, nine tips for founders.

Cody, thanks so much for coming back on the show. You are @codee on Twitter and, of course, keeping.com.

Cody: Thank you, Rob. Great talking.

Rob: Let me know what you think of this new experimental format where I have a founder come on and tell their story, and then the next week come back with tactics, strategies, or thoughts on how to do things better, something they’re a subject matter expert on. You can hit me up questions at startupsfortherestofus.com.

You can click the Ask a Question link at the top of Startups for the Rest of Us or you can head to Twitter. I’m @robwalling and we’re @startupspod. Let me know if you liked it. If you didn’t like it, you want more, or what have you. Thanks so much for listening this week and every week. I’ll be back in your ears again next Tuesday morning.

Rob: If you can believe it, it’s another episode of Startups For the Rest of Us. This is a show where every week we cover topics related to building and growing startups using an ambitious yet sustainable approach. This is where we talk about building real businesses with real customers who pay us real money. We seek freedom, purpose, and relationships.

Thanks so much for joining me again this week. Great conversation with Cody Duval. He is the founder/acquirer of a customer support app called Keeping.

I’m doing something a little different over the next two weeks. It occurred to me that the last time I did a really tactical tip-oriented learning episode, several people tweeted me and actually a couple wrote in saying, you should do more of those. Those are like the early days of Startups For the Rest of Us. Of course, I want to have a mix. I want to have a balance of different episode types. 

What we’re going to do over the next two weeks is today, we’re going to hear Cody’s story of acquiring and growing Keeping in this really crowded space of help desk and customer support tools. Then next week, we’re going to hear from him nine tactics for amazing customer support because obviously, Cody, running an app with a bunch of customers doing customer support, sees the do’s and don’ts. He sees the strategies and tactics that win and those that are pretty big mistakes. 

I’m excited for this format and I think it’s something I’m going to consider doing with additional guests in the future. Because someone running an app that sends a lot of email or that helps people do customer support probably knows a lot more about sending email and doing customer support than most of us do as generalist founders.

But before we dive into today’s show, I wanted to remind you that we launched the TinySeed Syndicate a couple of months ago. The syndicate is, in essence, an investment vehicle that allows us to invest in B2B SaaS companies that may be a little later-stage than the traditional TinySeed accelerator companies.

I think my rule of thumb guidance if you want to apply to get investment from the syndicate is that you should probably be doing $700,000 or $800,000 in ARR. It can be a little lower. It depends on the growth rate and a lot of things, but if you’re interested in raising from TinySeed like MicroConf, Startups For the Rest of Us, and investors, TinySeed Syndicate is something you’ll want to check out. We’ve been running 1–2 deals per month. Folks are raising, at this point, between $500,000–$1 million. They usually have some section of that filled. We get an allocation of a few $100,000, and it’s been going really well. It’s always exciting to be working on something new.

If you’re interested in that, head to tinyseed.com/apply. At the bottom, there’s a form to fill out info about the syndicate. Of course, if you’re an accredited investor and you want to invest in great B2B SaaS companies that would be listening to Startups For the Rest of Us, head to tinyseed.com/syndicate. It’s an easy application process. As long as you’re accredited, it’s all done through AngelList. It only takes a few minutes. 

You get to see the syndicate deals as they come through and you can invest in one and not the next one. You basically get to pick and choose the syndicate deals because each one is an individual investment. The minimum investments are really low, usually between $2000 and $5000 for the most part. If you’re interested, tinyseed.com/syndicate. With that, let’s dive into my conversation with the founder of Keeping, Cody Duval.

Cody Duval, thanks so much for joining me.

Cody: Great to be here, Rob.

Rob: It’s good to have you on. Keeping is your startup. Keeping is a simple customer support tool that integrates with Gmail. You’re a single founder. You’re part of the current TinySeed batch. Do you want to give folks an idea of what stage you’re at? Some founders give MRR. Some founders do, hey, the team size is this big and we’re default alive. Just some ideas so folks have an idea.

Cody: I’m a solo founder. There are three remote engineers that I employed basically full-time. I would say we’re default alive but with the caveat that all of my profit is going into building the business. I could certainly go into solo mode and make a business at Keeping, but right now, we’re very much into investing and growing the business.

Rob: As so many of us are. You started a help desk software three years ago. There are already a lot of them out there. Some of them are good, some are not. What was the thought process there of, I’m going to enter this incredibly competitive market as a solo bootstrap founder?

Cody: It is crazy that there are crowded markets and uncrowded markets. The help desk customer service tool space is huge. You’ve got Zendesk, Help Scout, Freshdesk. The real epiphany for me, at least as to why Keeping exists, is that a small business—perhaps a non-SaaS business—doesn’t need all the horsepower of a Help Scout or a Zendesk. For the most part, those tools are quite expensive and quite complicated. There’s a gap in the market between doing it yourself in Gmail just sharing an inbox, and then those big tools which are really built for customer support teams that are professionals.

If it’s not clear, when we say we integrate with Gmail, we actually prod into Gmail and turn your Gmail inbox into a customer support tool, which is basically just the right size for a lot of teams. If your team grows and you got a 10-person customer support team, then maybe that’s right, maybe you should go and buy Help Scout. But for the rest of the world, there’s a tool that’s the right size and we think that’s Keeping.

Rob: When you and I talked during the TinySeed interview process, I brought up a couple of concerns that I had. One is if you’re going after small teams, it’s not necessarily going to be a lower price point, but certainly a 2-person company is a little more price-sensitive than a 10-person support team. That was one thing. I’m just thinking that churn is going to be worse. The other is when they get to three or four support reps, aren’t people going to migrate off and essentially outgrow Keeping?

Cody: Starting with the second concern. I think most of our customers probably never will have customer support reps. They’re a wholesale business. They’re a B2B business. Customer support is a part of their day, but they’re not going to grow a big customer support team.

As far as being price-sensitive, when you’re at this part of the market, there is a little bit of, okay, what is the right pricing? It’s something we’ve talked about, especially in this space which is all per-seat pricing. You open up a bunch of pricing pages and you’ll see anything from $60 a user to $9 a user. 

For the most part, the tool becomes so integrated into your workflow—this isn’t true just of Keeping but it’s true of the category—that they’re almost immune from churn because you really spent a lot of time setting up, you build it into your day-to-day operations, there’s a knowledge base where you spend a lot of time pouring in your content, and it becomes painful to churn. It’s not like an SEO optimization tool, which is you go in and use it and you’re done. This becomes really a core part of your workflow. 

I think this is true for Help Scout and Zendesk. Once you get a customer on board, they’re pretty loyal. I’ve had customers from day zero that are still trudging along, and our churn continues to be really, really low. We’re really focusing on growth and we think we’ve got a good sense of, all right, this is the right tool for some segment of the market because they’re not churning out, at least not yet.

Rob: As much as on this show, I talk about higher price points and larger teams less likely to switch. The way that that cuts the other way is those folks take a long time to make decisions. There are often many people involved, and it’s decision by committee. Enterprise sales are a reason they take three, four, or five months.

With a tool like Keeping—or I had Christopher Gimmer with Snappa—or any tool that has that lower price point and is either aimed at (I’ll say) solopreneurs, solo founders, or just small teams, there’s one decision-maker with a credit card. If they like the tool, they sign up, and it’s done. It’s not a big, long process. Is Keeping’s sales process purely self-served at this point?

Cody: Totally inbound. Because of our ARPU (average revenue per user) being a little bit lower than some of our competitors like the Help Scouts and the Zendesks, the menu of growth channels available to us is limited. We’re all bidding on the same keywords in Google, but if your average customer is $300 a month versus ours which is way lower than that, we’re both bidding for the same keyword. We’re not going to be able to play. 

SEO content marketing has become our core channel; it goes without saying. But even there, they’ve got fleets of writers and I’ve got a couple, so it’s really trying to optimize that inbound channel. Maybe there’s a day we graduate to a little bit of outbound, but you can do the math there and figure out that it really takes a lot of effort to drag one lead in the door with outbound sales. For now, we’re pretty happy with the inbound model.

Rob: I want to get into the later challenges of being a bootstrapper in such a massive market. But before we do that, let’s take a step back and roll the clock back three years. MicroConf 2019, you were working on another idea. Talk us through how the transition happened.

Cody: That’s right. You can correct me, I think this was the last big US MicroConf—it was in Vegas—which feels just like another lifetime ago. I was there kicking around a totally different idea. 

My background is a developer. I work and live in Brooklyn as a consultant in Series B, Series C startups and really understood some of the challenges affecting software teams. I thought, I’m going to build a startup that is being sold to developers.

I was at MicroConf. I had a cofounder who just had a baby and couldn’t afford to work full-time. The zero to one problem is real. At MicroConf, I met the FE International folks. They are—I think your audience probably knows—a brokerage that sells businesses.

Shortly after MicroConf, Keeping came along. It had a great domain. It was a single-word domain, keeping.com, and a handful of customers. The out-of-pocket was not very much. It was this epiphany of, wait a minute. I could spend a lot of time trying to get an idea past the zero stage to 0.1. What about this idea? It really resonated with me that in the world of buying businesses, by the time they reach someone like me, they’ve been through a lot of channels first. A lot of folks probably passed over Keeping because it was a technical mess.

The FEI pitch is it just needs a little marketing to scale and it’s ready to go. Of course, it’s more complicated than that, but being a technical founder, I thought, okay, wait a minute. I can do the work needed to get this back into shape. Again, the out-of-pocket wasn’t very much and it came basically with a validated idea that maybe just needed some iteration.

Rob: There’s so much to dig into here. Did you know it was a technical dumpster fire when you bought it or was that after?

Cody: The due diligence process when you’re buying a business allows you to get into GitHub and poke around. It was like, oh, this doesn’t look great, but it seems to be working. It wasn’t really until a few weeks in when I was really running the business. I had customers emailing me saying, hey, the server’s down. Could you restart it again? We’re doing, basically, my customer support. 

In a weird way, that was a great sign because they weren’t churning out. They were completely tolerant of this service that was going down multiple times per day. I had to wake up at 3:00 AM to reboot the server. 

It’s really hard to know unless you spend a lot of time with the codebase to know how bad this is. It’s definitely a lesson that if you’re buying a business off of something like FE International, make sure you’re ready to support it technically because it definitely could be the hardest part of it.

Rob: I have bought many small software products. I bought info products, ebooks, and an ecommerce site. I bought probably 20+ of them from about 2006 until 2011. That was my last acquisition. There were a few SaaS apps in there, too.

Most people don’t know or don’t remember, but in the early days when I started talking about micropreneurship and being a software developer who doesn’t take venture funding, a big part of that I used to say buy instead of build because if you can get past product-market fit, amazing. You’ve saved yourself 18 months or 2 years from no code to product-market fit. If it gets you to $1000 a month, maybe you don’t have a product-market fit. What did it save you? Six months or maybe a year of nights and weekends depending on how complex the product is.

The first product I ever bought was DotNetInvoice. It was $11,000. It’s a […] load of money. It scared the crap out of me. I grew up making minimum wage, $4.15/hour I think was my first job. The $11,000 was more money than I knew about. I had never driven a new car. It’s all that stuff. It was a huge risk for me. But the moment that I acquired it, I realized this just saved me a year’s worth of nights and weekends. 

It had some issues. It was invoicing software. You have one job, it’s to do math right. And it had math errors in the invoices. It was not a technical nightmare like what you’re talking about. There were bugs, there were some overpromises, and customer support sucked. I fixed all that and it turned into a great business for me. Over its lifetime, it probably made me a few hundred thousand dollars. It was a side project. For $11,000 plus my time, it did that.

I think more people should be open to the possibility of buying apps. As a developer, oftentimes, the big complaint I get or the big reservation is how do you know what you’re going to get? How do you know if the code is going to be a mess? I’m always like, well, if it is, then you fix it. That’s your superpower. You are the person who has this ability, so what are you worried about?

Similarly, I don’t know if I’ve ever said this—and then I’ll actually continue with the interview instead of ranting—but I bought HitTail in 2011 for $30,000. It took me almost two months to get it technically to where I wanted it to be. Basically, I had to migrate servers. It was 40–60-hour weeks for 2 months, and I finally got it stabilized.

Over the life of that product, the revenue, which was almost purely net profit, plus what I wound up selling it for in 2015 was just over $1 million for a $30,000 investment and then months of my time.

Don’t get me wrong. It’s not like I was working full-time on that thing for a year before we started Drip, but I was willing to do the slog that other devs probably weren’t. There was a bit of risk because $30,000 is a lot of money. But at that time, $30,000 felt like $11,000 a few years earlier.

When I hear you talk about this, of course, I would have made that bet, too. But what I want to find out is when you were about to make this bet to put this money on the table and decide, hey, I’m going to go full-time, and I’m not going to build my own thing, were you reticent? Were you anxious? Were there second thoughts? How did that go down emotionally?

Cody: Absolutely. The amount of money we’re talking about here is not insignificant. It’s a big chunk of savings. I’ve got a wife and kids. There’s a partnership here, so it’s not as easy as just being like, well, this is going to work. 

It’s easier now looking back because Keeping is working and it is successful, so I can have some hindsight. One thing that has probably changed from 2011 when you bought HitTail or even 2019 when I bought Keeping is that the buying pool is much wider now. By the time deals make it to us little folks, they passed over private equity and really well-funded aggregators of SaaS businesses.

I don’t want to say we get the dregs, but just be aware that the good stuff may be swiped up before it gets to you. In my case, I very quickly decided that I had to rebuild it from scratch. 

As a consultant back when I was working at startups, that is almost always a bad idea. When I hear peers of mine that are saying, I’m going to do a rewrite, the honest advice I always have is you probably shouldn’t because it’s going to take five times as long as you think and it will never get done. But in this case, the app was just basically unusable.

One of the great decisions I made right away was to not do it myself and to hire a team. I hired a very, very experienced team in Poland, so it wasn’t like buying a team here in New York. Looking back, it may be a little counterintuitive. I probably could have put my head down and six months later or even a year later, come back with a working app.

I think that technical solo founders should stop developing as soon as they can afford it. They should move on to something else. They should start managing and stop developing. That’s an opinion that can’t be applied in all cases because obviously, you need to have some capital to be able to do that, but there’s some level—$2000 or $3000 a month—where the money needs to start going towards an offshore team or a person, and you become more of reviewing pull requests but stop shipping code. Again, I’m really glad I did that in my case.

Rob: That is a controversial take. It’s a take I have said many times. Anytime I say it, I get pushback from devs who say, but I want to write the code. I was like, well, who’s going to market it? Well, I’m going to hire a marketer. It’s like, huh, I think it’s harder for a developer to hire a marketer than to learn to market yourself and it’s easier for you to hire a dev because you know what you’re looking for. You have that superpower and the advantage of it.

That’s a trip. You didn’t rewrite it yourself, you hired a team pretty early.

Cody: I didn’t rewrite it myself. I even chose a tech stack. This is against the developer thing, though. You get to choose the tech stack. It’s written in Elixir and Phoenix, which is a very developer-friendly ecosystem. I was very excited to get in there and basically just spent my day writing code. But I knew from my experience elsewhere that it was just going to be a long, long slog, and I was going to be done and be at the same place as I started, except that nine months would have gone by. I didn’t have that time, nor that money to do that. It felt like, okay, my time is worth more than the rate that I’m paying for an offshore developer, so let’s do that. 

The inverse is true as well, which is if a solo marketer is involved in a technical business, they should hire a marketing team as soon as they can. Don’t learn to code, but learn how to manage developers. Get a little bit technical, find a coach, and work with someone else.

Again, for me, as I said, okay, I’m going to become more of a marketer, I quickly said, I’m going to hire a content marketing agency. I realized I had no idea if they were doing a good or a bad job. I’m just sending them a check and blog posts are going up. I realized, wait a minute, I need to do this on my own for a little while to figure out how it works, what’s good, and what’s bad. 

That’s true with every section of building a SaaS business. You have these little boss battles where you have to become good enough to manage the people you’re hiring. I don’t think we enter as founders there. You have to work for it, and that’s hard.

Rob: Yeah, especially when you don’t have buckets of funding because if you had half a million dollars, you could feasibly hire a really senior person who probably knows what they’re doing and can do the strategy. But when you’re bootstrapped like us, that’s just not an option. Like you said, you’re going offshore. 

Like you, I did customer support for all of my apps before I hired it out. I did marketing for all my apps before I hired it out. I did development on all of them except for Drip before I hired it out, but eventually, I hired it out as soon as I could.

A big epiphany for me and something I tried to preach early on through my books and all that is there aren’t that many developers who start software companies, remain developers full-time, and experience the success that they want. There’s usually some type of transition to a different role. Not always, but I find that that’s pretty common.

You hire a small team in Poland and they rewrite the codebase. Did you have to migrate? Did you relaunch it? Did you have to migrate people over? 

Cody: I bought Keeping with a handful of customers so it wasn’t like, oh my God, how am I going to migrate these thousands of accounts? It was small enough at that point that we could do it by hand. Literally, account by account got pushed over to the new database. Over a period of weeks, we moved all the customers over and then shut off the old app. 

It worked, but again because we were small. I would be really terrified to do it right now. Mostly just the database side of it, but there are patterns that you can do to do that well. It was a scary couple of weeks, but we got through it.

Rob: You get everyone migrated over and then does it start growing? Did you launch it? What happened next in terms of getting traction? When you and I first spoke, it was about a year after you relaunched, I guess. It would have been January-ish of 2021. You got done with the codebase in March 2020 and you were far enough along that it made sense for you to join TinySeed. Some magic happened in those 9 or 10 months.

Cody: I would love to say that a bolt of lightning came through the sky. What happened was that the content marketing that I had been doing started to take root. It’s always a lesson. It takes a lot longer for that to happen than you think. I started to show up in search results for some really important high-intent keyword phrases. The growth just kept happening without me focusing too hard on marketing. 

Unfortunately, that was a little bit of a trap because there was natural growth happening month-to-month, partly because I’m on the lower end of the MRR curve at this point. I realized after about six months, who my customer is? Who am I marketing this to? Keeping has grown organically to this point. There is a lot of advice in the bootstrapper community about niching down (for lack of a better term), which is like, oh, wait a minute, you’re a customer help desk for anybody. How can you market to everybody? You should be a customer support tool for school principals and lawyers.

Since Keeping already has a Gmail niche, number one, you can’t use Keeping unless you’re using Chrome and Gmail. I feel like we’re already sliced off enough of the market that we weren’t going to try to go and be yet another slice which was for some persona. Trying to build Keeping off of its revenue by the bootstraps was really hard when you’re sub-$5000 MRR. There’s just not enough money to pump back into marketing.

One of the reasons I joined TinySeed, frankly, was that you need to have a little bit of a war chest if you’re in this giant market. Zendesk has 6000 employees. It’s a publicly-traded company. There are some advantages to that. They probably move really slowly, but they also take up a lot of oxygen in the marketing space. 

A lot of what I was trying to do on my own was just good enough, but it wasn’t quite enough to get over the hump. In mid-2020, I hired Asia Orangio at DemandMaven and we did a bunch of customer marketing research, which was also really revelatory and a key step in us growing.

Rob: Asia is a friend of the pod. She’s appeared here several times. She’s a friend at MicroConf and a TinySeed mentor. That’s awesome. She’s great.

You touched on this a little bit. You basically said you’re in this space, you’re starting to get traction, and you’re competing against Zendesk who has—I thought you were going to say customers—6000 employees. They’re that big. I guess they’re a public company, right?

Cody: They are public, yeah.

Rob: That’s still a lot of people. You’re competing in this market and you’re competing with big companies. I’m sure there are some really obvious challenges, but what are some of the challenges you’ve seen? How have you overcome them?

Cody: The biggest challenge is just that there aren’t new marketing channels sprouting up every day. Given a different category, I’d be paying a little heavier in paid search because you get a little more of an instant boost of customers. Just frankly, that channel’s closed because of investment that’s coming from these big publicly-traded companies.

The other challenge is that we did a bunch of customer interviews. Another truism that we all know at this point is you have to be talking to your customer and find out what they need. When you’re in a big category that’s been existing for a long time, like a customer support help desk, when you talk to customers, sometimes they say, I just want you to build Zendesk. The features that they know about are the ones that exist in other tools. You have to be willing to say, no, we just can’t do that right now.

An example of this is a chat widget. A lot of my customers want a chat widget, something we may do, but I have to be conscious as a solo founder with a small team that the doors open up from a support standpoint.

The challenges come from just trying to play a feature-to-feature war with these big companies. You just can’t do it. Navigating, finding my little seam in this big space, and understanding why people choose Keeping over these other tools is just super important. Otherwise, I’m just building Zendesk and I’m going to lose, right?

Rob: Right, because your customers are going to just keep requesting like, I want that feature. They used to do that with Drip. Everybody wanted us to build Mailchimp. It’s like, no, that’s not how we win. We need to either have a unique feature set, unique positioning, or own a traffic channel. Just get ranked one higher than Zendesk and Google and you’ll do really well. Will you be willing to pay more than Zendesk for an ad? I know you can’t, but then you’ll do really well.

I hear a lot of people wanting to just replicate an idea. It’s like, I don’t mind people building competitors. I think that’s great. But how are you going to win at least in this small segment? What you’re talking about is understanding your differentiation, right?

Cody: Yeah. It’s communicating that in a way when folks are looking at Keeping. How is this different is the challenge. It is to immediately say, right off the jump, here’s how Keeping is different.

What we find for most folks is another tab and another tool. A lot of folks don’t want that. We have to somehow zoom that into them and say, listen, you can do everything you need inside Gmail. Wouldn’t that be nice?

That takes a little bit of communication. It takes a video. It can take more than you can get off of an h1 on a website. The core challenge right now is making sure that we have space from these giant competitors and there’s a reason to choose us.

Rob: I’m going to start a new segment on Startups For the Rest of Us starting today. I’m going to ask every founder who comes on here. I hope you keep me accountable to this. This segment is called, How Did You Know When You Hit Product-Market Fit?

The reason I want to ask that is because you know it when you see it. I remember pointing to two graphs when Drip hit product-market fit, which obviously is a continuum. You can have it with a smaller group and then more.

It’s not this binary thing, but I remember pointing and telling Derek and Anna, that’s what product-market fit looks like. The two graphs were churn plummeting, trial-to-paid accelerating, and traffic was flat, but all the numbers are going right. I knew it, and we launched automation and blah-blah-blah. But that was my experience of it. I know that a lot of people are always asking, how do I know? How did you know? Do you remember that moment?

Cody: I still don’t know. I’m waiting for the email from you, Rob, to tell me that product-market fit. I think you’re right. Churn is a big indicator. When you’re talking to customers, you can hear it from them whether they’re excited or happy that they found the thing you’ve built. I don’t think you always see it in MRR graphs. A lot of folks imagine product-market fit being this big hockey stick in ProfitWell or ChartMogul. I don’t think that’s the case because you still have to expose your product to the world and you have to sign up folks. It’s really as with these smaller metrics.

For us, we’ve generally seen a really good trial-to-paid conversion. We have some metrics internally that we use, about when is somebody an engaged user, and when did they actually go to paid. And those numbers continue to get better.

That’s how we say we’ve met product-market fit, but honestly, I think it’s a constant thing. You’re always polishing, iterating, and maybe expanding your product enough so that you’re fitting a few more customers at a time.

Rob: That’s perfect. That’s exactly how I think about it, too. Not only is it a continuum. It’s not a winner’s era. It’s more like a 0 to 100 but with a certain group of people. And that ring gets bigger and bigger, hopefully if you’re doing things right. That’s why it’s so hard.

You have this successful business, it’s growing well, you start ranking for these terms, and you applied to TinySeed about seven months ago. Is that right?

Cody: I’m in the November batch.

Rob: When did we run them? I think we ran it in August. Is that six months? Yeah, you applied about six months ago. What went into that decision? I always preface this question with, I don’t bring TinySeed founders on here to make it an advertisement for TinySeed. I think that of the founders I know who have really interesting stories, there are a lot of them that wind up in TinySeed. In addition, it’s not for us to sit here and say, oh, TinySeed is amazing and this and that even though I think it is.

I do want to know, from the outside, when you’re considering whether to take money—whether it’s from TinySeed or someone else—it’s a big decision. It’s a little bit like buying an app. It’s a hard decision to undo and it is a risk. You are giving something up. In the case of buying the app, it’s cash, and in the case of TinySeed, it’s equity in your company. What was that thought process for you?

Cody: It’s funny you asked because my decision to apply to TinySeed was always in the back of my mind. I think this is probably true for a lot of bootstrap founders. Like, oh, I think that I’m going to try that someday. If you’re paying attention to the MicroConf ecosystem, you hear the announcements that it’s happening. I was listening to Startups For the Rest of Us and you announced it like, hey, TinySeed batches are opening up. I literally, on an impulse (in my boxers), went over to my computer and said, I think I’m going to apply.

It was a 5-minute or maybe a 10-minute process of putting in some numbers into a form. I wish I could say it was more considered. You just gave a great preamble about what a big decision it is, but for me, it was like, well, I’m just going to do this first step, see if I get it, and then I’ll make the next decision.

The honest answer on why is twofold. If you’re a solo founder who has two kids—I’ve got a five-year-old and an eight-year-old—there’s the money. Of course, that’s an important reason. But the real honest answer is that you are desperate for validation as a founder. I’m like, am I doing the right thing? Should I keep doing this? It’s not just to your buddies in the business community, but to your wife and your partner.

Joining an accelerator, whether it’s TinySeed or another one, is a really important validation of being like, hey, you’re on the right path, keep doing this. It’s easy to overlook that part of taking investment or joining an accelerator. It’s an external validation that I think we all need as founders. Then, there’s a community that comes with it, which has been, frankly, as worthwhile as the money. We’re all in our basements right now with COVID doing the best we can, but it’s a grind. If anyone tells you that it’s not, they’re not telling you the whole story. Being able to do that in a cohort with other people and to be able to do masterminds with folks that are in the same spot as you is great.

The second reason is the more obvious one which is I’m in a big expensive category with lots of competitors and I need money to market to them. Going to my savings to do that is a limited option. I can’t do that forever. I can’t pour all of the profits into marketing forever, so having an outside investment when you’re in a big category is really important.

It’s allowed me to really invest in content marketing. I’ve hired two writers. I have a content strategist. There’s a whole bunch of folks that came on board because of the investment. That would just not be possible if it wasn’t for that.

Two separate reasons why TinySeed, one financial and the other is emotional.

Rob: I think you touched on some good points. Einar and I talked at one point about why don’t we just raise a fund before we launch the accelerator? It would be so much easier to just write checks because the accelerator is a lot of work. It’s what we signed up for, but we wanted to not just write checks. We wanted to be able to mentor, advise, and build that community. 

If you listen to all the Startups For the Rest of Us and the TinySeed Tales interviews I’ve done with TinySeed founders, they keep coming back to that community. The advice is actually as important, if not more important, than the money.

Cody: Right. There’s a “playbook.” It’s important that folks understand that everyone’s journey is their own journey and there’s no, okay, you follow steps A, B, C, D, E, and you’re going to be a unicorn. That’s absolutely not the case. I do think that there are things that you don’t know that you don’t know, that are incredibly helpful, and you can learn in—again, I’m using this more generally—any accelerator environment. It doesn’t have to be TinySeed that gets you up a level. That’s really important if you’re going to be a founder and a CEO of a company.

Rob: Cody, thanks so much for joining me today. Great story and told very well. If folks want to keep up with you on Twitter, you are @codee. I get the double meaning there; you’re a coder and you’re Cody. That’s if they want to see your latest Wordle. And keeping.com, of course. Again, your h1 is “Delightfully Simple Customer Support in Gmail.” You never have to leave Gmail.

When I first saw this idea, I thought, I like this because Hiten Shah with Crazy Egg and whatever else he had done—I don’t think his metrics stayed in Gmail—I know that to this day, Crazy Egg, which is a very profitable business and quite a few employees, everything’s done in Gmail. They have custom labels and all that. Have you talked to him? Have you heard about that?

Cody: I have not talked to him, but there’s a whole ecosystem of businesses that are riding on top of Gmail. God bless us if Gmail decides to not allow us into their world. Platform risk is real. But there are also three billion users there, so it’s nice to have access to that.

Rob: Awesome. Thanks again for coming on the show.

Thanks again to Cody for taking the time to tell his story and for coming back on the show next week where we’re going to dive into nine tactics for amazing customer support.

If we’re not connected on Twitter, look me up. I’m @robwalling. Thanks for listening today, and I’ll be back again next Tuesday morning.

Rob: It’s another episode of Startups for the Rest of Us. It’s episode 590 with Craig Hewitt and I answer listener questions. We cover topics ranging from building versus buying internal tools, how to compete in a competitive space, accounting software, a founder who has a zombie company where investors want their money back, and I think there are at least two or three more. 

If you recall, Craig Hewitt was the subject of the first season of TinySeed Tales. He’s the founder of Castos, which is a podcast hosting both public and private as well as podcast production services. Craig Hewitt also co-hosts a couple of podcasts, one called Rogue Startups and the other is Seeking Scale. Craig is a wealth of knowledge, runs a very successful SaaS company, and has a great take on all the questions that we talked about today. 

Before we dive into that, I want to let you know that MicroConf mastermind matching is happening again. We do it a few times a year, I think it’s about every 3–6 months. If you’re not familiar, I’ve been espousing the benefit of startup masterminds for almost a decade on this podcast. I’ve personally relied on masterminds to sanity check decisions, help myself with accountability, and frankly, just maintaining motivation and having other founders invested and interested in what I’m doing has been an invaluable part of my journey. 

We now have over 600 successful matches under our belt at MicroConf from over 50 countries across 20 time zones, with a collective ARR north of $150 million. There is a small one-time fee to be matched with your mastermind and that’s all visible on microconfmasterminds.com. That’s where you would also go if you wanted to start your application. It takes I think 5–7 minutes. You give a few pieces of information, like location, experience level, your goals, your skill sets, some business metrics, and producer Xander and the crack team at MicroConf matches you up with other folks. 

Again, we have hundreds and hundreds of successful matches. Hundreds of masterminds that are currently operating and providing value to founders. If you’re not in a mastermind—I think you should be—head to microconfmasterminds.com. With that, let’s dive into answering listener questions with Craig Hewitt. 

Craig Hewitt, thanks for joining me back on the show. 

Craig: Hey, thanks, Rob.

Rob: It’s always great to have you, man. You said you’ve been on the show three times. I think you’ve been on more. 

Craig: I think four, maybe five? Yeah, it’s been a hot minute though.

Rob: It mixes with TinySeed Tales where we did 10 episodes or something across that year. You were Season One of TinySeed tales. Have you gone back and listened to that? Because I haven’t in a while.

Craig: I haven’t gone back and listened to it, but I think about a few of those recordings a lot. We had some really great times and some really horrible times, and I’m scarred. I’d definitely go back and say I cannot believe that happened, for sure, but it’s really cool to capture it in the moment because it’s like having kids. You forget about changing diapers at two in the morning and it all seems like roses so it’s really good to grab it in the moment.

Rob: I would agree. There was one recording you made at 11 o’clock at night. You’re just like I feel so terrible. You did the reality TV thing where they go in the booth and you sent me that recording. That’s a really good episode. I’m working on season three right now. 

Craig: Awesome. 

Rob: Well, sir, let’s dive into some listener questions today. These are some of my favorite episodes where we get to hear from listeners who write in to questions@startupsfortherestofus.com. Sometimes they just send a text question like Devon Tracy did, which I’ll read in a second. Or sometimes they go to the website and they can send a video or an audio question using the link at the top, Ask a Question. 

The subject of this one is a non-technical founder. He says, “Hey, Rob. I am a non-technical founder. I have an idea for a business/software that I’m interested in pursuing. As a non-technical founder with a day job as a high school math teacher and a decent amount of marketing background selling products, memberships, et cetera through Facebook and Google ads, I have an idea. How do I go about finding programmers to help me build this? I know you’ve answered the questions about vetting partners and hiring good talent on the show. My question is even more fundamental than that. Quite literally, how do I find people to talk to about this? Short of going on Fiverr which doesn’t seem like the best option yet. I have no idea how to go about it. Thanks for any insights you have.” 

Craig Hewitt, coincidentally or not, you are also a non-developer founder. What do you think of Devon’s question?

Craig: I’m just smiling hearing this question. We’re about five years into Castos at this point. I am a solo non-technical founder and can totally relate to this situation. I’ll just say for background, I got really lucky on our first developer. Jonathan Basinger was with us for four years. It was just amazing, like really good work. It would help me kind of level up my skills as a founder working with a technical team for the first time because that is super hard. For people who haven’t built software before, to work with a developer, cold, out-of-the-box is just super hard. 

My advice would be to find a technical co-founder. I will never, ever, ever do this again by myself because we’re just at the point now with 14 people to where I feel it’s honestly tolerable, that the risk of me not being technical is okay right now. But before, it was just silly. I had no idea what I was doing and we got by with a lot of help and with a lot of really good early people. 

I think they’re asking how do you make sure you get those good people? It’s so hard. Then the risk of if you get the wrong developer, you’re just sunk. You’re going to spend a whole bunch of time, money, and knock it off the ground. I think you need somebody with skin in the game, or them like that. Unless you had a bunch of money or were really sure of your hypothesis for product-market fit and your marketing abilities, to where you’d think you’d get off the ground really quick, like a big audience or something, then you probably could swing it. If you don’t have those few things, I would find a technical co-founder.

Rob: Yeah, there is a reason that I think it’s a low two-digit percentage of bootstrap SaaS founders don’t have at least one technical co-founder. I’m going to take these off the top my head, but it’s ballpark. I think it’s somewhere around 15% of TinySeed companies don’t have a technical co-founder like yourself. Somewhere in that 10%–20%, but I think it’s about 15%. 

I think in the broader kind of indie SaaS space—we did the State of Independent SaaS with MicroConf—the number is a little higher. I think it’s maybe 20% or maybe just north of 20%. It’s a vast minority because of just what you’ve said, of SaaS is really complicated. Building info products, courses, and all of that takes some expertise, it takes some time in front of a microphone, or writing, or audio or whatever, and those are skills unto themselves. SaaS is like a moving jet engine. As Reid Hoffman says, you’re assembling it on the way down as it’s crashing to try to keep it from going. It’s very complicated and it’s constantly moving. 

Craig: And just to peel back what you’re saying, the needs of your technical team change over time. That’s the really hard thing. You could find a good developer for an MVP, but they’re probably not the person that’s going to help you scale and stabilize your AWS setup. That’s where a person that 100% you trust has your back no matter what is just super important because you don’t even know. You don’t know what you don’t know.

Rob: That’s right. When I think about it, if you had buckets of money, you could try to hire and find an expensive, really good developer in your own country. And that is possible. If I were good to go about that, I would get referrals, I would go to the Toptal. There are certain sites that are just higher priced, it’s not Fiverr. It’s places like that. 

One way to get to the point where you have those buckets of money is to stair-step your way up if you’re non-technical. It is to start with those simple products, whether they’re info or courses. Building a Shopify app, having that built, or a WordPress plugin, is simpler than SaaS, and the technical debt is less. You’re not self-hosting it so you don’t have to worry about all the DevOps stuff. 

Again, you don’t know what you don’t know, but there’s a reason that I’ve espoused the stair-step approach for years and years, it’s for both technical and non-technical people is that then you learn 60% of what you know, 70% of what you need to know in order to run a SaaS. If you’re successful, you get some revenue out of it. Now you take that revenue, and you parlay that into either hiring your co-founder, or at least when you approach a technical person and say, I want you to work nights and weekends, while you have a day job as a developer at a Fortune 1000 Company. 

They get these offers all the time, so they’re going to say, why should I do this for you? You can say, well, I have this money that I can pay you. Or look, I’ve already built a successful product. I have an audience and I want to sell it to the same one. Or I validated it, I pre-sold it. I have an MVP. There are all these things. Coming to a developer and asking him to be your co-founder for free, may be even more challenging than trying to hire one because developers just get this pitch all the time. If you’re a good developer, you do, every few months—a relative, someone says this—and that’s the challenge. 

Craig: I would say if you are hell-bent on going this way and wanting to do it right now like some kind of community like MicroConf Connect or whatever, because there are those people searching for their next thing in there, too. It’s the right time to fit in a lot of times. It’s the right person at the right time in their career, changing career paths. You might say, hey, yeah, I got six months of the runway. I can go do this. Let’s give it a whirl. But that’s a big risk for them, so you just have to understand that.

Rob: We make that analogy often of finding a co-founder is like finding a spouse, a life partner, in that you’re probably going to have to date several, and it’s not going to work out. That’s the hard part. Okay, so you start this SaaS app, someone starts writing the code, and then it doesn’t work out. Now you have this code base. You have this legacy that may be even more concrete and heavy than the emotional baggage of dating. Am I right? 

Craig: Absolutely. 

Rob: So Devon, it’s a great question and obviously, it’s not all sunshine and roses. I wish I could tell you there was a magical thing. I’ve hired good devs on Upwork. I’ve hired terrible devs on Upwork. I’ve hired good devs from Elance back in the day and I’ve heard folks hiring through Toptal. 

Again, if you have the budget, there are agencies that can build a good product, but boy, to pay them to build a SaaS app when I don’t know if you have a product-market fit. Certainly you don’t have it, but how far along your confidence level is, that this actually is a good idea and you want to drop $30,000–$40,000 on it. It gets tough. 

Then what do you do? You launch. You get a couple of thousand in MRR, best case. Now, who maintains that? Because agencies are expensive. I’ll stop talking there. Thanks again for the question, Devon. Let’s move on to our next one. 

This question is from Prabat and he says, “Looking for advice for a poor startup founder. I’m a new founder from a beautiful but poor country, Nepal. I believe software has no borders and all it needs is a good idea to be a global idea. Hence, I’ve been trying to learn for the past nine months. 

I have a question. I have a SaaS idea but I lack funding as my country’s startup ecosystem is not very advanced. I’ve started to do some client projects, which allow me to invest in my idea, but sometimes I find it very hard to manage between client projects versus my in-house ideas of my SaaS idea. 

Clients sometimes come up with very hard deadlines, which happens quite often, and that gives us no time to manage our own in-house SaaS ideas. What do you think would be a wise way to manage between these two pulling the forces? I don’t want to be dependent on client projects to sustain my startup. Every week listener, Prabat.”

What do you think, Craig Hewitt? Have you ever been in that boat where it’s kind of nights and weekends and they are competing for priorities? 

Craig: Yeah. I think all of us come from this type of scenario. Day job and wanting to start something up on the side, or doing consulting or client work and starting something up on the side. For me, there are a couple of paths. If you’re quite sure that your idea is good and/or you have an MVP, then joining an accelerator program and getting money is a good way to go. I will say in all fairness, the amount of money that you get from TinySeed is often not enough to get you from zero to one if you’re by yourself. I know that’s not the model that TinySeed is going after these days. 

This probably my second part is to try to make it work with nights and weekends and maybe work for days on client projects and Fridays on your own thing or something. Be pretty regimented about that. I know someone who owns a consultancy and owns a bunch of products. They actually build the products back through the consultancy, to make all of this work from an accountability and accounting standpoint.

I would maybe try to do both, really be diligent about setting aside a day or a half a day a couple of times a week for your product, and pay the bills with client work. Raising prices on the client work obviously makes that a lot easier, so if you can raise prices by 20% then you don’t lose any of your revenue. Generally, I think there’s almost always room for that as a consultant. 

Then once you get a product and have some degree of product-market fit, things like TinySeed make a lot of sense to really just accelerate your ability to stop doing client work and go full-time on this more so. That’s probably what I would do. 

Rob: I think that’s a really good suggestion. There is no easy answer here. There is no silver bullet or magic pill that you’re going to take that’s going to help you. I’ve heard of a lot of agencies and in fact, I was on micro agency myself as I was doing these products. I also had to say, I can bill $150 for the next 60 minutes or I can go work on this product that is making me almost no money right now. I had to make that decision every day. 

That $150 went to my bottom line and my family’s bottom line, and I really struggled with it emotionally. Morally, am I doing the best for my family if I’m taking two hours a day, $300 a day, that’s $1500 a week, that’s more than $6000 a month that I could have been billing because I was always booked full time? I just had a good funnel. I had to wrestle with that, which is the same thing that you’re asking about. How do I reconcile that? Especially with things that aren’t a sure thing. And that’s the hard part. 

I really liked Craig’s idea of being disciplined about it at either carving out one day a week, or it sounds like you have a small team. You fork one developer off and they’re doing the skunkworks project and you never pull them into client projects anymore. I don’t know how big your team is. 

At a certain point, I’ve heard some agencies that take 10% of their entire team, all you’re doing is focus on this one idea. I would be careful. I think Prabat may have mentioned that it was in-house products or projects. I would focus on one with your already limited time. Then I think a big thing is are you building or are you validating? 

If you haven’t validated, you shouldn’t be building at all. Just because you can write code doesn’t mean you should be writing code. The biggest risk is not whether you can build this product. The biggest risk is that no one will care and that you won’t be able to market it.

That’s the very first thing I’d be figuring out is, what are my channels? Where am I going to get customers from? Then start building those and talking to those potential customers to find out do they actually need this? Do they actually need this thing we’re building? Or are we wasting our time? Very much a customer development mentality.

Craig: There’s a very popular book called The Mom Test that talks a lot about this, is people tell you what they think you want to hear. They’re dishonest, not in a malicious way, but they don’t want to be jerks. I think when doing customer validation, especially these days, I think it’s super hard without a product. Maybe pick that book up and read through it so that you can make sure you’re getting honest and objective feedback on your idea before you build something. 

I’ve seen a lot of friends and colleagues in space, validate something they thought, they go build it, and then it doesn’t work out. That’s a bummer, just in terms of opportunity cost, real cost, and everything. I would definitely be careful about how you approach that.

Rob: Here’s an advantage you have, Prabat. You live in a country with a very low cost of living. I’m guessing the wages are low compared to what you might be able to charge if you’re going to market to the US market. You’re going to have a lot more revenue than you will have cost. We have some folks, TinySeed applicants or folks at MicroConf who I talked to. They’ll be at $10,000 MRR, and they’ll have a team of eight working on it. I’m like how are you bleeding money? They’re like no, we’re at breakeven. Well, how are you breakeven? Well, we are in India and it’s just very inexpensive. I can hire developers for pennies on the dollar compared to what would be in the US. You have that advantage of your cost basis is low. 

Another thing is if you are able to do agency work, do your consulting work for international clients in Europe, in the US, you can obviously bill more. That’s the internationalization of all this, the kind of globalization I think can provide you with some pretty incredible opportunities. That’s the advantage you have. 

It’s the advantage we kind of had being in Fresno, California and bootstrapping, not to the extent that you are in Nepal, but to hire a developer was about a third of the cost of the Bay Area, which was a three-hour drive away. That was a reason I didn’t live in the Bay Area. I didn’t want to deal with those costs as a bootstrapper. Think about that as potentially your superpower. Thanks for the question. I hope that was helpful. 

Our next question asker would like to remain anonymous. He says, “I have a zombie company and investors want their money back.” He says, “Hey, Rob. I’ve been a longtime listener of the show and your approach and ethos have always resonated with me. Your podcast subjects have an uncanny knack of being timed perfectly with whatever stage of the startup journey I happen to be up to. 

My question is essentially about whether I should be prioritizing getting investors their initial investment back to them or continue to grow my company for the benefit of the co-founders, but probably not the investors at least for a number of years. I will say this is a longer email so bear with me.” 

He says, “To keep the stories brief as I can, my company raised two rounds of capital—2017 and 2018—from a mix of venture high net worth individuals and a couple of friends and family. The total amount raised over both rounds was in the low hundred thousand. It’s not a huge sum overall, but let’s say the friends and family would love to have their chunk of change returned as soon as possible.”

I’m going to break in here. It’s the first two months of 2022. Let’s just say it’s the end of 2021 for date’s sake. This is a three- to four-year-old investment. If people want their money back, that’s a problem because startups don’t return money back quickly. I will couch that and resume the email. 

“My business had a rather inflated valuation for the second round so those friends and family got a pretty rough deal. Then in 2020, the business took a dramatic change in direction.” Basically, he lost his co-founder. Now, he’s running it solo. 

He says, “Although we’re finally breaking even, seeing good growth, ultimately, the company is in more of a lifestyle business for the next few years. Not so much the venture or the high net worth investors, but the friends and family seem to be getting impatient. Realizing they didn’t invest in the next rocket ship, they’re questioning when they can get their money out. If we sold the business now—and there is no guarantee we could sell—investors might get 75% of their money back, but the ordinary shareholders, meaning the co-founders, would likely get nothing.”

Breaking in here, I guess there’s a 1X liquidation preference. “If the business continues to grow for (say) another five years, it’s likely the co-founders would get something back after sale and investors are more likely to get all their money back, but realistically not much more. In other words, investors’ money would be stuck in the company, not doing a great deal for them for five or more years, but co-founders would benefit from the extended period of growth. 

Should I feel guilty for building the business essentially for my own employment and future gains of the co-founders? Or should my priorities be to maximize the return to investors no matter what, and therefore sell the company now given that they’re unlikely to see much additional return for a number of years?”

Craig Hewitt, what a predicament. what do you think?

Craig: This is a really hard one. We have raised money in two different rounds, just under a million dollars total. I will say, personally—and this is a really personal thing—I feel an enormous obligation to return money to our investors. It is probably the thing that drives me most days, the business is for me, but also a chunk of the business is not for me anymore. It’s for our investors. That’s the decision that I made about 3½ years ago when we joined TinySeed. 

I think that for folks who haven’t brought on investors, that’s definitely something I say, when you have an investor, it’s not just your business anymore. You have a responsibility to them. This is going into answering the question. I would say that you need to do a little bit of both here. You definitely have a responsibility to make a return for investors if at all possible. If they’re not going to get their money back right now, then right now is not the time to sell. I would ask them to just be patient and just explain this exactly to them. If we sold the business right now, you’d get $0.75 on the dollar back. I think that’s a pretty bummer deal and if you’re hell bent on that, then maybe we can work something out to where you could start paying it back over time or something.

To break even, that would be tough. They don’t have hundreds of thousands of dollars in the bank to just pay them back with. That’s tough, but I probably would not try to just sell the business now and liquidate to give people an impartial return. Just try to frame it with this is where we are. This is what has happened with the co-founder and the setbacks we’ve had in the business. This is what I see as our trajectory over the next couple of years and in two, three, or four years, this is what I’m hoping to see.

There’s this term of lifestyle business in there. Some people that listen to this podcast might not like this. To me, lifestyle business and investors do not go together. When you take investors, you’re signing up for the hardball and really trying to build a great business that is really high value in the market. When you create a lifestyle business, you’re creating the business for yourself so you can make a bunch of money and not work a lot, to me. There’s nothing wrong with either of those but the two can’t go together to their fullest extent.

I would say that they probably need to get serious about growing the business and make that return for their investors. That might not be the answer they want to hear, though.

Rob: I don’t know that I disagree with anything you’ve said. I think that this is the trouble with friends and family money. There’s this phrase, it’s a pejorative term, but they say they’re smart money and there’s dumb money. Usually dumb money is it’s friends and family who don’t understand startups or it’s maybe the dentist or the doctor down the street who wants to write a $25,000 check and then feels like they need to give you a bunch of business advice about your start up.

That’s not what you want. You want business advice from the smart people, the venture capitalists, potentially high net worth individuals if they were entrepreneurs. You want advice from them. I guess as a cautionary tale, it’s not going to help the asker here, but as a cautionary tale if you’re going to take money from friends and family, I would not only sit down with them, but I would put it in writing as well in an email, please realize that this is more than likely to go to zero than do anything else. It is also, if it’s going to do anything else, going to take me 7–10 years. That’s typical liquidity for venture backed startups.

I’m just going to throw that number out. For bootstrappers, that’s actually quite a long time for someone to run a company, but I would just set the expectation. It’s really far out. The go to zero part, what’s so interesting is the venture capitalists and high net worth individuals are like whatever, because (a) they probably already knew that. They did not expect money out of a startup in three years. And (b) they have a portfolio of investments. How much do you want to bet, they don’t have one startup investment. They have 10, or 50, or 100 and you’re one of many.

Friends and family, again, the trouble with it is exactly that. If they write you a check and it’s a chunk of their net worth, everything’s riding on that. If it doesn’t win, they lose a lot of money versus if they had a portfolio of 10 or 20, which realistically if you’re going to get into angel investing that typical advice is, you don’t make a lot of small bets. If you have $25,000 to invest in startups and you’re accredited, make 25 $1000 bets, or 10 $2500 bets because you just don’t know which of these is going to hit.

Craig: Maybe applicable to this but just curious, for me the return expectation for an early-stage angel investor is double their money. I’m just reading between the lines here. This is maybe not a unicorn business, which is totally cool. We’re not either, but we’re hoping to double our investors’ money. I think that that’s a fair expectation. For folks who maybe are earlier on the process of just talking to angels, that’s what they should expect and a good outcome.

Rob: Angels who are used to venture investing, they want it to go to zero or 100X usually. There are certainly more angels like a lot of the TinySeed LPs who would say a 5X or a 10X return is good because there are a lot of downside protection in SaaS because the value usually doesn’t go to zero. If you build anything of any revenue these days, you can sell it. I don’t know of angel investors who would be happy with a 2X return. Usually, in my head 3–5 is the more sure bet, the more sure thing, but also it’s a lot of individuals.

You and I are just generalizing across a bunch of people and some people are fine with a really not risky bet. Because betting on a SaaS company, once they’re north of $1 million and have a pretty consistent growth rate, there are not many bets I know that are as sure in the space. Certainly buying individual stocks is not. I don’t think it is as predictable as a return. The downside protection is really strong. 

Anyway, question-asker, I think Craig’s advice is probably correct. If I were in your shoes, if I was still interested in the business, I would continue to run the business. I would focus on growth. I would focus on getting investor returns, but also focus on getting me a return for the years that you put into this business.

To walk away from it now and walk away with nothing because some people want money, and I get it. Friends and family can be a pain in the ass and they can ruin your thanksgiving. Some people don’t take friends and family money because of it, but the right decision, the non-emotional decision is to keep going and hopefully provide them with a return and you as well but definitely feel your pain. It sucks to be in a predicament.

The next question is actually From Twitter. I had posted a few weeks ago about topics for Courtland Allen and I to discuss. There were 30-something topics and we covered four of them. I just pulled this one down because I feel like it’s a quick one. “Do you guys have any resource recommendations for accounting software for founders? It’s a boring topic but it’s essential when you do actually start making money.” What do you think?

Craig: We’ve used Bench for a long time all the way back to the PodcastMotor days and it’s really great. I think that we are just getting to the point where we might need something more at this point, and that’s a whole other topic. I don’t have a recommendation for whatever the next step is after Bench, just to get a little more sophisticated and fine-tuned or fine-detailed accounting, but it is accounting software and a service in one. It’s about $150 a month and I think it’s great until you get to (say) $1 million. I think it does everything you want it to do.

Rob: For me I use Xero. I believe they’re an Australian company and they basically went after QuickBooks Online and they said we’re not the QuickBooks Online. We are not the crappy version of that. They import from all the credit cards and all the Stripes and PayPals and all that. Then I have an accountant/bookkeeper who monthly logs in and does the reconciling. Bench has it built in where they have people on staff and I don’t know if Xero does or if you just go to their page with a bunch of freelancers and hire people. But if you’re just looking for software, I think either of those is a great resource.

Next question, “How do you build in a competitive market as a solo founder? Example, a community platform, social media tools,” and he didn’t say it, podcast hosting. I’m throwing it in there. I picked this one out just for you. How do you build a competitive market, sir?

Craig: I think that the couple of things that I would really keep in mind are first of all to have something that’s different. For us it was our integration with WordPress early on. Now it’s how we think about and how we integrate with other tools around private podcasting. Those are the two things we hang our hat on. You can easily say we’re podcast hosting for people that do X, or Y, or want Z. That’s just really easy because then you can be really opinionated on your marketing copy on your website, where you stand in the market, and how you talk to potential customers. That’s the easiest not knowing where the question asker is coming from. 

I think the other one that’s really powerful is early on, especially the founder having a really strong brand. I think that scales to a point and then doesn’t anymore. It is a really nice advantage to have early on. I think I had a personal brand we started and that helped. There certainly are people that have bigger ones. That just helps you get off the ground, but I think just being as opinionated as you can, your positioning, stance, messaging, and everything is the easiest way to stand out.

Rob: You’ve touched on one of the four advantages for faster SaaS growth that I had named in this talk that I did four or five years ago, but it was having an audience, having a network, being early to a space which, while there’s competition—that one doesn’t apply—and owning a unique traffic channel. I think any of those can help you in a competitive space. 

I liked your mention of private podcasting because that’s essentially a unique position that you’re taking. You’re being opinionated in your copying and you’re positioning Castos as different from all the other players. You’re carving out this corner and if you want public and private podcasting, you come here. 

I think I’ve harped on this a lot with Mike Taber, when he comes back on the show of what do you have that’s unique in your startup? You either need unique positioning or you need to own a traffic channel. I’ve seen entire businesses built on buying a WordPress plugin and owning that traffic channel, or being really good at SEO. We see SignWell doing quite well, but he’s competing against DocuSign and all these other e-signature things.

He does have some unique positioning. This is Ruben Gamez, the founder. He has been on the show many times. He has some unique positioning but really without owning that traffic channel. I used to call it a proprietary traffic channel, but that’s not really what it is. I’m really good at this or I own, like I said, an add-on for an ecosystem and I rank for this traffic. 

So there’s unique positioning—we’ve touched on—audience network, and owning a traffic channel. The one other thing that can help you and I don’t know if on its own if it’s enough, but it’s having a big incumbent that is hated. Having a QuickBooks for Xero to go against. Having an Infusionsoft for Drip to go against. Having—

Craig: Having Libsyn for Castos to go against.

Rob: Yes. Where people are, I use this thing and the incumbent is such a pain in the ass. It’s like, we are not that. We are that that doesn’t suck. That’s your headline. I hear this with, I think Intercom. Intercom is a good product and offers all kinds of stuff, but what they’ve done with their pricing, they’ve gone so far up market that I’m still shocked that no one has come in underneath them. 

I hear people complaining about Intercom and yet, where is that? Where’s that upstart who’s going to come in and take out the, not the bottom end of the market because that sounds like your bottom feeding but I do think there’s room in the spaces where the money’s in the enterprise and they just keep going up, up, up, up, and it leaves room for you to sneak in as a starter founder.

Craig: I got just two things to piggyback there. One, I think Userlist has a really good chance of capitalizing on Intercom’s move up market. They’re a great tool and add a lot of really cool features that are addressing the needs that people who would use Intercom have. I think that that’s one to watch out for. I agree, I think it’s an enormous opportunity. 

A recommendation for resources on positioning is a podcast called Everyone Hates Marketers. Louis there is a friend and a customer of ours. I’ve known him for a year, but just really strongly positioned himself and talks about this a lot and is just a really good resource for folks who want to say, how do I stand out in this market? He definitely does sink in.

Rob: I’ve been on that show. I was on it a few years ago. It was cool. Last question for the day. When do you buy versus build tools that you use in your business? I’m thinking this one is a softball, but I think we’re going to agree. When do you folks at Castos build versus buy tools?

Craig: We almost never built. Do the math on it. Josh Pigford had a great blog post about this from Baremetrics. It just almost never makes sense to build it in-house, unless it is really integral to the day-to-day customer experience of your application. I’m talking just SaaS specifically, but what I wouldn’t do is take people off of my platform onto the Stripe-hosted checkout page to check out or to cancel their subscriptions. I want that in-house. That’s a really specific example. Basically, anything else you use to run your business should integrate or Zapier-connect to what you’re doing and you shouldn’t have to build any of it.

Rob: Yup. That’s pretty much it. Whenever I used to hear people say we’ll just build this in-house. They’ll be talking to potential customers with whatever SaaS I happen to be part of or advising, or whatever, it’s like they have no idea. Developers think you can build… SavvyCal, it’s just this link. I’ll build Drip in a week. That’s what we think until you get to the DevOps and the security and the spam. It’s endless. It’s really hard. Build Castos in a week. I can just host some flat files on the server. Yeah, but then there’s no CDN. Okay, so now I’m going to have a CDN. Okay, but no you don’t have X, Y, Z.

It’s just this endless thing. There’s a reason that you have a team of 14 people working on a product that some developers somewhere thinks they can build in a weekend. The same thing, if you want to get onboarding stuff to Appcues-type stuff into your SaaS. 

At Drip when we were going to do this, one of our developers said why don’t we just build it in-house? I’m like, because then we have to maintain that product. You have to make it, so marketing and customer success can come in and update it. Do you want to build and manage a WYSIWYG editor? Then they report bugs and they go to you? Because I don’t want to pull you off the core product that’s making us millions of dollars to maintain this other thing that we can pay $200 a month, $500 a month. It’s crazy cheap compared to your salary

Also I think as developers, as a recovering developer myself, we just think we can hack everything together. It’s usually not the right choice. Usually, the right choice is building things that provide value to your end user. 

Here’s when we used to have to build everything was in 2005–2007. You’re building a SaaS app. There was no Zapier. There was no Stripe. There was no Appcues. All the stuff we rely on today is great that we have this ecosystem. I know it’s expensive and I know we get subscription fatigue. I’m sure you’re like $10,000 a month in a $50 a month app.

Craig: Why is my American Express bill four pages long?

Rob: Exactly, and it’s because of that. But you know what? If you didn’t have that, you would need another developer or two to build and maintain crappier versions of all of that just for you. We live in an amazing time I think.

Craig: I think that the next level topic with this is leverage of your time. Just paying Appcues $800 a month lets you not worry about it and focus on other things. The kind of rotation you’re talking about is not maintaining this thing but letting you, your developers, your team, and your support folks all focus on really important things that move the ball forward in a meaningful way, because it’s worth way more than that $800 a month to those folks.

Rob: Yes indeed, sir. Thanks again for joining me on the show today.

Craig: Good time. Thanks Rob.

Rob: If folks want to keep up with you, you are @TheCraigHewitt on Twitter. I’d like to recommend your audience a podcast. I know Matt’s doing a lot of the hosting there now, but audience, it’s legit. If folks are into podcasting and want to hear about the creative process, episodes come out every week. I’d encourage you to go check that out. And of course castos.com, but that almost goes without saying. Thanks again, Craig.

Craig: Thanks Rob.

Rob: If you have not checked out Craig’s podcasts, they are two shows that I listen to every week, Rogue Startups and Seeking Scale. I recommend you check them out. Thanks for joining me every week on the show. We are approaching episode 600 and I believe next month, we’ll be 12 years of Startups For The Rest Of Us. I’ll be back in your ears again next Tuesday morning.

Rob: In this week’s episode of Startups For the Rest of Us, I talk with Jason Buckingham about how he made essentially 70 cold calls to find a startup idea. Jason was a developer and then a development manager at Microsoft when he decided I want to build a software product, I want to build a SaaS. He didn’t have any idea how to do that or really what idea to build.

You’re going to hear the story of how he just grounded out, just put in the hard work, and eventually found an idea that became Senior Place, which is now a successful SaaS team size of four. You’ll hear us talk about how they got into TinySeed back in 2020 and then again in 2021. You’ll have to listen to find out how that all panned out.

It’s a great story about focus and about, perhaps, just putting in the time and doing the work that it took to get it done realizing that it might be harder than he wanted it to be, or it might take more hours than he wanted it to, but being really focused on, I’m going to succeed, I’m going to brute force this thing until it works. With that, let’s dive in to my conversation with Jason from Senior Place. Jason, welcome to the show.

Jason: Hey. Nice to join you, Rob.

Rob: Absolutely, man. You are the co-founder of Senior Place and your H1 is Placement Software Designed Specifically for You! Okay, let me paint a picture. You know how there are realtors, Jason? I’m not telling you this, I’m trying to tell this for the users or the listeners of this podcast. There are realtors and there’s software for realtors to be able to help manage someone buying a house. You are software for these placement firms that might help say, my elderly mother, find a senior living facility, and these are like realtors or brokers. Is that right? Am I summarizing this right?

Jason: Yeah, that’s exactly right. They’re the equivalent of realtors but for the elderly. Instead of someone buying a house, they’re helping people who are going to move into an assisted living community. They do the same job as a realtor would do. The compensation is somewhat similar. They get paid by the assisted living facility. We build software to make that process a lot easier for them to manage the communities and the clients’ needs because there’s a lot that needs to be matched from side to side.

Rob: Got it. You have a handwritten font on your website, Placement Software Designed Specifically for You. People go to seniorplace.io, they can witness this handwritten font. That’s an unusual approach for a SaaS app. Did you design this out yourself?

Jason: Absolutely. I’m going to take ownership of that as well. A big part of that is the demographic of our customers. We are not selling to hip trendy 20-year-olds. Our average customer is most of them are female, most of them are in their 50s or 60s. We do have a number of male-owned companies as well, but that seems to have worked pretty well for getting customers so far.

Rob: That’s why I wanted to call it out. There are several exceptions to rules that you and Senior Place have. If you look at the website design, it does not compare to a lot of MicroConf companies or a lot of TinySeed companies, but those companies are selling to designers, developers, picky UX people, and Senior Place is not.

If you look at the screenshots for software, if you look at, again, just the marketing side, someone might turn up their nose and say, oh my gosh, this is not the amazing Squarespace site that I might be able to get from blah blah blah. But it works because you’re in a space where that’s okay.

Jason: I think it comes down to knowing your customer and knowing what’s important to them. I don’t want to disrespect our technically skilled customers, but we do have a lot of customers who are very technically challenged. I can probably share a story here that I maybe shouldn’t if it gets listened to.

I’ve done Zoom calls where I’m screen sharing and some of our customers on the call are trying to click on my screen share saying I can’t edit the box. I’m like, are you on your page or you on the screenshare? We just have customers who fall into that category. They really appreciate simplicity. They really appreciate something that feels comfortable. We know that because we talk to our customers.

When we get into our story later about how we started the company, it’s all been conversations with our customers. I actually just had a call with one of our customers this morning who’s one of our original for-users. Talking through with them again on the phone, it’s just really great to connect directly with them and hear in their own words what they like and what they don’t like.

By and large, we’ve had customers tell us, me and computers we’re not even acquainted, but your software is so easy to use it’s meeting my needs perfectly. That’s really what we’re targeting. We’re not targeting the cool, hip audience, we’re targeting our demographic and what they need.

Rob: Real software for real people who pay us real money. It’s a tool. People don’t want software, they want a result. In your case, that’s making it easier to track and place folks. Two episodes ago, I interviewed Michele Hansen. She wrote a book about getting really good at customer interviews.

That’s a big theme of your story—your and your co-founder story—is, we’ll get into it in a second, but the entire idea came out of a bunch of cold emails and cold calls, which is unique. I’ve heard this approach espoused in certain—there were some courses five, eight years ago by a SaaS founder who has basically built an info product course about, you can just cold call and find ideas. I remember, for most people, it didn’t work.

I’m going to pull up the State of Independent SaaS report, which we do with MicroConf each year, and we ask people, which of the categories below best describes how you develop the idea for your product or company? And 45% of respondents said it was a specific problem I was experiencing and another 22% was a problem my customers or my clients were experiencing. Right there, that’s 2/3 of the results were my problem or my customer and client’s problem. Another 13% was an experience at my day job and another 11% was a problem a friend or relative was experiencing.

I think we’re over 90% at that point and we haven’t gotten to what you did, which is the next one, which is 8% of folks who responded said it was research. Then it was 0.2% purchased it and there was other. I’ve heard the idea of, you go to Facebook groups, you do the cold calls, you talk to attorneys, or you talk to real estate agents, you just find a problem, and then you solve it.

I’ve always espoused absolutely to find a problem, but finding a problem cold just by conversations is hard to make work, it often doesn’t, and it’s a ton of work to do it. With that, I want to tee you up, your story is exactly this and you made it work. Let’s flashback, spring of 2016, you’re working at Microsoft, and you’re looking for a startup idea. Take us from there.

Jason: I was at Microsoft. I loved Microsoft. I was there for almost 15 years. It was a great company, but I didn’t want to stay in corporate America forever. I am not creative enough to have a great idea. I didn’t have customers that I knew had problems. I went down that path that 8% of people did with research.

For me, I looked at my own past. When I was a kid, my great-grandmother lived near us. She was in her 90s. She needed to move into a nursing home. It was just this emotionally traumatic event for our extended family. Maybe this ties into a relative thing, but this was 20+, 30 years ago.

My grandma put her in the nursing home. She felt super guilty and then in 2016, I was thinking what if we had a way to deal with that? I know that there are home care companies that send care providers directly to your home and care for your loved one. This would have been perfect for great-grandma and grandma.

I started cold emailing some home care owners that I just found their website online, I searched for home care and whatever city, and then I sent them an email and said, hey, my name is Jason, I’m a software entrepreneur. I’m working at Microsoft right now, sure, I’m an entrepreneur. I said that in the email and that I want to find ways to help their companies with whatever their software challenges might be. 

Would you have 15 minutes to chat just about yourself, what you do day-to-day? I got a really high response rate on those emails saying, sure, because I was only asking for 15 minutes, I wasn’t asking for much. I was asking to talk about them and every email I sent was personalized to them.

With those three qualities of each of my messages, people said, yeah, let’s talk. On every call, 15 minutes came and went, and I was like, okay, I want to respect your time, no, let’s keep talking because I was talking about them. I didn’t talk about myself at all on those calls. I just said, hey, I just want to learn what you do, I want to see if there are ways I can build software that would help you.

It was super intimidating when I first started doing this because how are they going to receive me? I don’t like salespeople. But I did send the cold email first, they did schedule the meeting with me, and so I persevered. I think the thing that made it work for me is I kept going. I did 35 calls with the home care industry and person after person after person said, we don’t have this problem. We actually have this software we just bought that is working really well. Next company, oh, we’re using that software, we just switched to them last month. Next person, oh, we’re switching that software next week.

Somebody was already solving the problem and they had $50 or $75 million of VC money.  They had a big head start with a lot of money. I just kept going. I don’t give up easily, and on call 35, somebody said, well, we do home care and we do senior placement. I was like, I’ve never heard of senior placement, what is that? That’s where I went on the next steps.

They told me, we really need help with software in that space. I said, does anybody else do that? Are you the only one? I’ve never heard of this. Oh, no, lots of people and it’s a really rapidly growing industry. We went and called 30–40 more placement agencies from around the country. This was something I was doing.

I’m based in Seattle. At 6:00 AM, I’d get up and have a call at 7:00 AM with somebody on the East Coast so I could do that, then still get to work, and do my day job. I was doing those calls three or four days a week for a couple of months.

Rob: That’s the hustle. I get emails from folks who are like, I have a day job and I’m tired when I get home from it, and what should I do to work around it? It sounds like you just didn’t give a crap that you were tired and working around. It is just what you were going to do. Is that an innate motivation? Were you raised with that motivation or were you so hungry for this that you’re like, I have to do my own thing and I’m just going to brute force it until it works?

Jason: I think there are a couple of things. One, I was hungry for it. I feel like I have entrepreneurial desires. I want to run my own company, I want to figure out the problems, I want to wear all the hats, and do all the things. One, I was hungry for it. Two, I don’t give up easily.

A neat story from my grandfather. He was a three-star general in the Air Force. His dad left him. He was raised by a single mom, and this was in the ’30s and ’40s. He wanted to get an appointment to West Point. To get in, you have to have a congressman sign your paperwork and get you in. He ended up going to the congressman’s office saying, I want to meet with this congressman in his hometown. The congressman’s secretary or whoever it was at that time said, no, he’s busy. He said, well, I’ll wait.

He waited all day, Monday, came back on Tuesday. The secretary said, what do you want? I’m here for the same thing, wait all day Tuesday, all day Wednesday. Sometime on Thursday afternoon, the congressman’s like, who’s that guy who has been sitting there all four days this week? I think just seeing that when you persevere, when you keep going, and when you don’t quit, you’ll eventually find success. That’s how my parents raised me and that’s what we did when we were trying to start Senior Place.

Rob: That’s that. I often say hard work, luck, and skill are the three things you need to achieve some success. It sounds like hard work was a big part of these early days. You may have had some luck because you had 35 calls and one of them finally said, oh, senior placement. It’s like, oh, you could say, yeah, I got lucky with that. Did you or did you just work hard enough that you made your own luck, I guess, in that sense?

Jason: Yeah, I think both are necessary, as you said.

Rob: Then you have all these calls with what? You did another 35–40 calls with senior placement agencies and they’re saying, we have this same problem. Where did you go from there? Because often, there’s conventional wisdom and there’s unconventional wisdom of like, do you go in the basement and build it? There are mockups? There are presale conversations.

Walk us through your thought process there, and really, how did you decide on what to do next? Were you listening to podcasts, reading blogs, and you’ve read Lean Startup? What was it that made you say, oh, this is how we’re going to proceed, this is the right way?

Jason: After 35 calls of the home care industry hearing nothing good, and then switching over to the placement industry and hearing lots of people say, we have this problem, there were different takes on the problem, but everybody identified the problem that they couldn’t keep track of their clients and their communities to match them up and all the needs that they had. I was taking detailed notes on all of those calls, so mostly handwritten notes as I was listening on the phone and then I kind of aggregated those notes.

After 35 calls, my friend JD who also happened to work at Microsoft at the time. We actually didn’t know each other through Microsoft at all. We just lived in the same community and we’re friends that way. He’s like, hey, I want to start something too. JD is an outstanding developer. I came from a software developer background as well. But we thought it’d be great to have two of us building the system and managing all the things you need when you start a company.

We partnered in, I guess, November 2016 and officially formed the company. We had a good idea that we were going to have customers, but I also didn’t want to just move forward. It’s hard to judge. Are people just telling you they have a problem and they need it? Are they saying I’m going to pay for it but maybe they won’t? I felt really good, but not quite good enough.

I reached out to some of the customers who had been like, keep me posted if you do anything. There were some who were really eager. I was like, I tell you what, would you be willing to prepay for three months of Senior Place? We’re going to set the prices here, and in exchange, if you give us this check today before we even start building it, we’ll give you a 20% lifetime discount? I had somebody.

We actually were able to meet with someone locally in person at a coffee shop. She brought her two employees with her. We were demoing mock-ups on just a tablet and showing like, this is what we’ve drawn up, and like, yes, this is what we want. She took out her checkbook and gave us a check. We walked out of that coffee shop with a physical paper check and we’re like, wow, we just got paid for the software. We started a company.

It was just an incredible feeling. We ended up doing that with five people. Once we got to five we’re like we don’t need to pre-sell and give any more discounts. I think we feel good. We then hit the coding hard, and January, February was just heads down 40 hours a week at Microsoft, 30 hours a week writing code, weekends, and whatever else. It was craziness because I always wanted to be a good worker at my day job. I don’t want to skimp out and bail on them because they’re paying me there, even though I’m trying to reach this other goal on the side. It was a challenging time.

Rob: You didn’t need the money. You didn’t pre-sell because you needed the money. You wanted the commitment, right? You wanted to know they had skin in the game and that if you and JD spent two or three months building it, that at least they were going to try it out.

Jason: Absolutely. We didn’t need the money at all. It was absolutely about the commitment. I wasn’t going to put in hundreds of hours between JD and me over two to three months, 30 hours a week. You can do the math. I wasn’t going to put in that many hours. We had already put in a lot of hours, but I’m willing to cut my losses if there’s not an idea. But I wanted to see the skin in the game when they did that. I’m like, if they pay before we build it, I think other people will pay after we build it.

Rob: Right. That’s a really good way to think about it. During this time, the two of you were working at Microsoft. Are you married? Did you have children? Because a lot of folks who listen to this are in one of those positions. I was too. While I was building my businesses, we had a young son who was born. It was 2006 now. That was right at the time that I started ramping up nights and weekend stuff, so I know the struggles of working around a family.

Jason: Yeah. I think at that point, JD already had three kids, my business partner. My wife and I, at the time, had two kids and my wife was pregnant with number three. Even when I was doing these calls, one of the calls that I did, I had gotten networked with somebody who ran a larger placement agency. We had talked to a lot of small-time shops and I wanted to talk to somebody bigger, and somebody referred us to him specifically like this is going to be a great call to get some insights and really confirm where we’re going.

My wife had our baby four weeks early. This call that I thought I was scheduling well before the baby was going to come, I did when our third was three days old. I didn’t want to cancel the call because this guy took me a month to get on the calendar. Yeah, we had kids. I have four now. We had a fourth about three years ago.

It’s been managing and I take family super seriously being part of my family, not ignoring them, making sure my kids don’t grow up. I’m doing this so I can spend more time with my family. I don’t want them to grow up and be like, well, daddy was never there. I don’t even know daddy now that he finally has been successful and I’m a teenager.

My kids are all 10 and under right now. I want to be spending time with them. A lot of this was, I would work at Microsoft during the day. In the evening, it was dinner at the table every night with the family, helping get the kids ready for bed, spend a half-hour or an hour talking with my wife catching up on her day, stayed in touch with her, then it was an hour, two, or three of coding until 2:00 AM often, and then calls at 8:00 AM or so.

Microsoft was flexible. I could often get into work at like 9:30 AM, so if I had calls maybe a couple of times a week, once we started coding, I was trying to start selling some more. It was just juggling all of those priorities. I wasn’t playing video games. I wasn’t watching TV like people are talking about the TV shows. I don’t know what those are. I wasn’t going to the movie theater.

For me, it was the priorities. It was family. It was keeping my job, not getting fired there, and making sure I’m doing a good job, and then moving towards the next thing that I wanted to be doing, which was Senior Place in the startup.

Rob: I’m guessing you knew it wasn’t permanent. You weren’t going to work that schedule for 10 years. It was, I’m going to work it for a few months until I turn a corner. Was that what was in your head?

Jason: That was exactly what’s in our head. We experimented different times with bringing on developers onto our team. JD and I, both being software developers ourselves, are probably pickier than an average entrepreneur maybe. I know a lot of entrepreneurs are developers.

We probably made some mistakes in not hiring earlier because, again, we had the money. We could fund them out of our own paychecks, but we didn’t like the quality of what we got. So we did a lot more work on our own than we probably needed to. That led to us staying at our day jobs longer while doing this at the same time than would have been ideal. That was the path we took and we’re just both super thankful that we are now full time only on our business that was a side business now. It’s the only thing.

Rob: It’s the focus, yeah. How big is your team now? Is it still just the two of you? Do you have anybody else helping you out?

Jason: Yeah. There are four of us now. We have another developer. I guess he’s still, technically, a 1099 contractor, but he’s working for us and only for us. Then we’ve got somebody doing support and onboarding. That’s been one of our challenges.

As we were building Senior Place, we cut some corners on administrative tools for our customers because we can just do that ourselves. Customers don’t need to add a user account very often. They can email us and we can take one minute to do that. If we build it, we have to spend two or three weeks building it right. Instead, let’s build other features.

We have not built all the things. We still have some manual tasks to do, but that helped us get to an MVP. Now we’re trying to invest in some of those other things that will save us more time and/or hire people that can do those tasks instead of us.

Rob: How do you describe the stage you’re at? Some people say we have this much MRR, other people say, we have this many hundred customers, some people say, we’re a team of four and we’re basically running at breakeven. Any of those, give us an idea of where you’re at.

Jason: We joined with TinySeed about nine months ago, and that allowed us to bridge the gap to pay ourselves. We definitely took a pay cut coming from Microsoft, but we are probably taking a little bit more money than maybe a lot of startup founders are, just since we both have families, mortgages, and such.

We’re running at a slight loss monthly right now. We’re going to be breakeven within two months, probably. We’ve got a lot of other partnerships coming down the line that could cause us to double or triple our MRR pretty fast, so we’re pretty excited about the potential of those.

Rob: I’m pretty excited about the potential of those. I didn’t mention at the top, but you’re part of TinySeed batch three, I believe. You’re the spring 2022 batch.

Jason: 2021.

Rob: 2021. Yes, sorry. There’s a funny story around that about how you were going to be part of the spring 2020 batch, but then COVID hit. We’ll get to that a little later. I want to ask this question that I think a lot of people are thinking about. How did you and JD get your spouses on board with this journey? Because it was a sacrifice for you, but it was a sacrifice for them too. Did you talk to your spouse in advance, your wife, and say, this is going to be tough, but it can change our life. I want to do it, it’s important to me, or how did that go down?

Jason: We did talk to our wives. If we were talking with JD on this call as well, I’m sure he could tell you lots of conversations that he and his wife have had. My wife and I talked about it before we started. It’s pretty easy to get your wife on board when I’m not spending the evenings and weekends yet. Hey, I’m going to do this, this is what it means. Oh, sure, that sounds great, go for it, honey. And then having to continue to check-in, how are we doing as we keep going? It’s been this many hours, it’s been this long.

We took a weekend away from the kids where we got my in-laws to watch the kids. It’s just my wife and I getting three or four days, a long weekend together to sync up. I think prioritizing your spouse to get date nights if you have kids. If you don’t have kids, it’s easier to get date nights. You just have to be intentional about that. The date is getting away from your work. For us, it’s getting away from work and kids. That’s also been harder with getting babysitters during COVID, but prioritizing that. 

Both of our spouses are really supportive. My wife is very supportive. I think it helps that, as I mentioned earlier, we have that hour every evening after we get the kids to bed where we’re talking. She feels like she’s got a connection to me and me to her. All of those things helped her continue to be on board. She knows where we’re at. Yeah, lots of things like that.

Rob: All of those things you called out are super insightful. I think a lot of early entrepreneurs miss them. I know that I missed it. Rolling back 16 years as I was working stuff nights and weekends, I remember saying, all right, I’m handling the day job or the consultant, whatever I was doing. I’m spending time with the kid, our one-year-old or two-year-old, but I forgot to be intentional about spending time with Sherry. Then eventually, I realized that is way important.

I need to balance these three things plus the startup. I can’t overlook that. In fact, Sherry and I recorded an episode of the Zen Founder podcast, episode 45, Onboarding Your Spouse, where we talked about this whole process. This was years ago. It’s probably from 2013, but I think it still holds true and it touches on a lot of the things you just said, very specifically about that.

You guys wind up launching in 2017, it sounds like spring of 2017. Then you and JD applied to TinySeed. It was the spring 2020 batch. I think we ran it in November of 2019 or something. So there are a couple of years there. Two and a half or three years have gone by and the two of you were still working day jobs. Is that because Senior Place didn’t grow fast enough to the point where it could support both of you? I guess to piggyback on that is, how was that for the two of you to then be working on this side project for those two and a half years?

Jason: There were certainly ebbs and flows in terms of how much work we were putting in. We were putting in a minimum of 15 hours every week. There were some weeks where we’re putting in 30–40 hours a week. We had to manage some of the burnout and it was because we weren’t growing super quickly.

We weren’t growing super quickly because we were trying to balance which features do we need to build? Okay, well, we’re both spending time writing code. Who’s doing the marketing? Okay, well, I’m trying to do marketing, but now I’m not coding. Now we’ve onboarded these customers, we’ve got 10 customers now. Five of them are like, hey, I can’t use it because of X, Y, and Z. So now we have to go back to that, and then we’re like, well, we don’t want to try to add more customers if they’re all going to quit. 

It was this slow ratcheting up of trying to get customers while meeting the customers’ critical needs. One thing we didn’t realize about this industry is our customers. Even with those 35 one-hour calls, I didn’t realize how unique the customers’ needs were. We’ve had to do a lot of customization.

I think anytime you can stay away from that, you’re going to be a lot better off for it. That has slowed us down because, oh, this customer says it has to be this way, this customer says it has to be that way. They want some core stuff, but they won’t use it if we don’t have both of those things. We’re kind of building two things.

There have been some challenges with a particular market we’re in that has inhibited our growth early on. We’re now turning the corner past those things. We built those different customizations, but yeah, we just kept on going, plugging away, trying to balance, okay, are we ready to do a marketing push? Because if we get five more customers, I don’t think we can even handle them right now. It was continually that process.

Rob: I meant to ask you, you had the five pre-purchases who wrote you checks in essence or send you money, and then you had the other, let’s say, 30 calls that you had done. Maybe they were not as warm, hadn’t given you money, but you at least had the list. When you launched, how did the five pan out? Did they all become customers? Then with the other 30, what did it look like after a couple of months?

Jason: When we launched, actually, one of the five didn’t even join us at that point. She said she was actually pivoting her business. She moved to a totally different business and didn’t need our software. The other four joined and this was five years ago. They’ve all been with us. All four of them have been with us since the beginning. They haven’t left.

Rob: You have an incredible business in that way. I talk about customer pain versus competitor pain, where if I started an email service provider today, I’m going to have competitor pain because there are 500 of them. We know it’s a big proven market. We know it’s not that hard to get customers, but there are a lot of competitors.

Customer pain is usually when you have maybe less technical customers. They’re not exactly searching for this online, so it’s just a grind. It’s harder to get them. It’s harder to get them on board, it’s harder to get them successful. But usually, with customer pain, once you have them, the churn is zero. You have an incredible business in that respect.

Jason: Yeah, we’ve managed to have extremely low churn. We haven’t lost a customer to a competitor in two or three years. We’re a CRM system. We’re a niche-based CRM system. Theoretically, every other CRM is a competitor.

Two or three years ago, we lost customers to other CRMs that had bells and whistles that we couldn’t build in yet. We’d built niche features, but we hadn’t built some of the bells and whistles. We still are adding more of those. We’ve just focused on what are the things our customers cannot do outside of our software without us and then built those things first. We do have very low churn, but it was still family, plus day job, plus side hustle meant slow progress. It meant, perseverance was absolutely required.

Rob: I have been there and a lot of people listening to this have been there or are currently there in that exact same position. It’s just such a common story when you’re trying to bootstrap something on the side.

When you applied to TinySeed the first time, we accepted you. You had traction, we said, we think this is a great business, let’s do it. I believe we went all the way through due diligence, signed paperwork, wired money. Is that accurate?

Jason: Yup.

Rob: And you gave notice at work because you’re like, I’m home free, I’m working full time. This is February of 2020. What happened in March of 2020, Jason?

Jason: Everyone knows the COVID story and the COVID time, I don’t think any of us will forget March of 2020. It was when work from work became work from home for the last couple of years. The TinySeed money was coming in April or so. We actually got it wired in late March maybe.

I was a manager at Microsoft and I had several direct reports. I didn’t want to suddenly bail on my manager. They have been really good to me. I liked the company. I wanted to treat them well. So I gave a two-month notice period. I was like, hey, I’m going to be transitioning. I just want to help find a replacement, train my replacement, and do all of that.

I talked to my manager in February, then COVID hit early March, and then our customers who serve the elderly in an industry that I thought was recession-proof because, of course, people still get old even during the recession. People still need care even during a recession. We’re totally golden. All of a sudden, people didn’t want to put their loved ones in assisted living. They wanted them to stay at home and they were now working from home.

Our customers were not having any business. We lost five customers in one week at the end of March of 2020. We hadn’t lost five customers ever combined in the previous three years total. We’re looking at this.

The TinySeed money came in that same week that we lost five customers. JD and I are talking like, what do we do? How much runway do we have? TinySeed money is absolutely outstanding, but we have just lost 20% of our revenue, and are we going to get notice from all the other customers next month? I went back to my manager. We talked to Rob and said, hey, what are our options here?

I went back to my manager. Can I ungive notice, please? My manager said, well, we didn’t want you to leave anyway, we haven’t found someone to replace you yet. I stayed at Microsoft, we gave the money back. I think I cried the day that I wired it back. This has been three years ready to be done.

We stayed one more year and we actually grew quite substantially in 2020 after the pandemic leveled out. I think we roughly doubled in 2020. We went back to Rob, TinySeed, Einar and said, hey, can we apply again? Let’s talk again. We’re ready. We’ve been growing.

Rob: Right, and that was the thing. COVID started changing everything in the midst of due diligence, but we had made a commitment to invest. So we said, it’s not like we’re going to back out. We hand shook on that deal via email. We sent the money and if the two of you wanted to keep going, we were all for it, but you were worried like, is it six months, a year, or two years? We have day jobs that are really great.

The fact that you made that decision and you basically said, look, we don’t want to give this money back, but we are going to unravel this thing. Can we handshake that assuming things are better in a year next time you run applications that we can move forward? We were like, yeah.

This is the only time that’s happened to us. There’s always these weird edge cases, but it was just like crazy times and we’re like, yeah, let’s do this. Frankly, even if you hadn’t grown during that time, if it was still a solid business and there was recovery underway, which there was by the time the next batch went, it made total sense. That’s what it was. It wasn’t until it was another year of you guys grinding.

Jason: It was heartbreaking.

Rob: I’m sure it was, man. That was April, May of 2021, which is just eight or nine months ago, but that’s when you received the funding. How did that feel, the final day? I’m sure that was four years in the making of being able to…

Jason: It was awesome. The hard part is I had worked at Microsoft for 15 years and with COVID, there’s no real goodbye. It’s just like, see you later, I’m out. I think we had a Microsoft Team goodbye call with some of my co-workers, but certainly, anyone who had worked at Microsoft for a while and had built relationships, there used to be a goodbye lunch and all of that. Some of that wasn’t there, but being full time at my own company now and having the feeling of walking out the door virtually was still an incredible feeling.

Rob: Yeah, I remember that. I still remember that feeling, how I felt years ago. Thanks for coming on and telling your story, man. I love the elements of it that are a little bit unpredictable. I love the elements of it that are a little bit outside the standard. We get into this cold calling to find an idea, and to hear it actually working and that you have a business that is doing quite well is really cool for folks to hear.

If people want to keep up with you, they want to see what you’re working on, you’re at seniorplace.io. You said, if folks had further additional questions, they could contact you directly. Your email is jason@seniorplace.io. Thanks for coming on the show, man.

Jason: Thanks so much for having me, Rob. Great catching up with you again.

Rob: Thanks again to Jason for coming on the show and thank you for listening every week. I enjoy being on the microphone. As long as you keep listening, I’ll keep recording. I’ll be back in your ears again next Tuesday morning.

Rob: You’ve tuned in to Startups for the Rest of Us. We are approaching episode 600 here in another 12 episodes or so, and today’s episode is really good. I really enjoyed this conversation with Courtland Allen. He and I basically wander through topics that are relevant to bootstrappers, indie hackers, non-bootstrappers, and mostly bootstrappers. We talk about things ranging from inside baseball and podcast production, to talking about struggles with motivation and depression, to whether it’s easier to bootstrap today, what it looked like 10 years ago. At the end, we talk about Basecamp. We just covered a lot of things. 

I did a little ask on Twitter of what topics we should cover, and of course, we got 30 topics or something, so we couldn’t possibly cover all of them. But I am bookmarking that tweet for future episodes because I think some of the topics and questions were really interesting. 

Before we dive into our conversation, I wanted to let you know that there are just a few more days in the TinySeed application process. If you are a bootstrapped or mostly bootstrapped SaaS founder, you’re doing at least $500 a month, and you’re interested in a yearlong mentorship advice community program, as well as a little bit of funding, just enough funding, the right amount of funding for a bootstrapper, you should head to tinyseed.com/apply and find out more. 

The application process is pretty seamless. It’s 15, 20 minutes. Most people, if you know your numbers, it’s not that arduous. You’d be following in the footsteps of some pretty great SaaS companies that have been coming through our ranks. We are running batches both in the Americas time zones—North and South America, as well as the European time zones—so Europe, Middle East, and Africa. Tinyseed.com/apply if you’re interested. And with that, let’s dive into our conversation

I’m Rob Walling, your Courtland Allen. We’re putting this on both of our feeds. 

Courtland: We are.

Rob: I can’t just do the Startups for the Rest of Us intro because people will be like, wait a minute, this is on the Indie Hacker’s feed. So I think we’re coming out a day apart, but I’m excited to sit down with you, man.

Courtland: Me too. You’re always one of my favorite people to chat with in podcast form and in real life too. You asked a question on Twitter, what should we talk about, and we got like a million different answers plus we had a list of stuff we want to talk about and so maybe we’ll go long this time.

Rob: I think we can. I’m excited about it. Likewise too. I appreciate the compliment. I certainly feel the same way. I really look forward to you and I sitting down because I feel like we have enough shared views and enough shared worldviews of bootstrapping and indie hacking that it makes sense, but the overlap is not a complete circle like a Venn diagram that’s just a circle. I feel like I learn from you and I expand my thinking when we talk.

Courtland: It’s funny you say that. I listened to your episode on My First Million, and I think near the end of the episode, you were giving startup ideas and Sam Parr I think was the one hosting that particular one. He’s a funny guy because he’s so disagreeable. No matter what you say he’ll just come out and be like, I think this is absolutely untrue to say the exact opposite, and he’s not afraid of looking dumb and being wrong or whatever. That is really entertaining. I think you and I agree on a lot, so we probably won’t have that kind of talk, but agreement is also cool.

Rob: Oh yes, we will because I’m going to disagree. Now I’m going to make me disagree with everything you say just to do it. Well, the first thing I’m going to say is I just made an offer to a producer who’s going to really be heading up all the back office stuff for Startups for the Rest of Us, the MicroConf podcast, and MicroConf YouTube. Total inside baseball from one podcast to another, but do you still do a lot of the work? I don’t imagine you do audio editing, but are you scheduling guests, putting stuff into WordPress, writing show notes, or have you been able to like get that stuff off your plate?

Courtland: Off my plate. The best hire I’ve ever made was—I call her my podcast boss. Arie was a producer for Mixergy. She still is a producer for Mixergy, but she does the Indie Hackers podcast now. I just have her do literally everything that she possibly can that I don’t feel like I need to be involved in.

I like being involved in the guest selection—who’s going to come on, who do I want to talk to. Because if someone else is choosing who I talk to, I don’t know. Maybe I could outsource that, but right now, I like choosing who I want to talk to and I like helping prepare. But what’s cool about Arie is I have her come on and even these things that I want to do, we’ll be on a Zoom call where she’s sitting there watching me work and offering suggestions. I’m not even like doing that alone. She’s kind of my podcast boss. She holds my feet to the fire. She makes sure I work on it a few hours a week, and she gives me helpful feedback while I’m working on it. 

Then I sit down, press record, talk to my guest, press stop at the end of the conversation, we chat a little bit, and then I do nothing else. I don’t title the episode, I don’t describe the episode, I don’t tweet about it, I don’t release it. I’m on to the next thing. It’s such a breath of fresh air because I think a lot of podcasts, people churn. Most podcasts don’t last for much longer than a few episodes, and I think it’s because people get bogged down by all this extra work that they don’t really enjoy as much as they enjoy the conversations themselves.

Rob: All right. That’s awesome, man. I’m happy for you and I’m happy for me that next week, I’ll be in a similar situation. I mean, to be fair, I’m probably 75% or 80% of the way to where you are, but I’ve just piecemealed it together with a part-time freelancer who does the show notes, an editor who does this and that, then there are some gaps there as well, and I am the fallback. With MicroConf stuff, Producer Xander is a fallback. We’re bringing someone in to really backstop that, finally. I mean, it should have been done last year or years ago, to be honest, but it’s just one of those things that you do the same thing for too long and you don’t think about how it should change.

Courtland: Right. You get used to it. Like you said, there are these gaps. It’s stressful having to be the glue that glues all these things together to fill the gaps because then it’s almost in a way as if everything is a gap. You still have to worry about every single thing, every single part of the process, and it’s also stressful to hire somebody and just trust them to do everything. Because they’re not going to be as good at you as you at some things. They’re not going to have your particular eye for certain things.

But the cool thing is that there’ll be good stuff that you weren’t good at if you make a good hire, and they’ll improve your show in ways that you didn’t really anticipate. I think a lot of it is just learning to let go, have someone else do those things for you, see what comes out, and go with it.

Rob: Yeah, and I’ve always been able to let go when building SaaS companies, it’s like I can let go of customer support. I was able to let go of software development. I can let go of customer success, sales, and on and on and on. Letting go of creative stuff for me like writing and podcasting, that stuff’s a lot harder for me because there’s so much subtlety to it. It’s less of a here’s a job description. It’s more like, you kind of just got to do it and make it good and that’s hard, right?

Courtland: There is a popular indie hacker—I won’t say who it is—he has more than 40,000 followers on Twitter. His Twitter account is entirely automated. He never tweets. He doesn’t even know what he’s tweeting. There’s a team of people who tweet for him, and his Twitter account’s fire. It’s awesome. He tweets several times a day, people engage, and some of the tweets are really personal. But he’s like the ultimate in being comfortable, I guess, letting go of the creative element. I can’t imagine doing that.

Rob: Wow. Me either. That’s awesome, though. Yeah, I wanted to ask you, so Indie Hackers went invite-only, is that right about five, six months ago?

Courtland: Yeah.

Rob: I don’t know if you’ve talked about that publicly, but I’m just wondering, what was around that decision? Does that just come with the growth of a community?

Courtland: I mean, it was very simple, spam was out of control. I have been fighting spammers from like day two of the forum for like five years, and they’re so good. They’re not just like people making little bots. They are actual human beings, sitting in offices somewhere on the other side of the world getting paid to spam websites and not caring at all. If you put up obstacles, they will figure out what the obstacle is and try to get around it. 

At some point last summer, I think we had 6000 or 7000 people join Indie Hackers and 2000 of them were spammers. I was like, this is a battle that I’m losing. I just want to go back to basics. I’m not obsessed with growth at all costs. We don’t need to have thousands of people joining every week. We can just go invite-only mode, completely cut out the spammers, and have the community return to some level of normalcy. 

I like the idea of an invite tree where you can see every single person, who they were invited by, who that person was invited by, who that person was invited by because then you start to build a clear picture of, okay, this guy’s a spammer. How did they get invited? All these other accounts of spammers too, and so we left it on invite-only mode for the better half of last year. I’m pretty sure we’ve rooted out literally 100% of the spammers. 

Six months ago, when people complained about spam on Indie Hackers, they were complaining about people posting escort ads and Viagra pills ads. Today, when people complain about spam on Indie Hackers, they’re saying, oh, this person made a post that I didn’t like, which is a huge improvement.

Rob: Right. They’re marketing their startup. That’s a trip. I mean, I’m on Indie Hackers relatively frequently and I never saw the spam. Was it just getting rooted out before I saw it or what was the deal?

Courtland: Yeah, I mean. What time zone are you in, you’re in the United States?

Rob: Central time.

Courtland: Okay. So if you were in Europe, you saw a lot of spam. So what happens is we would go to sleep, the community manager would go to sleep, the forum would be overrun with spam, or depending on your browsing habits, if you go to indiehackers.com/newest and you just see a firehose of posts. A lot of that was just spam, and most people don’t go there. But the people who do go there are the people who want to curate the community and have some sort of control over what makes it to the front page by uploading stuff. They were just deluged with spam. 

That sucks because if they can’t go there and get a good experience, they’re not going to go there, which means no one is giving us the signals we need in uploading posts to figure out what should go to the homepage.

Rob: That’s a problem, a big problem. One of the things I was most frustrated with running Drip was the spammers/people who would hack—not hacking, but they’d sign up for an account and they do phishing attacks out of Drip. They would send shady emails and get us on a blacklist. It was such a headache, and we had all these checks in. We had this code that would validate. It was a credit card versus some actions in the app. These days, if we were raising funding, we would call it an AI thing, but it was just code that measured. We could detect patterns and behaviors.

I hated it. It was a smaller factor, but I remember being, I could see selling this company purely being on the worst days of those when Derek and I went to sleep. It was just Monday morning at 2:00 AM, and then Russian spammers created a bunch of accounts and sent a bunch of phishing stuff. I thought I could sell this company. That was early on. We’re like $20,000 MRR. Did it do that for you? Did it ever feel like, you know what, I could rage quit this thing up in the air because of this?

Courtland: Yeah, I never got quite to the point of I would quit because of this, but it’s super demoralizing. The number one thing I think about every day is how do I improve the community? How do I promote the people who are doing a genuine and authentic job of contributing great content and stories? And then you have these other people who just cause you to lose your faith in humanity. They’re just total […] like sociopaths. They just don’t care. You’re trying to build a good thing. They are just trying to ruin it. Not even trying to ruin it but just trying to promote their own thing. They don’t care that it’s going to ruin your thing.

I talked to so many people who dealt with this problem. Famously at PayPal, they’re sending money over the internet, and a huge percentage of what they needed to do to make that business work was getting really smart at fighting fraudsters. That was super hard for them to do and they had a super talented team to do it. I talked to Amjad Masad at Replit. It’s an online code editing tool and code education tool, and it’s like, what do people use Replit for? Buildings crypto bots to mine crypto using his server’s bandwidth and costing the company a whole bunch of money. They just don’t care if they’re going to ruin Replit’s business if they can make a few thousand dollars.

Time and time again, I talk to people who have this issue where you just deal with the worst people. The internet’s cool because you can reach everybody. You can reach all the good people, but you also end up on the radar and straight in the crosshairs of the bad people who don’t care.

Rob: Yeah. When you get any modicum of success, I mean, we have TinySeed companies who by the time they hit $20,000 MRR, $25,000—so it’s still relatively small—facing any type of email, if there’s any type of email sending capability, people start targeting them. In terms of I’m going to do a phishing attack, I’m going to do a spam attack, I’m going to send unsolicited email based on your good IPs.

Courtland: This doesn’t happen in real life as much. If you have an events business or a store, you don’t get people who come into your store and just start yelling loudly to advertise their product. You just don’t deal with that many. I guess you’re going to yell at shoplifters and stuff. There are not as many […] when you can see people face-to-face. You can look the owner in the eyes and see that it’s human. You’re like, I don’t want to ruin this person’s business. But online, people are just kind of […]. They default to everything is a faceless corporation. If I can take advantage of them, I’ll do it.

Rob: That’s right. Anonymity is a real problem, that they can remain anonymous. I mean, we’ve seen that with online forums, right? Facebook, I know people get out of control too, but at least, usually, real names attached to it versus YouTube comments, even Reddit to a certain degree. I think there’s a big, big case to be made there.

Courtland: Yup. But Indie Hackers is no longer invite-only as of three weeks ago. Anybody can join and now we have a whole process. A lot of it is manual where we’ll look at your contributions. 

So when you join, you can’t make a post, but you can make comments. You can help other people out in the community, contribute, discuss, and upvote comments. Essentially, if you earn your way out of that second-class citizenship (shall we call it), you’ll get a little email from me and we’ll promote you. You can now be a fully-fledged member of the community. Every now and then we’ll just promote somebody. If you do an AMA with somebody, we’ll just kick them right up to a full-fledged member because that’s somebody that we know and trust, but everybody else has to go through this process.

It’s really good at weeding out who wants to be an authentic member of the community and who wants to just do a drive-by, hey, I’m launching my product today. Can you give me access so I could launch today and then disappear and go somewhere else? It’s really funny to me how people will literally ask to do that. 

I get emails every day like, hey, I’m launching today. I haven’t put any work or effort into the community. Can you just whitelist me so I can do my drive-by post? Even when we got rid of the spam with the invite codes, I got DMs on Twitter from spammers. They’re like, hey, I’m trying to post my Viagra pills thing and I can’t get it in. Can I get an invite code? I’m like, are you kidding me? Why would you ask me this?

Rob: Yeah, it’s crazy. It’s like they think you’re a customer service rep who just doesn’t know any better and who’s going to send that. That’s such a trip, man. Similarly, it’s odd that forum spammers, community spammers, and email spammers are similar because we built up a thing, we architected it out, and we never got to build it, but it was a trust score. It was when you first signed up for Drip, your trust score was zero. And then depending on what you did, your open rates, your click rates, and what your credit card is, if it was prepaid or not. There were all these factors. There were 10 factors.

Over time, that score would go up or it would go down. If you got a bunch of spam complaints or you got low open rates, we would start to knock that down. When you get below a certain threshold, we block sending on your account. You built it up over time, I think, if you had a bunch of sends that went great, you get up to 10, 20, 30, or whatever. It sounds like you figured out perhaps an easier way to kind of hack that.

Courtland: Same thing with Indie Hackers. You basically get a little score. You don’t see your score, but okay, below a certain score I don’t even look at your comments and stuff. Above a certain score, admins can—we have some moderators and stuff—see, okay, here are the people this week who’ve reached the score, here are their comments. Who should we promote into a fully-fledged member?

It’s funny because there’s a whole Black Mirror episode on this. It’s very dystopian. Everyone in society has a little score and people can constantly score you. She just has the worst day ever and gets a negative score. Now she’s an outcast and she can’t get an apartment and can’t get invited to parties. But I think, in reality, it’s not so bleak. It’s usually pretty useful, and it makes the community better for everybody for there to be the score that’s invisible, so long as it’s responsible and it can’t be gamed to ruin a perfectly good person’s time, it works.

Rob: Yup, I agree. So I sent a tweet out. I found some pictures from MicroConf 2011. It was the very first MicroConf, and so this is like 11 years ago. I posted a picture of Andrew Warner taking the stage for the first-ever talk at the first-ever MicroConf, and we all look super young because it’s 11 years ago. So Andrew Warner, then there’s me and Mike Taber, Ramit, Hiten Shah, and the […] guys or Sean Ellis. There’s just a handful of pics.

It got me thinking though as I look back, I was like, man, we were really young and we didn’t know what we were doing and here I am still doing. I was doing the podcast then.

Courtland: Same thing.

Rob: Yeah. I was talking about startups, I was running events, and I’m still doing those things. It got me thinking. Often we’ll try to look out 5, 10, or 15 years because it’s just so far in the future, but I’m wondering if you have. Do you ever think, what am I going to be doing in a decade? Am I still going to be doing something similar, related to this, or do I think I’ll have a time doing this and maybe switch it up?

Courtland: I live in the future, man.

Rob: Me too.

Courtland: I think way too much about the future. There’s a good book, it’s called The Time Paradox where they talk about how a lot of our decision-making in life comes down to the default time frame that we live in, and some people default to the past, some people default to the present in certain situations. I think probably most tech founders and entrepreneurs are very future-focused people, which I think correlates highly with success because we’re often thinking, what can I do now to get to this desired state 5 or 10 years from now? That turns out to be a really good way to plan and strategize, but it’s also not the best way to enjoy life in the present.

I remember being in school and going to MIT and thinking, at the end of our four years in our fraternity, everybody could get up and you could just talk, you can give a speech. You can say whatever you want. It was an awesome tradition because you just got four years to think about what you’re going to say and then you get up and you talk. One of the cool things about it was everybody felt so lucky to go to that school, people would default assume that you were smart and give you the benefit of the doubt.

But I thought a lot about it and it’s like, none of us are here because of who we are now. We’re here because of decisions we made when we were 12 years old, when we were 13 years old. We’re going to take school seriously and I’m going to study for the SAT, and now, 10 years later, that’s paying off. It’s a lesson that never really left me. The decisions you make now will change your life dramatically 5, 10 years in the future.

I hope that 10 years from now I’m still working at Indie Hackers. If I’m working at Indie Hackers 10 years from now, that means Indie Hackers is an amazing place that I’m probably super jazzed about or it’s way bigger and more impactful than it is now. If I’m not working at Indie Hackers 10 years from now, that doesn’t necessarily mean it’s a failure, but it definitely means I moved on to something else that was more exciting, and it’s not really my plan right now.

My plan right now is to try to build Indie Hackers into an institution, something that really touches a ton of lives in a really positive way. I think it already does, but I think if you build a good thing, bringing it to more people is an even better thing. If you build a really cool tool or a really cool sandwich shop and you could franchise it, and now more people in the world can eat that sandwich, that’s a good thing. If you invent penicillin, it’s 100 times better if you bring it to 100 times more people.

I’ve been trying to make Indie Hackers a good thing and I want to bring it to thousands of times more people, and that might take 5 or 10 years.

Rob: It’s interesting you say that because obviously, you and I have both been doing this now for years. Talking to and trying to help aspiring and actual founders, I guess we’re all actual founders but founders who have actually shipped and who are just working on it and want to do it. It wasn’t until the last couple of years really as like, I have this podcast, I have MicroConf, and now we’re going to launch TinySeed out of it.

I started thinking, I think we’re grown up enough that I need a mission, you know what I mean? What is the mission? I’ve been honing it, refining it, and I still struggle with the exact wording. I tossed it to Producers Xander, I showed it to Einar and Tracy. What’s interesting is the mission of all three of those properties is the same thing—the mission of TinySeed, MicroConf, and Startups for the Rest of Us, it’s all the same. It’s to dramatically multiply the number of self-sustaining independent startups in the world.

Whether the word wording exactly is a SaaS startup, I just want there to be more and I want them to be self-sustaining. So look, maybe they took funding, maybe they didn’t, I don’t give a […]. In fact, I never have. I just don’t want the dogma.

What’s interesting is once I said that mission, I was like, wait a minute, I’ve been doing that for 16 years, more than that. 2005 is when I started blogging about this, and it’s like, I didn’t have that mission in mind, but that is what I want to do now for the rest of my life. That’s it, for the rest of my professional career. I think I’ll be working until I basically keel over dead.

That was an interesting umbrella term for me to realize, you know what, I enjoy podcasting and I’m going to keep doing it, but I don’t need to podcast if I’m still doing something that follows the mission, right? I don’t need to have an online community. I don’t need to have a fund, but I think I will be doing something under that umbrella forever.

Courtland: I think that’s a great vision. One of my heroes is Charlie Munger. He has a lot of writing and business advice that influenced me, just life advice and ways to think that influenced me when I was younger. The dude is 98 years old. We did last year a podcast where he’s distilling investment advice and talking about how he’s running Berkshire Hathaway with Warren Buffett. He’s 98. He’s found what he loves. It’s kept him healthy even mentally, he’s super sharp, just as engaged as ever. I think that’s a great goal.

I think your mission for MicroConf, not just MicroConf but everything, even TinySeed as well, is kind of the same as mine. I want more people to become financially independent and free to live the lives that they want to live. I think that starting online businesses is one of the best ways to do it. It’s increasingly becoming accessible and a good way for people to do it, and […] it’s encouraging to see everyone doing it. That’s my mission too.

I was reading some research. My buddy Julian turned me on to this researcher. Her name is Erin Westgate, and she published this paper about the different types of lives that people can live that are good. There’s kind of this idea of a happy life. A happy life is characterized by some of the most obvious life that people want, like a life full of comfort, joy, security, free time, money, and satisfaction. But then there’s also this other type of life that people can optimize for, which is a meaningful life. That’s a life full of significance, purpose, coherence, and societal contribution.

I think the older one gets, the more we think about living a meaningful life like, what’s the purpose of it all? Because more and more of life is behind us and less and less is ahead of us. So we think, okay, what’s the lasting impact that I’m having? That starts to become much more valuable to us than it was when we were 25 just thinking about how to be happy in the short term. 

I think it’s the same with the business and a career. It makes a lot of sense as we get older to think about what’s the impact of what I’m doing? How do I tie all the things I’m doing together into some sort of mission and impact, and there’s a lot of personal satisfaction that comes from having a meaningful life.

Rob: Yeah. I always say, entrepreneurs most should seek freedom, purpose, and relationships kind of in that order, although relationships probably before purpose, I think, or in tandem with it. But I think that’s one of the reasons I sought entrepreneurship was the freedom from a day job and the freedom from being told what to build and when. I remember working, working, working towards it because I live in the future you do and just thinking to that day when I quit the job.

Then I got it and I was like, this is amazing. It was amazing for three months and then I was like, I’m kind of bored. What do I need to do next? Because I had freedom but I really didn’t have a purpose. I had a bunch of small apps that kind of all had this autopilot traffic from SEO, ads, and this and that, but nothing was that interesting to me. It was just a paycheck. It was a nice paycheck. It was $120,00–$150,000, this is in 2007 so it went a long way. Yeah, it was great. I was like, yeah, I’m free. But then I was like, uh-oh. I need to find a purpose.

That was where I really started doubling down on talking about this in writing, doing the book, and the podcast, and all of that came out in about an 18-month period because I was like, I want there to be more, and here’s the other thing—relationships. There was kind of no one else doing it. Joel Spolsky was blogging in the early 2000s, he started a software company, and then Patrick McKenzie started blogging a couple of years after I did and he and I ran across each other.

Then I’d heard of Basecamp and they had a SaaS that I didn’t use. But I’m getting to 2008, 2009 and I’m like, is anyone else thinking about or doing this whole kind of indie hacker, bootstrap startup path? Is it a thing or am I the only one that’s done it or will do it? Because I genuinely didn’t know, and that was part of building the audience that then turned into the community was like, I want to be able to hang out with other people who talk about this stuff because this is really interesting to me. No one else in my town gives a […] about this. Can I find 100 people that I can get into a room with that care about it? That was a big thing.

Courtland: I mean, it’s that purpose thing you’re talking about like freedom. When I talk to Indie Hackers, the vast majority of Indie Hackers are looking for some type of freedom. That’s why they’re starting their business because they feel they don’t want to work for somebody else. They want more time. They want to work with people. They want creative freedom. They want financial independence and no ceiling on their income. I think that that is the purpose, right? That can be your purpose to have this epic adventure that you’re going on in order to earn your freedom.

You and I both have been on that adventure for some part of our life, but then you get your freedom, you get there, and suddenly, you lose your purpose. It’s like you had this epic journey, you completed it, you succeeded, and now it’s like, now what? It’s like Frodo at the end of the Lord of the Rings. The movie ends there. He casts the ring to the fire—I don’t know, there are 10 different ending scenes—but then it’s over and the credits roll. It’s like, well, what did Frodo do after that? Sit around in the Shire telling stories about how he had this epic adventure at some point. It’s kind of hard to figure out what you do after you’ve accomplished your mission. How do you find a new purpose?

Rob: Right. We can’t just get on the boat to the Undying Lands like he did.

Courtland: Right. He just sailed west. Not a thing.

Rob: I want to piggyback on that topic because you just talked about losing your purpose or you find it. It’s the arrival fallacy is what it is. You arrive and then you’re like, I will arrive once I do this, and you do for about a month or three months and you decide, oh, I need to do something new.

I tweeted out and you retweeted (thanks), what should you and I talk about on this episode. There are too many topics for us to cover. One that I think’s interesting as Arvid Kahl said, “Please give them mental health topics some time. Building anything is hard, building in the middle of a pandemic is even harder. Some people need permission to let themselves feel this, and you both can help there.” And this, obviously, is a topic that my wife talks.

My wife’s a clinical psychologist, you should check out the ZenFounder podcast if you want. Every week, she’s releasing an episode on this topic as a founder married to a founder, consults with founders, and as a psychologist. But aside from that, you and I have shared our own struggles with building businesses and mental health during that. Why don’t you start and then I’ll go because I think we both have more stories, you know.

Courtland: Mental health is super important. I’ve struggled with various mental health issues sometimes. I’ve been very depressed, I think. three times in my life. One of them was this past year. I had a good six months where I was just like, what’s the point of anything? Why do anything? It was a hard time because the pandemic is very isolating. I have this road trip that I’ve talked about where I was just not really seeing anyone. I moved to Seattle and it was kind of isolating as well.

I think for me, it really tied into this topic of purpose because from probably age 8 to age 34, I’ve always had this vision of what do I do with my life? It’s like I’m on this epic adventure. I’m trying to build some very big ambitious project, and it’s usually creative. It usually involves building a website, designing it, and putting code together, which is this awesome feedback loop of reward and work and then reward and then work. I think for the first time since I was eight, I kind of got off it last year and was like, well, what else is there to life? I sort of found myself spinning, and I wasn’t sure what the reason was. It was all these other proximate reasons like, is my relationship with my girlfriend going okay, or is it my living situation?

It’s really easy to blame the wrong thing. But I think at the core, I just lost the drive that I had that filled up my days and made every day feel like I was excited to wake up and do something. I think everybody has their own loop, their own natural process where left to their own devices they’ll do something. For a lot of people, it’s like, I’m going to look at social media. I’m going to come home and look at TikTok on my phone. For a lot of people, it’s like, I’m going to come home and spend time with my family.

I dated someone once, she would just impulsively just go out and just meet strangers, and she loved to do that. That was her happy resting place. For me, it’s always like, I’m going to sit down on my computer, I’m going to code something really cool, and try to work on it. I think without that and without replacing that with anything, it was very easy for me to sit around and be like, well, now what?

Now I’m dependent on other people to come in and hang out with me to do something entertaining or stimulating. It was very easy to just start questioning my purpose in life. I think this happens to a lot of founders. It’s kind of a cliché. People reach some level of financial success or they achieve some goal, and then they’re just aimless. Embarrassingly enough for me, it took me six months to figure out why. Then another few months, I go, okay, well, what can I do that has meaning and purpose that’ll be interesting and fulfill me? Then the answer is like, oh, I should just work on Indie Hackers.

Oh, yeah. I’m working on Indie Hackers for more than just these earlier reasons. I’m working on it because it actually is fun for me. It actually is entertaining. It actually is meaningful. I love the people that I work with, the people that I talk to, the problems that we’re trying to solve. All the challenges in front of me with Indie Hackers and the way that I want to grow the site are really interesting for their own sake.

I had to have this period of rediscovering why and not even rediscovering. It’s sort of changing the reasons why I’m working on the site and diving into those. I’m hoping that my entire life—I hope for everybody that this is the case—is full of these epic adventures and there’s never really an endpoint. There’s never really a midlife crisis point where I’m done, I’ve accomplished the goal, and that’s it. I hope that I’m always struggling towards something that is really meaningful and really enjoyable in the meantime, and that even if I never reached the end of that tunnel, it’s fun the whole way through.

Rob: Yeah. I don’t know if you’ve known people who retire, who work a day job for 20, 30 years and then they retire. They totally lose that meaning. Folks who sell a company and don’t have anything else to do, it can wreak havoc on their motivation, their mental health, and you can go downhill.

Courtland: Yeah. I mean, it’s kind of a cliché at this point, don’t do that. You don’t realize what you have until you lose it. I’d never had a second of my life where I didn’t have something like that, and without it, I’m like, what’s going on? It’s sort of hard to diagnose.

Rob: I have 100% gone through exactly that. I don’t even know how many times in my life from the time I was a teenager. I’ve talked on this podcast about burning out essentially while growing Drip and just how hard some of that piece was. I don’t know what I had. If I had clinical depression for part of that or if it was just burnout because it was just hard. I was stressed all the time. It was a rough go.

But what’s interesting is more recently, during COVID, 2020 I think a lot of people had a tough year that year for a lot of reasons, so did I. In fact, Sherry and I had just some—we’ve been married 22 years now. You’re going to go through ups and downs. We had a pretty tough stretch there in the middle of COVID. There were a few days where I kind of didn’t get out of bed, and I’ve never been that messed up before emotionally. 

I remember being like, I really want to keep doing life and I really wanted to hang out with my family, but I just didn’t have the motivation to get up. I couldn’t look at my Trello board and say, I want to do these things. I didn’t want to do anything. It’s tough. I don’t have depression. That’s not a thing that plagues my life. 

In fact, I’m on the other side of the spectrum where I’m a stress anxiety person. My whole family tree is all alcoholics, drug addicts who were self-treating themselves for these anxieties. My dad, I’ve talked about this before, has OCD. He had OCD so bad he didn’t leave his bedroom for seven months when I was a senior in high school. OCD is an anxiety disorder, so it definitely runs in my family, and it’s something I’ve learned to cope with as an adult.

I guess all that to say, this topic of founder mental health, in general, has always resonated with me. People never used to talk about it 10 years ago, and I think a lot more of us talk about it these days. I think that’s probably helpful to normalize it.

Courtland: One of my favorite things about living on the West Coast is that everybody on the West Coast compared to the East Coast, in my experience, is so woo woo and froufrou. Everyone on the West Coast that I know has a therapist. On the East Coast, it’s like a dirty word. You have a therapist, what’s wrong with you? I would never tell anybody about that.

I have a therapist. He’s awesome. He’s this 75-year-old Canadian dude. I want to go a million miles a minute. I talk so fast. The second I got into the therapy thing, I got 15 things I want to talk about. He’s like, let’s slow down, Courtland. Let’s take our time, find your center, and be one with yourself. I get so frustrated the first 5 or 10 minutes, and then I slow down. I’m like, okay, I want to smoke what this guy is smoking because it feels good. I know that I need it. I need to chill out a little bit.

I think it’s worth taking the time, whether you’re a founder or not. I think everybody should take the time to check in with themselves and work on your mental health because if your mental health is in a good place, I don’t think it’s wise to take that for granted. If your mental health is in a tough place, obviously, you got to prioritize that because that is the engine that powers everything else in your life.

I think about it a lot when I think about success and people struggling to do things. Everybody’s going through different […]. I had a ridiculously good Leave It to Beaver childhood. I have zero trauma. Zero real true lasting hardships that I really had to push through that left a scar on me, and so I was free in my 20s to just go tackle challenges without any mental health issues and stuff like that.

Other people were struggling to get out of bed. They’re struggling to deal with terrible things that have happened to them, and they’re trying to take on these big challenges. I think that it’s really easy to underestimate that. If you’re going through that kind of stuff, if you’re just ignoring it, I think you’re doing yourself a disservice.

Rob: At times in my life, I have ignored it for too long. The other thing I ignored was physical issues. I know we’re talking about mental health, but I had a really bad shoulder, back pain, and neck pain because we all hunched over our desks. I had it for years and it was kind of debilitating. It was to the point where I was under constant pain, and why the […] didn’t I do something about it?

I remember saying I don’t have the time, and then I went to a chiropractor and massage therapist and it didn’t fix it quick enough. I was like, I just don’t have time to carve out two hours a week to do this so I didn’t do it. It wasn’t until we moved to Minneapolis, I had sold the company, I went to three different massage folks, and I found a dude who’s really good. He integrates all these different things. It hurts like crazy, but I went to him twice a week for months. I just said, I’m carving out this time.

It also helped that I didn’t still run the company so I could just take a couple of hours a week. It took him months and months to work it out. I mean there were all these toxins and crap in your muscles when they’re like that. I would almost get sick after because I had just let it go for too long. This chronic mental, you shouldn’t live like that. I say that as much for anyone listening as I do for myself in the future. I refuse to live that again, you know?

Courtland: Yeah, it’s hard. I met a person and she was telling me about this phase of her life where she was super grumpy. She was just kind of a […]. I asked her, why are you such an […]? Why are you being this way?. She’s like, chronic pain. She literally had chronic back pain and it would fire up. You know what doesn’t make you a happy, agreeable person? Being in physical pain all the time. That makes me really short-tempered. I think lots of people have different things that affect us at a lower level and that bubble up to how we actually behave.

I think for founders, in particular, we can be so single-mindedly focused on what we’re working on, so ambitious, so driven. I got to work on this business. It’s got to take up every hour of every day. Nothing else is a higher priority. It’s easy to get into a mode where like, oh, let’s put working out on the backburner. Let’s put mental health on the backburner. Let’s put physical, all this stuff on the back burner. That can come later. I think that that is a recipe for disaster.

All these things are really basic advice. Get eight hours of sleep, take care of your body, blah blah blah, but it’s not about whether you know that advice, it’s about whether or not you’re doing it. I think 99% of people are not doing it. They’re repeating it, I’m repeating it, but not always doing it.

Rob: Yeah. And it wasn’t until I retired from Drip. Do you know TinySeed’s my retirement project, right? That’s what I told Einar.

Courtland: You’ve been put out to pasture.

Rob: Yeah, okay. I could do this thing just in my spare time. So I want to switch it up. We have so many topics on this thing, but Liam Symonds says, “If you had to fight one horse sized duck or 100 duck sized horses, which would you choose?”

Courtland: A hundred duck-sized horses easily. Can you imagine how terrifying a horse-sized duck would be?

Rob: It would be insane. I mean, that beak alone. Those things are hard. I don’t know if you’ve ever been pecked or nibbled at by a duck or a goose, that stuff is scary.

Courtland: I have.

Rob: And their tongues are terrifying.

Courtland? Have you ever looked a duck in the eyes, any bird? If you look in their eyes, they’re terrifying. They’re these deeply inhuman eyes. I can’t imagine a horse-sized duck. I would rather do almost anything.

Rob: Not with a 10-foot pole.

Courtland: Easy answer for me.

Rob: Me too as well.

Courtland: I like that one to start though. Let’s talk about mental health and depression. Okay, let’s talk about horse-sized ducks.

Rob: I had to switch it off, man. It’s too close to home. Oh, this is a good one. Greg Digneo says, “At what point in Drip for Rob and Indie Hackers for Courtland did you guys want to quit? And why didn’t you?”

I wanted to quit. I wanted to quit when Russian spammers were hacking us. I wanted to quit when I thought I couldn’t make payroll because I had overhired and I got a big personal tax bill. I wanted to quit when competitors would rip off my stuff. When we would spend months building, thinking, and marketing things and someone would just rip it off shamelessly. The worst part was they would claim that it was their idea. I take business a little too personally, I’m going to be honest, and that kind of stuff really bothered me.

When I left Drip 2018, I took a few months and I evaluated, do I want to walk away from startups altogether? Do I want to sell the podcasts and MicroConf? There were times where I was like, I don’t know if I want to keep doing this. I mean, the reason I didn’t is because, we talked about it earlier. I realize, oh, my mission in life is this thing, to promote entrepreneurship and to get more people finding freedom, purpose, and relationships through it. When I realized that it was like, well, I already have these platforms. Why don’t I build on them and just do more and double down?

In terms of Drip, the reason I didn’t quit when those were happening was momentum. To your point earlier momentum, I just had momentum going and I had a team I was working with. I couldn’t just walk away. If I was an indie founder, I may have trashed some stuff at a certain point, just table flip and say, this is too hard. I could do an idea that’s more lucrative for less work, but I had this team of 3, then 5, then 10. It’s like, everybody’s on board and they kept me accountable unintentionally. They didn’t come and say you need to be accountable, but I felt the burden of like, no, I had the vision, we all got on board with this thing, and I can’t walk away from this.

Courtland: Yeah, I see this a lot with founders. I think it’s kind of a miracle. If you look out into the world, there are billions and billions of people who wake up every day at 9:00 AM and go to a job they don’t even that much and work that job and come up. They’re consistent. They’ll do that day after day for years, right?

I talk to a lot of founders and it’s really hard for founders, podcasters, or whatever it is to last for more than a few months where they’re like, I give up. It’s too much work. I think one of the biggest difference-makers there is, besides the obvious, I got to get the bills paid, is that accountability. It’s the fact that I actually have teammates, a boss, and people who are depending on me. I think we’re just tribal creatures. We’re wired to not want to let down the people around us. If we commit to something, we agree to something, and we have work that’s waiting for us, it feels […] to just quit and not do that.

I think one of the best things you can do as a founder, if you really want to stick with what you’re doing, which is sort of necessary for succeeding, is to surround yourself with people who you feel accountable to. Even if you’re their boss, you still feel accountable to your employees, partners, cofounders, or team. I love feeling that way. I like Arie in my podcast because I don’t want to let her down. Part of her work is dependent on me getting the podcast out. We have a calendar event twice a week, I got to meet with Arie. Sometimes I cancel, but I’ll feel bad if I just abandon it.

For me, I’ve also sort of written off momentum. I never really wanted to quit Indie Hackers at all when things are going up into the right. And then in the early days, I had this email list where I would send out my progress every single week. Here’s what I did, here’s what I did, and people would respond. I feel super bad if I just didn’t do anything for a week. It would be embarrassing, quite frankly. What am I going to tell these people? I did nothing.

I had a lot of late nights on Wednesdays where I would just try to do something to report because I was accountable. The only time I ever got to feeling you know, maybe this is what I shouldn’t do, was last year when I started feeling a little depressed, a little bit down. Some of the things I was trying to do to grow the site weren’t working out. That feedback loop I’ve talked about before of positive things happening and encouraging you to try more things in the future, being optimistic was sort of slowing down.

I was like, I’m trying these things and the site’s not growing like I want. Maybe this is it. Maybe I’m out of ideas. Maybe I should rest on my laurels, I’ve done a good thing. I wasn’t working as much. Rosie Sherry, our Community Manager, quit and so our team was sort of winding down a little bit and we didn’t replace her. I had fewer of those mechanisms in place that keep you motivated. It’s the closest I’ve ever gotten to wanting to quit and exploring different things.

Rob: Wow. John Howard asks, “I always love the conversation of the scrappy early days for Indie Hackers and bootstrappers,” and then throws out a bunch of questions. “What does it take to get to an MVP? What does it take to get to dollar 1? What does it take to define your audience? I’ve been through it a bunch but a framework is always fun!”

Courtland: My favorite framework, if I was an indie hacker right now starting from nothing, is to literally just solve someone’s problem, like any problem. Put as little […] as possible between you solving somebody’s problem and getting paid for that as you can. 

Nathan Barry has this excellent blog post called, The ladders of wealth creation—I recommend it. The way he puts it is there’s a reliable progression that you can take to earn, build more wealth. At the bottom ladder, you’ve got trading your time for money, working for an employer, having a job, and then on top of the ladder is you’re selling products, right? You’ve got a social network, marketplace, a subscription software business, or something. You work your way there gradually.

I think what I would do is I would just start at the bottom, okay, I’m selling time for money. Well, how do I do that, but instead of working for somebody else, working for myself, right? You can go to, for example, Indie Hackers is a website where people have tons of problems. You can go to Indie Hackers, click monthly, see the top posts for every month. I think the top post for January is, share your projects and I’ll try to find you users.

There are 330 comments of people who were like, I’m working on this project and I have a problem. I can’t find any users. There’s just this one guy who is going through replying to everyone and just trying to figure out what their problem is and try to help them solve it. I bet you 10%, 20% of the people he talks to could get on a phone call and be like, hey, $200 I’ll do a consulting call with you. We’ll see where it goes. He can make thousands of dollars tomorrow with five or six consulting calls just because he’s solving somebody’s problem.

He doesn’t have to build a fancy website. He doesn’t have to hire a team and build an app. He doesn’t have to do anything. Just literally, what’s your problem? I will try as hard as I can to solve it for people who are motivated to solve these problems because I think they’ll make money.

If I were starting out I would do that and just follow that path and see where it takes me. Because when you solve somebody’s problem, they pay you for it. That’s a pretty good indicator that you’re onto the right thing. You can maybe tweak your idea, try to change your customer or the problem that you solve, but it doesn’t require you to be particularly brilliant. It just requires you going to a source of problems, which is really easy to find on the internet, and then rolling up your sleeves and doing something today, like right now.

Rob: I’m glad you brought up the solve a problem because I always forget to mention it because it is so ingrained. It is such a fundamental precept that I don’t even bring that up because I expect everyone already knows that, but they don’t. I’m glad that you did.

Courtland: Right, the curse of knowledge.

Rob: Yup, it totally is. I forget. Well of course you should solve a problem, but it’s well, not of course. For some people listening to this podcast it’s of course because I’ve been talking about this stuff for 17 years. I think it’s fascinating. We have the MicroConf State of Independent SaaS Survey. We do a survey and then put out a report. We talk about how people found their startup idea, their SaaS ideas specifically.

I just pulled the report up and 45% of respondents said they came up with their idea for their product or company, 45% it was a specific problem that they were experiencing, and then it’s another 22% a problem my customers or clients were experiencing. So you’re at 2/3 now. Another 13% was a problem or experience at my day job. So now we’re at 80%. Another 11% a problem a friend or relative was experiencing. We’re at 91% of hundreds and hundreds of respondents.

We’re at 91%. The last three are 8% said research, 1.5% said other, and 0.2% said I purchased the business. It’s just a problem that me or someone around me is experiencing.

Courtland: But it’s a problem.

Rob: It is and I think it’s super important because if you’re not solving a problem, this is where I get a little prescriptive with the B2B versus B2C thing. You and I have talked about this in the past. I just am so bullish on B2B and really bearish on B2C. Not only because I’ve owned I think two or three products or companies, one was an ecomm site that served consumers, but because every B2C company, specifically a subscription company that I see, bootstrappers the churn is too high. They can’t find customers’ lifetime values. It’s the same problem over and over.

I never say never do this, but I say, you probably don’t want to do this because the problems you solve for consumers, there’s not as much value as if you solve it for businesses.

Courtland: It’s super true. At the end of the day, businesses have way more money than consumers. They are more motivated to fix it most of the time. They have a gigantic list. They need to hire, they need to find office space, they need to market, they need to do sales, they need to solve their own customers’ problems. They need an email solution, they need hosting, they need accounting. Businesses have so many problems that need to be solved, it’s just generally a better bet to go that way.

That being said, I do think if you’re judicious about it and you want to do something that targets consumers, you can, you just have to really think about the problem. Again, you can’t think about, oh, I want to build the solution. I want to build this app or this service. You have to think about, what’s the problem I’m solving and what is the nature of this problem? Specifically, is this a problem that is lucrative to solve? Because if it’s not, you might solve it, you might get happy customers who say thank you, and you’re not making any money because they’re churning or they’re expecting it for free.

If you look at where consumers spend money or even where businesses spend money, I think the same formula applies. We want to find a problem that’s lucrative just what people are paying to do, right? Every time somebody spends money, it’s because we’re trying to solve a problem. People spend a ton of money on housing. People spend a ton of money on transportation. People spend so much money on education, it’s crazy. I think that’s what people are most business-like where they think, okay, if I get this education, if I go to school or I take this course, I will then be able to use those skills I developed to go make more money in the future.

People are willing to go into hundreds of thousands of dollars of debt to get an education because they see how it will make them money in the future. I think it’s not a coincidence that most of the people I know who have consumer businesses that are successful are educating consumers in some way and helping those consumers become better versions of themselves. Whereas people who are trying to sell these little tools, apps, and productivity software find it much harder because the problems they’re solving for consumers are not that valuable.

The average consumer doesn’t need a to-do list to organize their life, whereas a business might need that because they have a bunch of employees to coordinate, et cetera, and it’s valuable for them.

Rob: Yeah. And then there’s a bunch of different ways to do that, right? I’m working on this book and I have seven different thoughts of finding a problem, looking around you, translating an existing idea to a new niche where it’s like, oh, CRM software. Well, you know who doesn’t have CRM software are home improvement contractors. You know who built a home improvement contractor CRM is Jonathan with Builder Prime. He built it to good revenue and then applied to TinySeed and he was in batch 2.

Just taking a simple idea of like, we’re all familiar with CRM, but there are all these spaces that don’t have it. Another one is looking at a large space, a competitive space. This is if you’re probably further along on the stair-step approach, but have a hated competitor. For Drip, it was Infusionsoft, Marketo, and Pardot. I think for Xero, the accounting software, it was QuickBooks. They were then not QuickBooks. For Derrick Reimer and SavvyCal, a very competitive space. I wouldn’t say Calendly is a hated competitor, but there are definitely some improvements and some stagnation in that space.

The problem is the paradox of choice where there’s infinite—it’s like, well, I could look anywhere for a problem and it’s like, well, maybe focus on something you have, at a day job, or a friend or relative. Look at each of these things in turn and keep a notebook around for a month, and then look at what your expertise is in. If you’ve been a software developer at a credit card company for 10 years, you probably know more about credit card companies, finance, and banking than others, so maybe you should lean into that a bit. If you worked at Shopify for 5 or 10 years, you probably know ecommerce better than most people. There’s opportunity there.

Courtland: I love constraints for that. What you’re listing are basically constraints and not just any constraints. They’re clever constraints that raise your chances of succeeding. I think the challenge with most people looking for ideas is you get into the scarcity mindset. You’re like, oh, there’s just so few ideas out there. It’s so hard. I can’t constrain myself and limit where I focus on ideas. I need to look at everything, otherwise, I’m never going to find one.

I think the counterintuitive answer to that is actually, you’re way more likely to find a good idea if you have a bunch of constraints and rules that limit where you search because then you’ll dig much deeper. Your constraints could be anything. It could be like what you’re saying like, hey, what do I have‚ skills or experience? What have I done in my job? What problem have I experienced myself?

Your constraints can also be totally arbitrary. You can have a constraint of like, I like to be outside. What can I do that lets me be outside. You can have a constraint that says, I like to have an impact on the world. What would allow me to have an impact on the world? You can have a constraint that says, I like to work with my family. Something I can do with my family members, like food. Any of these constraints will just narrow your focus and help you dig deeper on an idea without having to have this paralysis of choice, where you’re juggling a million different balls.

The cool thing is if there are constraints that make you happy, there are constraints that build relationships with people, there are constraints that allow you to do things you’re going to enjoy doing, not only do they help you sort of come up with an idea, but they help you enjoy working on that idea after you come up with it. For me, I have a gigantic list of just random constraints and things to ask myself if I ever start a new business that I’m going to kind of go through. I could do this all day. We get a thousand questions.

Rob: I know. I am going to come back to these at a minimum in future episodes where I am answering questions or just as topics. I think you and I separately could cover these and it would be interesting. If we’re back together at some point here in the next three to five months, we should—

Courtland: I like this as a podcast format. I think you do this on Startups for the Rest of Us sometimes where it’s just Q&A, ask us questions. I never do it in Indie Hackers, but I should do it more often. I could do a Q&A and always bring on a guest and just do joint Q&As like this. I think it would be always entertaining once every couple of months.

Rob: Yup. So I have gotten a lot of positive feedback about the listener question episodes. I sometimes do them solo because, I mean, I’ve just done a bunch of them. That’s hard to do when you’re first starting out, but I’ve been able to do it and then about half of the ones I do are with guests and I rotate through the guests. It helps if people know who the guests are because if it’s just a relatively unknown person that most of the audience doesn’t know, you have to give a lot of background about why they have the credibility to answer these questions and why people should listen to their answers.

But if they’re someone that most people know or maybe you interviewed them. I mean, what I used to do is I would interview them one week, do a listener question the next week with them to be like, refer back to that episode because you just heard their story. Then I would handpick the questions. This is way inside baseball, but I would handpick because I have 20 questions available for Startups for the Rest of Us. I would think of what is this founder’s experience?

They bootstrapped to half a million and then they sold, so I’m going to do anything about early stage bootstrapping, nothing about raising funding, nothing about being a multimillion-dollar company. I would handpick the questions to make sure that they would have input on it.

Courtland: That’s super smart.

Rob: To curtate.

Courtland: Yeah. It’s such a challenge, I think, podcasts and media in general when you’re doing stuff with guests. It’s like, who in my audience even knows who this person is? Even within an episode, it’s like, okay, I know this person I’m talking to has a lot of good advice, but also, people might not even care about their advice if they don’t know their story or what they’ve accomplished, et cetera. I try to structure episodes. That stuff comes first. Doing Q&A episodes is the same. Maybe I do it the way that you do it. Have a story first, an episode like that, and then do Q&A. But then my worry is, okay, what if people didn’t listen to that episode and are like, who is this person?

Rob: What I would do is I would say if they were on the last episode. If for some reason you didn’t have it, here’s 60 seconds. I would basically have bullets of like, they started this, they got it to this size, they sold it. I would try to build their credibility really quickly.

Courtland: Here’s why you should care.

Rob: Here’s why you should care because this person knows a lot about XYZ, you know. All right. Pieter Levels asked, “How was the bootstrap scene in 2010 or earlier, and how did it change with indie makers, et cetera?” Were you around bootstrappers that long ago?

Courtland: Yeah. I was reading a bunch of Basecamp stuff back then. I was reading much of Patio11 stuff. I was reading Peldy in Balsalmiq back then.

Rob: What about me, bro? What am I, chopped liver? I have been writing all kinds of stuff. You’re like, this guy’s so […]. I hate this guy.

Courtland: I just skipped. I just click, mark read.

Rob: Nope. Spam. His emails go to spam. But you’ve named everybody. That was it. I mean, in 2010, I say everybody. I’m being a little facetious, but there was Joel Spolsky. The only two people I knew talking about entrepreneurship in any way that resonated with me that wasn’t just […] Silicon Valley, everybody raise, raise, raise dot-com was Joel Spolsky, who started blogging in 2000, 2001, and Paul Graham. Well, you could say he started Y Combinator venture capital, but I was like, no, no, no. But he actually built a startup. He actually sold it to Yahoo in the ’90s. And then he thinks so pragmatically compared to a bunch of the VC crap I was reading in Inc. Magazine, Red Herring, and all that stuff.

That was just the two of them in the early 2000s. Then Basecamp came around, it was 2005, 2006. It was called 37signals. First, it was a blog, then they were a consulting firm, then they launched a SaaS, and then it was me, Peldy, and Patio11. Those were the only people that I knew until 2008, 2009? That was kind of it.

Courtland: Super niche. It was super niche. I mean, I did Y Combinator in January 2011. I remember going into it and talking about Graham. I was like, I really like the Basecamp guys. I like what they’re saying. I remember Kevin Hale from Wufoo came in and gave a talk. He’s like, yeah, we never raised any money. We’re making $5 million revenue. We moved to Florida. It’s pretty cool.

Paul Graham went, he was super pragmatic. He’s like, don’t raise more money than you need to. It kills a lot of companies that could have had a $20, $30, $40 million exit. They just swing for the fences, try to become unicorns, and they weren’t destined. Their company can’t do that. So don’t raise that money and go for the gold if you can’t, and so he was even pragmatic about it.

There wasn’t a lot out there that was inspirational. Nowadays, it’s like a deluge. You could read and read and read all day, listen to 15 different podcasts, then discover another 200 podcasts, and never get to the bottom of it. It’s just the secret’s out, right? You can make money online in a self-funded, self-sustainable way from the comfort of your own home. I think that’s the biggest difference.

Rob: And bootstrapping, I mean, it was kind of a thing. Now you say bootstrapping and people know that’s a movement. There are tens of thousands of us that want to do that and it just wasn’t. There were a handful of people. There was no community, there was no central hub. In fact, that’s why when we started this podcast and I wrote my book, it was Startups for the Rest of Us.

If you look back, this podcast should probably be called bootstrapping blah blah blah. While the term existed, it just didn’t have the resonance with this idea. It was more like, well, I want to do startups because they sound fun, but I’m going to do it in a different way was really the angle there.

Courtland: In my opinion, I think it’s a less relevant term than it was in the past. I wonder what your thoughts are on the future of bootstrapping and how it is today.

Rob: I feel the same way. I think you put out a post about this a year ago where you’re just like, is this really important? Is the funding mechanism the most important part of this business, or is the problem that you solve, how you go about solving it, how you grow, isn’t that all really important? I’ve struggled with that whole thing technically, like ScrapingBee post, they’re a TinySeed company, but they’re very public about their revenue, they’re doing north of a million dollars. They got to the top of Hacker News with a post. It’s like, how we bootstrapped to north of a million.

The biggest conversation in there was just arguing over the term bootstrapping and whether they really bootstrap because they took TinySeed money. It’s like, if you talk to venture capitalists, if you raise less than a million dollars, most will be like, well, they’re basically bootstrap then. To them, it’s bootstrapping. I’ve built businesses with literally $0, that is technically bootstrapping. But is it at all important to define? What if my dad gave me $10,000, am I still bootstrapping? Yeah.

That’s where I’m like, stop. It’s not binary. I never thought it was binary. It’s a continuum, right? There are people who raise a little, raise a lot, raise half a million and are still acting bootstrappers. They are super capital efficient, they’re super pragmatic, and they’re building a real product for real customers and paying real money. That’s what we all do whether you have $0 in the bank or half a million.

I say bootstrapped and mostly bootstrapped now you’ll hear me. You’ll hear us say independent SaaS or indie SaaS because it implies, well, I’m not beholden to anyone. Even if I raise money, I still have control of my company. I’ve toyed around with all these terms. The thing I struggled with is in the State of Indie SaaS this year—the report’s not out yet. We did the survey, we said, what do you call your type of company, and we had all these options. It was bootstrap SaaS, indie SaaS, independent SaaS, blah blah blah, and it was overwhelmingly bootstrap SaaS. Even people who had raised $100,000, $200,000, or $300,000.

Courtland: Yeah, I think in a way, the focus on bootstrapping even as a thing, it was sort of a reaction. It’s a reaction to the fact that big tech really only cared about people who were fundraising. If you wanted to get any sort of media attention, if you want to have any sort of success, if you want to have any sort of support or resources, you kind of had to go that path, which is not surprising because it was an early nascent day of startups, not that many people were doing startups, and so the people who had all the money—the VCs—sort of control the narratives.

If you wanted to do something outside of that path, you had to be very vocal about the fact that this is different, I am bootstrapping, there’s another way. It’s like a measure of success that’s not as important anymore. The fact that it’s no longer a shocking thing that you didn’t raise a whole ton of money to start your company and it still was successful means that bootstrapping won its place. It’s a valid way to get started, which means it’s not worth glorifying quite as much as it used to.

There are a lot of different paths. Everyone’s well aware of that and pick your poison. Pick your preferred choice. When Indie Hackers started, I felt there was a big fight I was always trying to wage. You don’t have to do it this other way. The VCs, the investors—you don’t have to do that. Now I’m like, it’s obvious you don’t have to do that. I don’t need to toot that horn now. It’s more about, okay, what do you want to do and how do you do it?

Rob: There’s all these paths and funding is a tool. If you want and need that tool, then do it, and if you don’t, then don’t. You could be on Indie Hackers or part of MicroConf, and you can raise money or not. It’s just we’re all in this trying to become independent sustainable companies.

I find it interesting because you brought up that bootstrapping and the real, I think, religious adherence to it was a reaction against the broader narrative of venture funding. I had this exact conversation about two weeks ago with a friend of mine. I think Basecamp was a big part of that, to be honest. Basecamp was so vocal about it and they got a lot of press about it.

I was talking to my friend and I said, I understand why they did it. I like Jason and DHH. They invested in TinySeed’s first fund, they mentor—I get it. I think they may have long term done some damage by making it such a religious thing. They used to say like, well, bootstrap will never take funding. Anyone who takes funding is XYZ. They also would say, like, we don’t split test, we don’t track in our funnel, we would never sell our company. Planning is guessing. We don’t market. It just works.

They said all these things and they were shocking, but I think a lot of people saw that or still hear it and think that that’s the way to grow a business. I actually think it’s not. I think those are anti-patterns. I asked Jason Fried. He’s been at MicroConf. He and I have had breakfast. He was on stage. I did a Q & A with him. I asked him about some of these things, about why was Basecamp successful? He said, we got a lot of things right, but we got a little lucky. He admits that.

They were early, they built a good product, and they did hit something just right at the right time. But I do think that that narrative, the religious nature of it or this black and white nature of it I think is a bit played out. I think it’s an anti-pattern. I think it’s detrimental to new entrepreneurs coming into the scene.

Courtland: Yes, there’s a sense in which it’s like—you got to look at why are people writing and saying the things that they’re doing? The Basecamp guys are just expert marketers. They are really, really good. I mean, they built productivity software. They are trailblazers. I mean, they created Rails. They were doing this way before everybody else. But also, they’ve really got people excited about the fact that they built productivity software. How do they do that?

By having great marketing, great messaging. They always stood for something. They always had an enemy. The point there wasn’t necessarily like, let’s be responsible stewards of how everyone starts companies in the future. It was like, how do we get the word out about our philosophy and our ideals? You don’t do it by making lukewarm statements. You should go by saying, fundraising is evil. You do it by saying like, we’re fighting against the big guys.

That’s the kind of messaging that resonates, that gets people talking, people argue against you. People will take a side. Even on their Rework or It Doesn’t Have To Be Crazy At Work, one of their books. They have a chapter that’s basically like, pick a fight. They’re just telling you their strategies—pick a fight. If you are not the person to think about things deeply, it does create religious zealots who take a side and who don’t give the other side any real thought. I don’t think that’s the best way to be as a founder.

I think the best way to be as a founder is when you’re marketing, pick a side. Be super out there and—

Rob: Opinionated.

Courtland: Opinionated, exactly. But when you’re making decisions internally, be rational. Do a cost-benefit analysis. Figure out what it is that you want. Don’t close yourself off to any particular path for religious reasons.

Rob: I think that’s good advice, not only for founders but for all humans actually to evaluate both sides of that. I’m glad you said they’re expert marketers and they did this as marketing. The best marketing is when you don’t know you’re being marketed to, right? This is what Steve Jobs and Apple did so well is he would do these things that everyone would want to be like, we’re not going to live stream our product announcements. No other company does that. They want as many people to see it, but they’re like, no, no thanks. It’s this secret thing and Basecamp did well with that.

Courtland: I had DHH on Indie Hackers a couple of years ago and we did a debate. All right, DHH is this firebrand on Twitter. Let’s do a debate on work-life balance. I was trying to set him up with somebody that would be his hated enemy like Keith Rabois or something, he refused. He’s like, no, I’m not going to come on and talk to somebody that I hate. So I had him talk to Natalie Nagele, who runs a very calm company, Wildbit. It’s very bootstrapped. It’s very kind of in his style, but she had kind of a different point of view. I thought that DHH’s point of view was unrealistic.

It was so interesting the difference between him on Twitter starting his crazy fights taking these crazy, hardline, opinionated positions, and when you talk to him and it’s a real-time conversation, he’s utterly reasonable and rational. It’s like, okay, you can see the difference. Marketing is marketing.

Rob: Well, sir, we’ve been chatting for a while. There are a lot of good topics here. I hope that folks in both of our feeds have enjoyed this conversation. I’m @robwalling on Twitter, you are @csallen. And of course, indiehackers.com and microconf.com. We do a lot of things, but thanks for hanging out, man.

Courtland: Yeah, well, I think if you’re an indie hacker listening to this, you’re considering starting a company, and you want to do something a little bit bigger, raise money from TinySeed. I love TinySeed. I think raising money is totally cool. At the end of the day, TinySeed is sort of designed for people who have the bootstrapper mindset. Trying to find investors, I think, a big part of that is finding the right match. I like what you’re doing at TinySeed. I like anyone who’s basically trying to help indie hackers. I’m putting in here an involuntary ad for your funding mechanism. Check out TinySeed if you’re an indie hacker.

Rob: Thanks. This will go live when applications are still open. We do two funding batches a year in the US and the Americas, and then we do one in Europe. If you hear this and you get there quick enough, head to tinyseed.com/apply and apply to our Accelerator. It’s super fun. It’s a year-long remote, and it is focused on bootstrap and mostly bootstrap SaaS.

Courtland: Cool.

Rob: All right, man. Thanks for coming out.

Courtland: Yeah, thanks for having me.

Rob: It’s always great to talk to Courtland, and it’s been too long. He and I both agreed that we should do this more often because we could have gone another hour and I think it would still be interesting. I hope you enjoyed that. Thank you as always for tuning in. I will be back again in your ears next Tuesday morning.

Rob: It’s another episode of Startups for the Rest of Us. I’m your host, Rob Walling. I’m fired up to be here today. Thanks for joining me. A lot of interesting listener emails I’ve received over the last couple of weeks, couple of months, that we will be walking through. Some of these are questions. There is some feedback, there’s a critique of my episode 581 on Inflation for Founders that I think is really well written and well reasoned, some feedback on some statements I made about certain things being an inflation hedge or not, thoughts on renaming a podcast.

A funny story about our listener, Matt Paulson, who we’ve heard from before. He heard me on My First Million where we talked about potentially renaming podcasts and there’s a funny story there. We do have a couple of listener questions that I will dive into.

Before we dive into that tasty goodness, I wanted to let you know that as of yesterday, applications for two new TinySeed batches are once again open. We have our Americas batch and this will be a Spring 2022 batch that’ll start in just a few months, and then we have our EMEA or Europe, Middle East, and Africa time zones batch.

As you may have heard on this podcast, we raised a $10 million fund to invest in companies in Europe, the Middle East, and Africa time zones, that allow us to have a dedicated program manager there. It allows us to have calls at times that work for those time zones, so we are running a simultaneous application process.

Obviously head to tinyseed.com and there’s an apply button if you’re interested, or if you know a great bootstrapped founder who has some traction with their SaaS app. We would love for you to refer them to tinyseed.com. Those applications will run for about two weeks. I love the announcement when we get to pick the companies and then we do our live stream of talking about them.

With that, I’m going to dive into my first email. The sender asked to remain anonymous. He said, “Hey, Rob, I just wanted to say THANK YOU for everything you do on Startups for the Rest of Us. Biggest fan. I could listen to you all day long. On your podcast is how I heard about MicroAcquire, where I just sold one of my side projects. Granted, I’m on a much smaller scale but that never would have happened without you. If you ever need anything at all, I’m excited to help. Beta tester, feedback, development, help, conference. You name it, I’ll be there. I live within driving distance in Minneapolis, if you’re ever looking for someone to compare with, give me a shout.”

Thank you for sending that in. I have said this on the show many times, but I have a folder in Gmail that is just labeled thanks and it’s where I collect emails like this. These have a very deep meaning for me. They have a very deep impact and this more than anything, is why I still do what I do. This is my legacy.
I could walk away from all of this. In fact, at certain times in my career, I have evaluated what if I didn’t podcast anymore? What if I didn’t do events? What if we didn’t do MicroConf or whatever it was. This was years ago and there have been turning points in my career where I’ve doubled down on it. I’m at the point now where this is what I’m going to do for the rest of my life. I have made that decision.

I don’t need to do it for the money. The money’s nice. The money shows that there’s value to society. There’s the whole conversation around that, but honestly, that’s not why I do it these days. I do it for the impact, I do it to help founders, I do it to match the mission of Startups for the Rest of Us, MicroConf, and TinySeed, which is to multiply the world’s population of independent self-sustaining startups.

That’s why it’s so amazing to receive emails like this. Thank you so much for sending it. Obviously, if you have a success story, write in, let me know. I don’t even need to read it on the show. It means a lot.
I’m approaching episode 600 here on this podcast and working on my fourth book. In fact, my wife, Sherry, has already thought up a topic for a fifth book that she and I can collaborate on. I’m fired up about the next six months, about the next six years to keep doing this, so thank you to the person who wrote that email and thank you as a listener for showing up every week.

Piggybacking on that, we received another review, five-star review for Startups for the Rest of Us. It says, “Finally, a good podcast by and for SaaS founders.” It’s from Alex J. Sanfilippo from the US. He says, “I didn’t realize how difficult finding a good SaaS podcast would be. Most just cover theory or only want to talk about MRR, ARR. Also, they ramble on for a long time. Here’s a show with shorter episodes with a host who knows SaaS and asks the right questions while providing actionable value. A+, keep it up.”

Thank you so much, Alex. Wherever you listen to your podcast if you could drop a five-star rating, whether it’s Spotify, whether it’s Apple podcast, whether it’s the Google podcasts shop, what’s it called these days? I think they renamed it four times, it would be awesome. That’s just a small way to give back.

Next up is an email from a longtime listener, Matt Paulson. He’s the founder of marketbeat.com, who was having amazing success with his startup. He said, “Hey, Rob. I just listened to your podcast interview on My First Million. I thought that discussion on potentially renaming your podcast was fascinating. It reminded me of my experience renaming Analyst Ratings Network to MarketBeat after attending MicroConf in 2015. I told everyone the name of the business at the conference and nobody could repeat it back correctly after I told them the name. Everyone mangled it, which persuaded me I needed a simpler name.

I found marketbeat.com on Sedo for $9500 and the rest is history. When I made the change, I assume there would be a lot of confusion with our advertisers and subscribers, but really, nobody missed a beat. Everyone figured out the new name just fine. All our advertisers renewed, nobody emailed us and asked us what happened to the old name. The only thing we really couldn’t change is our sending email domain. We were never able to build up marketbeat.com’s email reputation in the way that we had with analystrating.net, so we’re still sending email from our old domain name.”

Thought you’d enjoyed the short trip down memory lane. Analyst Ratings Network, that is rough. That’s how I felt when I was talking to Sam on My First Million. I said, I avoided your show because I thought it was kind of a get-rich-quick or wannapreneur show, but it’s not. It’s actually the show talking about going deep on business ideas and business philosophy hosted by two smart dudes.

I was just talking about how hard it would actually be to change the name. I think that given the fact that you have subscribers and an RSS feed, that’s not going to change. You can just change that name, and essentially Apple podcasts and Spotify (I think) it will propagate. The harder part is do you have brand equity with people who maybe don’t make the transition? Or who looks different in their podcatcher and they get confused in the short term?

I think the bigger challenge—and I brought this up on the show—is (I said) what name do you pick? Because naming is hard. I’ve thought about it over the years. Startups for the Rest of Us, I love the name that starts with startups. It’s startups for us, for those of us who aren’t in the know, who don’t have friends and family—I always chuckle at that term—I remember the raise from friends and family ramble, […] good for you because I didn’t have rich friends or a rich family. It was never an option for me or for a lot of us.
Those of us who can’t move to Silicon Valley for three months to do an accelerator—that’s why we started TinySeed—those of us who didn’t fit in when we went to all the startup events that basically are about pitching investors, asking for permission to start your company—I never wanted to do that; that never felt right to me, and that’s why we started MicroConf—to the podcasts, the books, and the blog where all they talked about was raising funding and how to do a pitch deck and nothing about actually growing your company, that was all just this. It was like funding was the goal and that’s why we started Startups for the Rest of Us. That’s why I wrote Start Small, Stay Small was a reaction against this narrative in this script.
I think that name does still apply. The name is also long. I’ve often thought about is there a shorter, more succinct way to say, is there a better name given what the podcast has evolved into? But given that it still applies, I honestly struggle to change the name from Startups for the Rest of Us. The logo, on the other hand, that appears in Apple podcasts, that’s something that I revisit every few months about potentially redesigning that.

Onto our next email. This is from Pawel Brzeminski, founder and CEO of snapprojections.com. He has some feedback about episode 581, where I talked about inflation for founders. He says, “Rob, I tuned in to Episode 581 and I’ve got a few comments. I mostly agree with everything you said—a nice episode, by the way—but thought to comment on a few things as it may be valuable.

By the way, I was a personal finance nerd before starting a financial planning SaaS, but I learned a ton more about this when I was building and running Snap Projections. Then I learned even more about it when I started investing after I got acquired (I sold Snap to a public company, although I still run it for them). First off, gold is not an inflation hedge,” and now I’m going to flip back to me. This is news to me. I’m sure there are 10 or 20 people out there doing a facepalm, but I’ve just heard this narrative over and over and over and I never researched it, I just believed that we are holding on to gold as a hedge against inflation.

Back to his email. He said, “There is scientific research and empirical evidence that confirms this not unless you have centuries of an investing horizon. I got the papers, the long term returns to durable assets, the golden dilemma, and the gold constant with conclusions about gold pricing.”

That’s interesting. I don’t know. Do we have 2%, 3%-ish of our portfolio in metals? It’s for diversification but this is one of those things that I look at. It’s not generating any return, it’s not generating any income, and I’m always frustrated by assets like that, so not inflation hedge.

All right, next. “Successful investing relies on keeping costs low at broad diversification,” which I said and he agrees, “and reducing deferring taxes. The last bit is actually very important and usually underappreciated and worth mentioning. I spent seven years talking to financial planners and running the numbers. REITs,” which are real estate investment trusts, if you remember, “especially commercial ones could have issues not because of inflation but because of the remote work aspect. Granted, most leases are long-term, we may not see it immediately but I’d be very careful.” I do think that’s good advice. It’s not an inflation issue, but it’s just economic/changing the way we work. It’s a market force that could do damage to reach long-term.

Back to his email. “If you want to park cash, short-term bonds aren’t a bad place even if the rates are going to be increasing. VSP has a 2% payout ratio, which is a lot more than a standard checking account these days. HISA would be best, but the amounts are usually limited.” By the way, neither Pawel or I are financial advisors. This is not financial advice. For entertainment purposes only. We’re just talking about things right.

Lastly, back to his email, he says, “I was very surprised you didn’t include TinySeed in your discussion here. Angel investing like private equity or VC is another asset class and that episode gave you a perfect opportunity to talk about TinySeed. For example, I completed my first angel investment a few months ago and I totally include it as part of my overall asset allocation. There’s no perfect inflation hedge but investing in businesses, especially good SaaS, meets a lot of criteria of a good inflation hedge. Cheers, Pawel.”
Well, thank you so much for writing in. It is interesting. I didn’t want to show my own stuff, but frankly, it didn’t occur to me. What’s funny is, if you go to tinyseed.com/thesis, we talk about trying to broadly index across hundreds and hundreds of early stage SaaS companies. It’s not technically an index fund like a Vanguard fund.

We are diversifying risk right across a lot of companies. And I have thought about SaaS as a different asset class. I do include that in our family balance sheet. Since I made our very first angel investment in WP Engine in 2011, those sit off to the side. I don’t count them as such. I usually say, once I write the check, it goes to zero, but then as the company becomes worth more, we do some marking to market, as they say. Absolutely, B2B SaaS (I think) is an amazing inflation hedge.

In fact, a few years ago, we invested $22,500 I believe was the amount, and it was probably 2014, so this is 7–8 years ago. It’s one of those things where we write an angel check, I write it off. I assume that I’m going to 10X, 100X, or it’s going to go to zero, maybe something in between, but it’s not something that we’re banking on. It’s illiquid for a long period of time. That company has become quite profitable. It’s a SaaS company that’s doing single digit millions a year, but the profit margins are insane. I think their net margin is 50% or maybe it might even be 60% and they’ve started to kick off dividends.

They’re one of the handful of private angel investments we made that are LLC. Now every quarter, we get this check, this direct deposit into our bank account. The last one was a third of the initial investment. It was like $7500 and we get these every quarter. It’s super interesting that that is now an income stream and if they decided to sell that company, it would obviously give a lot back.

We actually had the opportunity to sell our stake in this company for a great markup. It would have been I think more than a 10x return on the money and I looked at it and said, but then what would I do with that cash?

That cash would come into the account, we already have an emergency fund, we have the cash we need to live on. I would then need to turn around and find an investment. What investment do I think is going to beat this company or B2B SaaS in general? And I couldn’t think of one. So we left it in there because I think it’s a great investment. All that said, yes, TinySeed is broadly indexing across B2B SaaS companies, and so far the results are looking really good. They’re definitely in line with all the projections we made.
We are closing our EMEA fund here soon, but frankly, we launched the TinySeed Syndicate, which is always open to new investors. The nice part about a syndicate is if you’re an accredited investor, you can say yes to each individual deal. Let’s say, we launch a syndicate deal every month or two deals each month, it’s going to be early stage, or even later stage B2B SaaS company that has a really low minimum investment, usually $2500 up to (say) $10,000 per investor, and you can decide to go in on it or not based on the terms.

I believe our first deal that we ran is about to fill up, which is great because this is all an experiment. We’re trying to find product/market fit ourselves. It’s like launching a new feature of your app, not knowing if anyone’s going to use it. So far, that’s great. Obviously, we’ll be raising more funds in the future but if you’re an accredited investor and if you are interested in potential inflation hedge or just having exposure to a different asset class, early stage SaaS is great.

From my own experience, we are 11 years from our first check and things have gone very, very well. Anyways, tinyseed.com/syndicate, if you’re interested in that. Of course, the syndicate folks will be the first to hear when we launch our next fund that invests through TinySeed accelerator.

My next email is a question from Matt on micropreneurship. He says, “I’m a C-level tech executive, and I’m very happy about where I am career-wise and professionally. In other words, not really interested in creating a large-scale technical B2B SaaS. When I look at investment opportunities, I’m intrigued by tech micropreneurship, as Rob laid out in Start Small, Stay Small. I viewed it as a better opportunity versus something like real estate or franchise ownership, both of which I have considered.”

I want to break in here. Before I started doing software products, I was in real estate. We were buying homes. We owned four homes in LA that we rented out, a total of seven units. I thought that was the path to early retirement—software developer by day, doing real estate by night. It was a pain and I had no advantage over anyone else. That was when I realized that as a software developer, you have an advantage in startups because non software developers don’t know the tech side of it. I different looked at franchises in real estate that any way to basically be in control of my own destiny. That was always the goal.

Back to Matt’s email. He said, “What is the state of micropreneurship? Is it dead? Or do opportunities exist for someone like myself looking to either start up or buy a smaller product with around 20%–30% return on investment? I would love to see an episode dedicated to micropreneurship. What are some markets to buy small SaaS products for example? I don’t see a whole lot on sites like Flippa. How do valuations on smaller SaaS or products work? Thank you and love the podcast.”

It’s such a great question. Micropreneurship, as laid out in Start Small, Stay Small, is truly that lifestyle bootstrapper where I want a business that’s going to do $5000 a month up to $100,000 a month. Some get bigger, but that’s usually the range. You don’t really care that much about growth. You care about cash flow. You go for net profit margins. I had apps doing 90% net profit margins. You’re doing tens of thousands a month with 90% net profit margin, absolutely life-changing. That’s what Start Small, Stay Small looks.

It doesn’t look at the more (say) ambitious bootstrappers. That’s actually my next book that I’ve now circled back on and I’m starting to focus on energy again. That’s what that focuses on. It’s more of I think that MicroConf growth, or the the TinySeed companies, the folks that say hey, I want to get to seven or eight figures in annual revenue and I either want to then become quite profitable, throw off a lot of cash, or I want to have a really nice $10 million, $20 million, or $30 million exit. Micropreneurship is definitely something you can and should do on the side. I think that’s certainly how the stair-step approach talks about it.

The state of micropreneurship is it’s absolutely alive and well. There are still a lot of folks doing that. If I were to do it today and try to launch from scratch, I would look at the ecosystem, the plugin, add-on, and extension ecosystems where you can build a product and get it into that app store. There’s the Chrome App Store, WordPress, there’s Shopify, Heroku, Jira, Slack, Figma, Jenkins, Amazon, AWS, Netlify, Grafana, and there are others. It’s not an exhaustive list.

We’re actually going to link up an article on code with wolf.com that talks about where to publish plugins, add-ons and extensions, and they have 12 on that list. I think there are at least 20 or 30 more that I would consider. You have Notion, Airtable. These are off the top of my head. A nice part about these ecosystems is you don’t need to do everything. You don’t need to do all the marketing. You kind of have this channel that’s already available to you, just to be found. It’s organic search. These are great step one businesses, which I think micropreneurship is really designed for, and that’s where I would start first.

I’m going to start today if I was going to acquire and I had the means to do it, which is what personally I would do. I had a mix of this as I was coming up. I acquired some and I built some, but I would be looking to Quiet Light Brokerage; I would get on their email list. I would look at FE International. I would look at Empire Flippers. I would look at MicroAcquire. I’ve had folks from I believe all of those companies except maybe Empire Flippers on this podcast in the past, talking about valuations.

If you go to Startups for the Rest of Us, you click that the magnifying glass at the top and you search for acquiring or acquisitions, you can get an idea of multiples, but frankly, content sites are 2–4, 3–5 times annual seller discretionary earnings, which is kind of equivalent to net profit. SaaS is a little higher now. It’s probably 4–6, I believe. This is for smaller apps. That’s kind of the going rate.

I’m going to be honest. When I was buying and selling these apps in 2006 to (I guess I acquired my last one in) 2011, it was 12–18 months of net profit. That was what we saw on Flippa. Flippa was a bit rough, as Matt pointed out, but that’s where the multiples are. Can you absolutely get 20%–30% return on investment? I think so. I guess I did it back in the day.

I know folks who are still acquiring you these micro private equity funds that are building these big portfolios of these profit-generating apps. They’re shockingly efficient and they’re capital efficient. That’s one of the reasons that SaaS and software are such a sought-after asset class. Is it alive and well? Absolutely. I think that if you haven’t taken the plunge, it’s a fun adventure.

My last email for today is from Luke. He’s the founder of bakup.io. He has a couple of questions he submitted. I actually answered one of them on an episode a while back about giving a SaaS demo, but his other question is, “If you know you have a potential $10,000 MRR product but don’t have the capital spend on advertising, where would you start with user growth? Starting a blog is easy with all the software we have access to, but what is the best way to attract readers and get them to click on your startup?”
We get this question every now and again. This is the fundamental question, isn’t it? This is what almost every article I’ve ever written or every podcast that we’ve recorded winds up being about. You could literally write a book on this. Advertising is usually, in most cases, not the way that startups—especially bootstrap startups—make it work. There are exceptions, you need a pretty high lifetime value to make it work. Starting a blog is not it either. You could start a blog and just publish articles, and no one’s going to come. You have to be strategic about it and think of it as content marketing.

I would start with SaaS Marketing Essentials—it’s a book—and Traction by Gabriel Weinberg. I would look through those marketing purchases and think where does this audience live? Is this audience online? Because if they’re not online, none of this is going to work and you have to try other things, in which case you have to charge more because you need a lifetime value or an annual contract value that can justify you spending the money to go offline.

If they are online, where do they hang out? Are they in Facebook groups? Are they on Hacker News? Are they on Indie Hackers? Or do they have their own forums or own closed communities? You can go hang out there and be part of those communities and just be helpful.

That gives you a start of seeing how those folks think about stuff. You don’t go in there and get and pitch your stuff, but you start to become part of the community where potential users are. Are they already looking in a certain place for the thing you’ve built? Are they looking in Google?

Then maybe you do need to pony up some Google ads just to see if it works, figure out which terms work for you, and convert, and then do hardcore SEO to rank for those terms. Maybe they’re searching in a marketplace because this is an add on. Maybe they’re looking at Heroku or wordpress.org. Then you build something, you put it in there, and you figure out how to do search engine optimization and rank there.
Are they on social media talking about this looking for solutions? It’s just a matter of getting in the headspace of those consumers. Even if they’re businesses, they’re still going to pay for and subscribe to your service. And they’re going to look for it somewhere. That’s how I would think about it.

To add a little more context, there are really five main B2B SaaS marketing approaches. These are the five that I think everyone should at least consider, if you think they’re going to work. There’s content, there’s SEO, there’s cold outreach, there’s business development/integration marketing partnerships, and there are ads. I’ll run through those again.

I’ve separated content and SEO, because sometimes people write content purely for SEO. They don’t care at all about the kind of social pop, or getting on Hacker News, or getting into these social news sites. Other times people do the content marketing, they don’t care about SEO at all, and they really just care about the social pop, or the initial sharing on the LinkedIn and the social media sites. Those are two ways that I’ve seen dozens, if not hundreds of startups, SaaS founders, grow amazing six, seven, eight figure companies almost solely on the back of those two.

Cold outreach, it’s a little saturated these days, but it still works in certain spaces. That can be email, that can be LinkedIn, however you do it. Certain people have opinions on that, they’ll never do it, that’s fine, too. Then don’t go into a space where that’s what you need to survive.

Then there’s business development, which is integrations. I think of that as affiliates and partnerships, where sometimes you do a full integration, sometimes you can just do a joint venture partnership quickly, and you just recommend the tool to each other’s audiences. Other times, you are trying to find affiliates who already have audiences in the space to do a webinar with or you give them a cut, 30%, 20% of the annual fees that the customers who they send you pay and now you have this amazing revenue stream from an influencer.

Then lastly, it’s ads. That could be Google ads, that can be Facebook, LinkedIn. There are all types of ad networks. These are high-level things, those are only five. There are also the caveats of well, then there are free tools, which are like engineering as marketing, there are in-person events, podcast tours, and on and on. Traction is a good book. I actually have, (I think) five or six marketing approaches that are not in Traction that work for some companies. I’m planning to mention them in this book that I’m writing. I’ve kind of put them in a chapter of it.

If you’re intrigued by the thought that I’m writing another book and want to hear when it comes out, you can head to robwalling.com, sign up for my email list or head to startupsfortherestofus.com. Sign up for the email list there.

The cool part about Startups for the Rest of Us is you receive two never released episodes that we have both an audio format and then a written guide so you can read through it—a nice-looking PDF guide. Those are called Eight Things You Must Know When Launching Your SaaS and 10 Things You Should Know as You Scale Your SaaS.

There are evergreen episodes that are fundamentals that I don’t believe will change this year or in five years but things that some of which I haven’t mentioned on the show. So startupsfortherestofus.com. You sign up for that email list, and then obviously, I’ll be notifying you when the book comes out.

Good question, Luke. I will say it’s a very broad question. There’s no super easy answer. This is the hard part of being a founder, is making hard decisions with incomplete information, because that’s usually what it is. You don’t have the complete information of what’s going to work. You have to take your best guess, you have to run experiments, you have to just see what works.

That wraps us up for today. Thanks so much again for joining me for this episode 587. Thanks for coming back every week. If you’re not subscribed, obviously hit that subscribe button and I will be back in your ears again next Tuesday morning.

Rob: In this week’s episode of Startups For the Rest of Us, I talk with Michele Hansen. She’s the co-host of the podcast, Software Social, a bootstrapped entrepreneur who has grown her SaaS to north of $1 million with her co-founder, and she’s written a book about mastering customer interviews. It’s called Deploy Empathy: A Practical Guide to Interviewing Customers. Simply a good book.
I’m going to be honest. Her experience, learning, and then practicing customer interviews is pretty unique, and you can tell in the book that this is not just another book about doing jobs-to-be-done, customer development interviews. She has a very unique take on it and you’re going to enjoy it, even if you’re concerned or scared about doing customer interviews. You don’t have much interest in them, this conversation’s going to be enlightening.
You can go to deployempathy.com if you want to check out all the ways you can buy the book and learn more about Michele. Of course, you can check out her podcast, Software Social. Without further ado, let’s dive right into my conversation with Michele.
Michele Hansen, thanks for joining me on the show again.

Michele: Thank you for having me back.

Rob: Folks might recall episode 524 of this very podcast. It was called Bootstrapping a Commodity SaaS, where you and your husband, Mathias, came on and talked about your trials, tribulations, and victories with Geocodio.

Michele: Yeah, that was about a year ago or two.

Rob: This is 586, that’s 60-some episodes, so yeah, a year-and-a-half. And I would like to note that in the book that we’re going to talk about today, your book is Deploy Empathy: A Practical Guide to Interviewing Customers. You revealed that the two of you have bootstrapped Geocodio to north of a million dollars ARR. That is awesome. Congratulations.

Michele: Yeah. Geocodio turns eight in January, which is pretty wild.

Rob: Yeah, and when you started it, didn’t it do $31 in the first month or something like that?

Michele: Yes.

Rob: You were like, hey baby build this little fun tool, and now that is an amazing, life-changing startup for you guys. Amazing, life-changing product.

Michele: Absolutely. When we started, it was actually a side project to keep another side project going. It never even crossed our minds that it could be our full-time job, and here we are now. I have actually worked on Geocodio longer than I ever worked for anybody else at this point.

Rob: Yup, and it’s a […] SaaS it’s that the flywheel that just gets going in the first year. It does X thousand, then the next one it does 2X, and then 3X. Pretty soon, you’ve built this amazing two-person SaaS company that makes seven figures and is the envy of so many people that we know. It’s like more people do it than you think but also not as many. A lot try and don’t get there.
What do you think that you and Mathias have done right? What are two or three things you might say that this is what created the success for us?

Michele: Do what you said about people wanting to get to this point. That’s something that drove me to write the book because having built a company I feel a responsibility to help others do the same. Whether that is investing to help them, we’re excited to be investing in kinds of […] or just helping them where we didn’t have help or we didn’t really have mentors throughout this whole process.
The one thing that we do is we listen to our customers and we let that guide us. That was a huge motivation for me, and getting all of this stuff about how to understand your customers and how to talk to them out of my head and on paper as a way to help other people do what we’ve done and then some.

Rob: Yeah, and I think that’s a good way to think about it or I like that way that you’re thinking about it because you have this information in your head. My guess is you’ve probably heard other people talk about customer interviews or you’ve read other books on it, and they just didn’t quite sync up with your experience.
I’ll put it this way; I’ll speak for myself. I wrote Start Small, Stay Small in 2009, published 2010 because I was pissed off at all the […] books about starting up and how none of them were for us, none of them were for bootstrappers, none of them talked about being a one- or two-person company. Everyone expected you had venture capital. I was so angry and I was like, well I’ve done this. I just need to get this out.
I’m not saying you’re as angry as I was, but I am curious if you looked around you’re like, you know? My take I think would be really helpful and it isn’t out there yet.

Michele: Yeah, there are a lot of great books on user experience research but basically—with the exception of The Mom Test—a lot of them are not written for people who are trying to start their own companies without funding, and as you said, there are those assumptions of like, oh, will it bring this to your team of people? And like, you know? You want to get some budget for this. Or like, think about budgeting for travel to visit them.
I started out doing user research as a product manager in a bigger company, and those things were not off-putting to me at the time, but throughout the years and throughout having this experience of jumping on a call with a founder and just helping them figure out how to interview customers and I would recommend the books that I had used when I was learning how to do this, people would be off-put by it because they’d be like, oh, I don’t have a budget. I don’t have a dedicated researcher. I don’t have a dedicated UX person to prototype with them. I don’t have all these things that this book is assuming I have. Is this still for me? It made people feel like this was not something that was for them or that they weren’t welcome, and something that they had already built up some fear around of talking to people and understanding it.
There was already a large amount of fear built up around just the interaction itself of interviewing someone, and then adding on this additional layer of insecurity around, oh my God. This is only for people who have funding. It’s only for big companies. What am I doing here? I don’t belong here.
The goal is to make it approachable to everyone, but also think about how The Mom Test is on a lot of people’s shelves and it does such a great job of talking about that stage when you’re figuring out what you should build, whether you should build it, and how do you get that really early feedback from people.
You also need to get feedback if you’ve been running a company for 5 years or 10 years, or once you’ve got it going how do you stop churn, or how do you figure out why people are bouncing off of something, or how do you figure out why people are happy so you can get more people who would be happy. There are all these other things that you can use research for, and there just wasn’t really a book geared towards the indie software experience.

Rob: That’s why it’s so helpful and why it resonated with me. As I read through the book, your examples all feel very much in line with my experience and the experience of the founders around me, and it’s because you are a practitioner both of customer interviews and of being a bootstrap founder. If folks check out your podcast (Software Social), they’ll hear you and your co-host (Colleen) talking about this kind of stuff.
It was probably six or eight months ago, but you either did a sample interview on air, where you interviewed her. I don’t remember what it was, but that episode struck me as really interesting because hearing the insights, and you have at least one transcript, maybe a couple in this book of sample interviews.
That’s what I like about this book and that’s why folks listening should pick it up. It’s for $10 on Kindle and $25 on paperback. It is crazy practical. There’s a tiny bit of theory—just enough—there’s a framework, but then it’s like, when should you do interviews, recruiting participants, how to talk so people will talk, sample interviews, sample scripts, and if you really want to hit the ground running you flip through this. And you also give either the justification of when to do it and why.

Michele: Yeah, I wanted to make it really practical for people, bearing in mind that they may already be feeling overwhelmed by this. I don’t want to bog them down with theory. There needs to be enough that it needs to be woven into it, and ideally you could sit down, skim the book. There’s even a section at the back of the book that’s like, if you just want to skim this here’s your little cheat sheets for the stuff you need and you can just get running and go on it.
Actually, being a practitioner, that was something that I didn’t realize until the book had been out for a couple of months at that point, when someone pointed out that most of the books on user research are written by consultants, which makes sense because the book is written for them in a way.
And there are very few books that are written by practitioners, like Cindy Alvarez’s Lean Customer Development comes to mind, for example. Never mind a small SaaS practitioner, so yeah. The ideas you can just pick it up, run and get started, and have what you need there as reference if you need it later.

Rob: I’ll quote you from your book. People sometimes quote me what I’ve said on a podcast or in a book and I’m always often like, did I say that? Because either it’s like, huh, that’s actually really insightful. I’m happy that I said that. Or I don’t remember saying that and that sounds kind of dumb, or I don’t agree with it anymore.
Anyway, I want to read this quote from the book because I was struck by the title. It’s Deploy Empathy, and I had to think of deploy as a code, but if you’re deploying code… Then I was like, no, it’s not that. I think it’s bringing empathy to the customer. Actually, a piece of this you took from a different definition.
There are embedded quotes in here, but the bottom line is it says, “Empathy is about understanding how another person thinks and acknowledging their reasoning and emotions as valid even if they differ from your own understanding. In this context, in the context of this book, empathy means entering the other person’s world and understanding that their decisions and actions make sense from their perspective.”
The subtitle is, A practical guide to interviewing customers, but the title is, Deploy Empathy. It’s an unusual title, I’ll say. What brought you to Deploy Empathy?

Michele: I wanted to have a title that was sort of a wink to developers, so that they knew that this was a book for them. When I initially started writing the newsletter which became the book, it was very much geared towards indie developers and makers.
The audience has since expanded significantly beyond that, but that was really the core group of people. I thought by using the word ‘deploy’ in it, it’s like you’re deploying code and what you are deploying has empathy for your customer embedded into it, but you’re also using empathy.
What I didn’t realize until well after I had launched the book, which I wish I had done more research on, was that apparently deploy empathy is also a Gary V phrase and I had no idea about that. It’s basically really hard to search for on Twitter because you get all these Gary V people in there.
I seem to have a talent for picking ungoogleable titles because Software Social you get all this stuff about social software, and it’s like ugh. Don’t ask me for naming advice, but yeah, it’s a very subtle wink to developers but also that a non-developer would also understand the title at the same time.

Rob: Got it. I totally picked up on the ‘deploy,’ and I thought to myself, am I reading too far into this? Is there […] symbolism?

Michele: Do you have it? Flip over to the back cover. Do you have a copy on you right now?

Rob: Yup. I have a PDF you sent me when we hooked up.

Michele: Okay. On the actual book—I’ll have to send you a picture of this—there’s a little code block that says, “Empathy deploy, Initializing mental models… Building interview skills… Softening tone of voice… Configuring recruitment template… Preparing tools… Loading scripts… Installing debug protocols… Processing results… I thought it was very clever by doing that.
Rob: That’s the tell. That’s the confirmation. It’s funny. Let’s talk about feature requests as customer research. Your book is nice and concise, about 200 pages, and then there are 100 pages of extra stuff. There are transcripts, sample interviews, and appendices. When I looked at the appendices, I was like, oh yeah. There’s a whole appendix aimed at single founders or people without teams and all that. One piece of this, Chapter 56, is Feature Requests As Customer Research. Want to talk to us a little bit about that?

Michele: Yeah. This chapter came out of a lot of the conversations I had with readers of the book. I very much did a build-in-public, write-in-public process for writing the book, and started writing it out as a newsletter. When I got to where I was, I had a full draft. I interviewed 30 early readers of the newsletter for those early drafts, understanding why they want to learn about this in the first place, but also what are their fears around this, what have they already tried, what other practical business books they liked and what did they like about them.
One hesitation and fear that came out of those was people feeling they didn’t have time for this on top of everything else you’re doing. Great. I know this myself. If you’re running a company, you’re doing everything from building new features to security issues, to negotiating a contract, to dealing with your account, and to answering customer support, you’re doing everything. The idea of adding something else on top of it, even if people get the point of it, they see the value of it, and they want to do it, it’s like how the heck do I fit this in?
I don’t have time to just stop what I’m doing and just research for a month, which is something Colleen and I had talked about on the podcast. I was always like, no. Integrate it into what you’re already doing. You don’t have to go into a research cave for a month and stop building features.
Feature requests are a really helpful springboard for understanding what people are trying to do without necessarily having to chunk off all this time to do interviews or recruit people for them because people are coming to you. There is a whole chapter on how do you take a feature request and turn it into something that helps you understand what that person is trying to do and why.
A lot of people, when they get a feature request, their first thought is, is this even possible? How would I make that work? What else do I have going on? What is the time? It feels like someone handing you a project, especially if you’re a developer.
Instead, reframing that as, let’s just pump the brakes on figuring out if we can build this, or should we, or where it fits in. Then let’s pull back and say, thank you for the suggestion. I’m really curious, can you tell me what leads you to want that? What are you currently using to get that done? You can understand what someone’s process is and understand how valuable it is to them.
If they’re currently patching together four different tools for that and they would rather use your product, that’s a really great sign. There’s a lot of frustration, hassle, and probably money spent there for just a random passing idea they had, and that’s something they do once a year, then probably not so much. It’s really important to get that context first. You can always make it become a phone call so you can really understand what they’re trying to do and use some of the interview techniques from that method.
If you do use feature requests as a springboard, then you don’t have to do that recruiting process. I imagine after you do a couple of calls with people requesting feature requests, you will want to go, then recruit people, understand better, and you’ll really see the value of it.

Rob: And you have a list of questions that if the feature request happens to come while you’re on a phone call, here are some sample questions you can use. I won’t read all of them, but you have questions like, can you walk me through the context on when you might use this? How did this project come about? What do you currently use for this? What did you use for this in the past? Do you pay anything for those other tools? Can you walk me through which one to consider?
It’s really about getting more context and about getting a deeper, more complete understanding of what they’re actually trying to do and what they’ve tried in the past. With any app I built—Drip is the most recent one—I remember getting feature requests, like for the campaign builder, I want an ‘if,’ so I can say if they have this tag, then send them this email. Otherwise send them that email.
It was always like, okay, why do you want to do that? What are you trying to do? Show me the actual emails you’re trying to send, and (a) we can probably do it with two campaigns, but (b) that would be a really clunky way to do it the way you’ve described. I don’t want to do it the way you’ve done it, but we are trying to get to the problem, not their solution.
Oftentimes, customers are not software people. They just think, what’s the simplest? I need a check box here but that will actually ruin your app over time because then you’ll have a gajillion check boxes everywhere. And it turns out that particular one we kept getting variations of, eventually we just need a visual workflow builder.
That’s a better way to express an if, rather than attach or bolted on to the campaign builder like the customers were suggesting. But we never would have understood (maybe) the depth of their request or what they’re actually trying to do without asking questions like you have here.

Michele: Yeah, and very often people express problems as solutions. That can be a little bit frustrating as a product builder. I remember being a product manager. You very often get that from executives too. That’s like, oh we need to add this feature. Okay, but could you walk me through what’s leading you to say it? You can deliver on their problem but maybe in a way that’s more coherent, cohesive, or fits in better with the product vision, but that the problem they’re expressing through that solution is still valid.
That’s where the role of empathy comes into this. The perspective this person’s coming from is valid. The way they’re expressing it to me may not be the most optimal way. Let’s put that aside, let’s try to figure out. What is the problem beneath all of this? What are they really trying to do? What is the context that has made them think about this so much that they are now proposing a solution to me? They put a lot of thought into this. Why have they put so much thought into this? What is going on here?
Then when (as you said) you get multiple people coming to you with these features that have similarities in them, then it’s like, okay there’s some underlying context here, and the fact that we’re getting them so frequently means that this is a shared problem among people. This isn’t just this one particular person with this very particular problem.

Rob: Right, and the interesting part about interviews, usually when I hear someone do a talk about interviews, or I see a book or a podcast episode, I cringe a little bit for two reasons. One to your point earlier, who has time for this? The other one is it’s a little intimidating if you’ve never done them. It’s like a developer thinking about doing sales, where it’s like, oh I really don’t want to do that.
You seem to be a natural at these interviews because, again, I never heard your sample and then when I see the transcript in the book, it seems to just come to you without a lot of effort. Was it always like that, or were the early ones pretty rough and you had to get better, and now you’re really good because you’ve practiced?

Michele: It’s definitely not a natural for me. A lot of the tactics I talk about and how to talk so people will talk, mirroring someone and leaving space for them to talk, how to phrase follow up questions and show that you’re listening, all those things I had to learn. I write this book about empathy from the perspective of someone who had to learn empathy both for other people and for themselves.
I was fortunate enough to learn interviewing under the tutelage of a PhD user-researcher and an experienced design leader. I was basically a silent participant in their interviews for several months, handed books and papers from them about how to do interviews, had them sitting with me, partnering with me as I was doing them for several years.
I really got that kind of experience and I feel very grateful for that. Most people can’t get that kind of experience, especially if you’re a solo dev running your own company. The idea is how do I teach this to people in a gentle way, that if they’re coming at this from the perspective of, this is overwhelming, this is scary, I don’t like regular social conversations, and now you want me to talk to these complete strangers who pay me money. What if I what if I offend them and they don’t want to pay me anymore? There’s a spiral of anxieties that come up, so it was really important to me that the book exhibited an empathy for the reader so that they would understand what empathy feels like on the receiving end through the process of reading the book.
That was something I really focused on as I was writing it, to almost be a bit repetitive about, it’s okay if you’re worried that this is going to be a waste of time. It’s okay if you’re worried you’re going to say the wrong thing. It’s okay. The fact that you’re worried about it means that you care, and that’s a good thing.
You don’t have to push that feeling away. You don’t have to just tell yourself not to worry about it. Anyone who has tried to tell themselves not to be worried about something, knows that you end up just more worried about it. It’s, how do we exhibit that empathy and gentleness to the reader so that they feel confident in doing this.

Rob: And that’s somewhat a unique take. I think because you experienced both the academic side of it and reading all these papers and books, you received an apprenticeship in this by watching the PhD, and then you are now a practitioner in your own company, that there are a handful of people on this earth who have done those three things in this field.
You have such a unique experience that I think that’s why this book will resonate or who resonates with me and I will resonate with founders is because doing any one of those things is great and you could have written a book. It would not be this book. It would have a different feel to it or a different focus.
A piece of the book says this book will help you, and it lists a bunch of things. It’s, launch a product, see if people would pay for something, understand why people are canceling, know why people are buying so you can find more customers, determine which features to add next, figure out how to keep customers and why people buy again. It’s not just, here’s interviewing for academic’s sake. This is what a perfect interview looks like. This is how you accomplish all these things.
As I look down this list, actually it feels a lot, it reminds me a lot of jobs-to-be-done. Most people would have heard of that by now, and there’s interviews. How would you compare and contrast your approach or your mental framework of it to jobs-to-be-done?
Michele: It was very much a jobs-to-be-done book. I am hugely influenced by Clayton Christensen and Bob Moesta. By the way his book, Demand-Side Sales, also has three sample interviews in it, so if that is your favorite part of my book, go get Demand-Side Sales. So good. Very, very influenced by jobs-to-be-done.
I only namecheck it a couple of times because I don’t want to introduce too much jargon into the book. There are references throughout it to a lot of jobs-to-be-done books and at the end of it, but it’s very much a jobs-to-be-done book. It’s, what are people trying to accomplish overall? What is the process they’re going through to do that? And then the idea from a business perspective is if you solve steps of that process and make it easier or faster or cheaper for people to do the things they’re already trying to do, then you will have a better chance of having a successful business because you are solving a real problem that they are already trying to solve.

Rob: Right. I realize I should have said this at the top but folks want to buy the book, it’s on Amazon. You can search for Deploy Empathy. We’ll obviously link it up in the show notes as well. You both have a Kindle and a print version. Have you considered doing an audio version?

Michele: Oh yeah. I did a private podcast presale last fall. I was just recording every chapter, basically, so I release one chapter a week from the end of August to the end of December. I actually just hired an audio editor today to do the post production work, to get the audio book out there.

Rob: Awesome. Are you going to put it on Audible?

Michele: Unclear. I thought I was going to do Audible. I’ve been reading a lot about Audible lately, and it doesn’t seem super great for authors. I might find a way to distribute it instead, but it seems there might be some hijinks going on with how Audible calculates when they pay an author.

Rob: Well that’s a bummer because I have two books on Audible.

Michele: Yeah, but it would find a way. It’ll be available through public libraries.

Rob: Awesome. You have testimonials. You have a testimonial from Patrick McKenzie, says, “Deploy Empathy is far and away the best book ever read on user interviews.” You have a testimonial from my friend and yours, Adam McCrea, founder of Rails Autoscale.
If folks are listening in here at all, interested in learning about interviews, you should go check it out. It’s Deploy Empathy: A Practical Guide to Interviewing Customers Of course, if they want to hear you chat about this stuff as well as running your own bootstrapped company, they can check out Software Social. It’s the podcast you’ve been running for a couple years. Thanks so much for coming on the show.

Michele: Thank you for having me.

Rob: Hope you enjoyed this week’s episode. I’ve been trying to mix up formats with some conversations with founders, some solo episodes, some Q&A episodes, bootstrapper news, conversations with authors and people who are going maybe a little deep, because sometimes you hear a 30-minute conversation about a topic and you realize, I would love to listen to a 10-hour audiobook or read a physical copy on that topic.
Hope you enjoyed the variety of content that I’m putting out for you, and hope to see you back here again next week. I’ll be back in your ears again, as always, next Tuesday morning.