Episodes

Rob Walling:
Welcome to another episode of Startups For, the Rest, Of Us. I’m your host, Rob Walling, and in this episode I sit down with Wes Bush. He’s one of the key proponents of the product led growth movement as the author of two books on the subject, product led growth, how to build a product that sells itself and the Product Led playbook, how to unlock Self-serve revenue, and dominate your market with a tiny team. I wanted to have Wes on the show today because I think there are a lot of misconceptions and a lot of myths around what product-led growth actually is, and I wanted to talk with Wes, obviously one of the foremost experts on this topic, to really try to peel away myth from fact and really get to the heart of product-led growth, why you might want to consider it and when it’s a good idea when it’s not. 

Before we dive into our conversation, MicroConf Mastermind matching happens three times a year and it’s happening right now, applications close on December 4th, so just a week or two after this episode goes live. Masterminds have been critical to my development and frankly, my longevity as an entrepreneur, and I’ve been a proponent of them for probably 12 or 13 years. You can go to startups For, the Rest Of Us dot com and search for startup mastermind and find the first time that I ever mentioned it on the show. And it’s a long time ago because I became a believer in meeting with like-minded founders over time, a small group of founders who really followed my journey, almost like honorary co-founders. So if you’ve been feeling alone or isolated or lost or you’re just not sure what to do next and you need some accountability and someone else to be in the trenches alongside you, head to microcomp.com/masterminds. You pay a one-time fee, and we will match you up with other like-minded founders. And with that, let’s dive into my conversation with Wes West Bush. Thanks so much for joining me on the show. Thanks  

Wes Bush:
For having me. I’m excited to be  

Rob Walling:
Here. I’m excited to talk about product led growth with you for a long time. Listeners of the show, they know I have a love hate relationship with the term product-led growth because I like shorthand terms, even product-market fit, I feel the same way. It’s like, oh, if I say that, and we kind of both know what that means, it can be thousands of words encapsulating that. The problem is when I say product-market fit, if there’s 10 of us in a room, there’s 10 different definitions of it. And I feel like product-led growth is a bit like that and sometimes misused, especially by developers who just want their product to sell itself. Do you find that in your role as, I mean you’re an ambassador, you’ve written three books on product-led growth. Do you find that as well?  

Wes Bush:
Oh, totally. And one of the most viral tweets that I got, a ton of retweets and stuff, I was like, product growth, this is just an effing free trial. It was like, oh, okay. There’s a lot of people that  

Rob Walling:
Think that.  

Wes Bush:
So it was interesting.  

Rob Walling:
So I want to start by letting people know, you’ve written three books on product-led growth, so you certainly, of all the guests I’ve had on this podcast, probably the person who knows the most about it and who has thought the most about it. You have the product-led playbook, you have product-led growth, that title and product led onboarding  

Wes Bush:
Ley. John did write that one. I just wrote the first chapter, but  

Rob Walling:
Oh, okay. Well, thanks for the clarification. Yeah, no worries. I’d love to start by let’s do the best job we can at really defining what product led growth is. So I’ll kick it to you, you say what you think it is, and then I’m going to say like, well, is this product leg growth? Just so we can kind of tease it apart because I have my own internal definition of what is, I’m not even sure it’s right. So talk us through PLG.  

Wes Bush:
Yeah, and I think where a lot of people get confused is thinking of one dimension of like, oh yeah, that’s product like growth, whereas it’s a multi-dimensional thing that impacts your entire business. So here’s a fun way of thinking about it, is product-led growth is when you use your product to acquire new customers, engage them, meaning getting them to value and also monetizing. And you could also take that to expanding customers as well, but it’s where you’re using your product throughout your entire go-to market motion. It’s not just the free trial for people to sign up for free, but it helps them get the value. It also upgrades them and you can use it for expansion as well. And so at the surface, that’s what it is in its simplest way, and you’re talking about different examples of it, what it looks like. I’ll use some non-software as a service examples like Cologne, perfume, I think those are great examples of PLG and the real world where it’s like, Hey, I can try it before I buy it. And that’s really, I think a core tenant of it. It’s got to have that experience where, okay, I tried it for free, I like  

Rob Walling:
It. Oh, I like that example of cologne. I’d never thought of it. To me, when I hear PLG, I’m just like SaaS, SaaS and software,  

Wes Bush:
Right? Yeah,  

Rob Walling:
Self-serve freemium. These things all come to mind, but that’s kind of cool to hear an example of a real world product. So now I want to ask you some questions and say, is this product led growth or is it not? So my last SaaS startup was called Drip. It’s still functioning here in town downtown Minneapolis, and we had a self-serve trial credit card upfront, and for now, we had no free plan. Later we did. So we’re going to get a lot of examples out of this, but no free plan. Put a credit card upfront. You get a trial for whatever it was, 14, 21 days inside the app, there was a bunch of onboarding stuff, there were videos and kind of like, Hey, do this next, and you got emails to come and engage and do this next. And then if you got fully set up, then you got to choose if you canceled your trial or if your credit card got charged at the end basically. I always thought of that as just, to me, I just say, well, that’s self-serve SaaS that it existed since Basecamp is self-serve SaaS, and I had hit tail in 20 10, 20 11, that was self-serve SaaS, and it all followed that model. But would you include that under the umbrella of PLG?  

Wes Bush:
Well, here’s a qualifying question. First, we’re users that were signing up able to get to value for free. They could, in drips case, send a lot of emails and really feel like, okay, I got the value from the product, could do something interesting in the product that I couldn’t do before.  

Rob Walling:
And that was included in the trial itself. It truly was a free trial. And yes, they could do everything in terms of uploading subscribers, sending emails, getting the value that the product offered.  

Wes Bush:
So that would be an example where it’s like, yes, I would consider that product led. Now I’m going to try and confuse everybody here for a second and give an example of a company that does have a free trial but is not product led because it’s not always the same case. So this company is called ZoomInfo. A lot of people know about them. You can sign up for the free trial and it’s actually more of a request, a free trial. And then you get to the, okay, you fill out your info and it’s like book a call. You got to go through this whole experience and everything from the second you fill out that form is like convert, let’s convert them and let’s get them on the phone and convert them. So there was no value exchange, there was no kind of try before I buy experience. 

So you can actually have a free experience, free trial, but if every bone in that company is soon as you sign up is like convert them, convert them, convert them, no, that’s still just using a different mousetrap At the end of the day, what the biggest changes between what I would classify as more of a sales led company versus a product led one really comes down to, if you think of oversimplify, a go-to market motion, there’s really three things that go on in any business. There’s acquisition, there’s monetization, you got to make customers, and then there’s the overall engagement delivering on the value. Now a traditional sales like company, it’s like you acquire them, then it kicks off the monetization side of things. Then it’s about engagement, delivering on the value. The big change in product-led growth and product-led companies is just that middle piece. It switches. So it goes from acquisition to engagements. You deliver value before you purchase, and then it’s monetization. And so whenever you’re thinking, is this a sales led or a product led company, just refer back to that because that is probably the easiest way to kind of see, oh, okay, is that truly your product led company or not?  

Rob Walling:
So it’s engage, monetize or swapped is what you’re saying?  

Wes Bush:
Exactly.  

Rob Walling:
That’s interesting. Okay, let me ask you this, then there’s a company called Spark Toro. Have you heard of it? Rand Fishkins company?  

Wes Bush:
Yeah, yeah, definitely.  

Rob Walling:
And I’m an investor there, friends with Rand, they have a try it free button on their website. When you click it, you do self sign up for an account, your username and password, or I think you can authentic through Google. And then what you do is you get a, it’s a really limited free plan. In essence, you get five searches a month, so very limited and I believe you only get the top three or four results or five results when there might be hundreds. And if you’re a paying customer, you can get all the data. And for folks who don’t know about Spark Toro, the H one is how do you get better ROI from content, SEO, social PR and performance marketing smart to is basically an audience research tool for marketers. So with that stage set of how I just described kind of this free, it’s even a stretch to say it’s a free mean plan, it is quite limited, but what is that? Is that product-led growth? Definitely not. They’re not doing sales. So does that by default mean their product led growth?  

Wes Bush:
Yeah, in theory, that’s the free motion they have that. I think that’s definitely in the right direction. The only thing where I would be like, okay, is that the right thing they’re giving away free is could someone sign up for that and feel like they genuinely got some insight that was really meaningful to them? Now, if they can check the box on that, it’s like, Hey, that’s a great free motion. And yeah, I would still classify that as product led, you’re giving away free, but what separates a great free model from one that’s just mediocre and not many people convert at the end of the day is it all comes down to what is the outcome of that free product? Does it have one very similar products that we’re working with? One of our clients, it’s for trade opportunities if for export import businesses, let’s say are trying to find the best baati rice exporter, and it’s like it shows the database, you know what? 

They only need to find one. They need to find one deal that’s really incredible. And what we decided to give away for free is like, hey, finding that person finding that is free now if you want to contact them, then you got to upgrade at that specific stage. Now it doesn’t seem like it’s a lot, but it’s enough. It’s enough for them to fill, they walk away from that experience saying, Hey, if I need to find another export import business, I know exactly where I got to go. And same thing with Spark Tora. It’s like as long as they find out of those top four or three options, something’s meaningful, then it’s enough. But that’s the tricky part too, because if you search and you waste those five searches on something, you don’t find anything useful, then people are like, this product sucks.  

Rob Walling:
And I kind of asked a question without asking a question with my last prompt, which is sales led is what maybe the Jason Lemkin playbook, I think of it where it’s just a lot of outbound and it’s just this, you build up this big sales force, the boiler room as they say, and you obviously have inbound, you try to do inbound, and anybody who comes inbound, it’s like do a demo, put ’em through the sales funnel versus product led. What you’re saying is, well, that’s more of the product provides the value. I feel like that’s a false dichotomy. I feel like there’s more nuance to this whole story than that. And in fact, coming back to Drip, we did both of those things. Now we did outbound, it was not a huge motion, but we had a ton of inbound. I’m a better marketer than a salesperson, let’s put it that way. 

So we had a ton of inbound just from all the stuff we were doing. And what we noticed was on the lower end, if someone’s going to pay us $50 a month or a hundred dollars a month, those our cheapest plans had to be product led. We weren’t going to do a demo, just the A CV. The LTV was not there for it. But we’d see someone come through and it’d be like, oh, this is someone, it’s a website that that if I said the name of you would know. And it’s like, well, I’m sure they have a million subscribers and they’re probably going to pay us $3,000 a month. So then we would reach out to them and we’re like, we need to get on the phone with you. We know that we can help close the deal. So I call that a dual funnel now where there’s lower end and the higher end and you handle ’em differently. So I guess were we sales led? Were we product led, or would you just say, well, you’re both,  

Wes Bush:
Yeah, that’s both hybrid and that’s great motion to have if you can do that. If you’re only product let’s say is like $10 per month, something like, it’s like, okay, it probably doesn’t make sense even if that company did sign up because there’s not that expansion opportunity where you can make it work. But no, I love those motions and I think that’s using the best of both worlds where it’s saying, Hey, if you’re a small company here, self-serve, do that. And if you’re a bigger company, hey, there’s a different approach. And we could actually maybe even position that instead of just like, Hey, you want to hop on a call with me? It’s like, Hey, I know you have a big list. How can we create email marketing strategy together that is going to be so much better than what you’re currently doing? And they’re like, man, this drip company’s really looking out for me outside of just looking for another place to send emails. They’re a value added partner here, absolutely like 3000 per month. That seems like a no brainer deal. To get this advice to  

Rob Walling:
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So let’s talk a little bit about product-led growth. And I think a lot of people think freemium, you have to have freemium and you’re basically like, no, a free trial, as long as you get value out of the product and that’s engaging in monetizing, that is a qualifier. You can still be included in the PLG Hall of Fame if we’re a paid or a free trial that makes, oh no, it’s the monetization has to be after. So it can’t be a paid trial,  

Wes Bush:
It  

Rob Walling:
Has to be  

Wes Bush:
Free. So the free model you choose actually doesn’t matter. So if you look at billion dollar plus product companies, you’ll find every company with whether it’s a free trial, a Freeman model usage-based trial, they’re all out there. What does matter though is deciding what is the main outcome of your free model. So what could you actually do when you sign up for that free product? And is it actually something that feels like it’s tangible value for that user? A lot of times I’ll send it for a free trial as an example, and you click around and you do a couple things. You’re like, Whoopi, I can’t do anything I couldn’t do before. There is no transformation. And the best product companies, they all have somewhat of a transformation where it’s like, Hey, before chat GBT and after chat GBT, it’s like it is pretty clear there was a difference there in productivity and all those other things. So you got to have that. You got to allow your product to shine in that free experience. And so I could go on a whole big tangent, Rob, go through how do you actually decide what’s to giveaway for free? But I just wanted to point that out that the model doesn’t matter as much as people think it is, it’s what that outcome is. And deciding what that is is really the tricky part.  

Rob Walling:
It’s interesting because with Bootstrappers, which the majority of this audience is folks who are bootstrapping are mostly bootstrapping, frankly. I mean there’s 20 or 30% who want to raise funding or have raised some type of funding, but it is just the non venture track. SaaS founders is kind of the listeners of this audience. We’ve just always done product led. That’s just what we did from the start. Because I wasn’t good at sales demos, I wasn’t going to do a bunch of outbound, my SaaS 2009, 2010, 11, it was marketing. And since I was charging early SaaS companies, I had with 10, 20, 40 a month, so really low end and then 50, a hundred, 200 with Drip. I couldn’t afford to do anything but build onboarding into the app because I had to operate at a scale that it just required that and I wasn’t going to be able to manually onboard. So I acquired through SEO content, a bunch of other demand gen, and then I engaged in the product because I was a developer. And that’s the only way to automate it to the point where I could have 500 or a thousand customers in order to get to tens of thousands of dollars a month in MRR and then of course monetization. It was always just a free trial to monetize. So it really sounds like the default for most bootstrappers is probably going to be product led. Is that accurate?  

Wes Bush:
So I think the mindset of them wanting to go this direction is, but then there’s very few folks where that is like, Hey, this is what I want to do, and I’m actually seeing really good success with it because I think folks like yourself where you have just naturally done it is actually really rare. There’s like for every one of you, there’s probably 10 others that are like, yeah, I want that too. Yet when I try and do the product led thing, I suck at it or it just doesn’t work out the way I thought it was. The free to paid conversion rates really bad and because users can’t get the value, they just don’t upgrade. So there’s a host of other reasons why it usually doesn’t work. But yeah, I’d say generally speaking, they do want that specific direction because they see that is the most efficient way to scale this business without adding people and more cost to the equation.  

Rob Walling:
And I think one of the annoying things for me with PLG is that people have misused it, and I see makers and developers being like, it means I don’t have to market because the product just sells itself. And it’s like, that’s not my, I don’t think any product really sells itself. I mean, again, it sounds like I’ve been running all my SaaS was PLG, and yet it never sold itself. I marketed the shit out of that stuff. I drove a lot of traffic, I did a lot of split testing, a lot of conversion optimization. I optimized the hell out of the funnels, the onboard, all of that was a massive thing before growth hacking was a thing. I was doing all of it. It was like, well, I know I want these numbers to go up. I know I want trial to pay to go up. How do I do that? Well, I got to get more people onboarded. How do I do that? Well, I need more people to install the JavaScript snippet on my thing, so how do I do that? And I, it was just a very logical flow. But do you feel, is it just me or do you feel like some devs, maybe especially builder types, maybe misuse the term?  

Wes Bush:
Oh yeah. And I think the biggest reeducation a lot of times do it product-led is just the fact that it’s like, Hey, you still have to market this. You still have to sell it and have really good understanding of what that looks like. There is very few companies I’ve interviewed hundreds of product-led founders where I’m like one out of maybe 300 has a situation where their product does market itself really, really well. But that is because they were super intentional about how that product was going to interact with other people. Mixmax is perfect example. When I was interviewing the CO Olaf, he was like, you know what? We have a $0 cost per acquisition cost. I was like, this is pretty fantastic. But it’s like you send an email powered by mix. I was like, oh, you got this beautiful growth lever, external virality. How many companies have that? Most companies just have internal virality where it’s like, Hey, you share this with your other employees and other users. That’s not going to get you that crazy marketing growth and a user signups that you want. But every once in a while you do find a company where it’s like, that really worked for them and you just hope that that might be your company.  

Rob Walling:
But as you’re saying, it’s one out of hundreds. Slack was used often as an early example, PLG. Would you say they’re similar because it did feel like there’s a viral loop in Slack that kind of became associated with product-led growth means that you infiltrate an org and then they invite a bunch of people and there’s virality and it doesn’t sound like that’s what we’re talking about. It sounds like they had that extra bonus of being one out of a few hundred where it could kind of market itself.  

Wes Bush:
Yeah. Well, slack had really fantastic internal virality. You just think of the natural side of like, okay, Rob’s not on this installation. Let’s add Rob. And it’s like, sure, he is on our team, so why not? And it just naturally gravitates towards that. But since it was such a good product and did it so much better than email in a lot of ways, then it just naturally grew out from that, from word of mouth. But they did invest. If you still look at their p and l, majority of their expenses are still going towards marketing and sales, which is fascinating to see that. And maybe that shouldn’t be the case right now since their acquisition and now their product has just kind of stayed stagnant. But it’s worth considering, yes, invest in marketing and sales. It does not mean being a product of business. You don’t have to do that.  

Rob Walling:
I think the probably the biggest point I want to drive home today for people listening is I think there’s a lot of perhaps misunderstanding or miscommunication around it. So then it begs the question, what are the big benefits of product led growth as opposed to sales led? The big benefits that you see,  

Wes Bush:
It really just comes down to do you want to have a leveraged business where it’s the asset you’re building is the product As you scale up, you get more and more efficient, you get more profits, can afford to have a higher revenue per employee, all that fun stuff. Or do you want the people to be the machine in the business? And so many folks, it’s like, actually, I want more leverage in the business. And so that’s the biggest thing. It just comes down to leverage at the end of the day.  

Rob Walling:
And you mentioned to me offline before we started that you actually have something you’d like to give to the listeners. What do you have?  

Wes Bush:
Yeah, so I just wrote the product-led playbook, which at the very beginning of this book, I’m like, Hey, you know what? This is not the book for you. If you don’t know if product-led growth is right for you. That’s the first one I wrote. Product-led growth. This one is literally just here’s how you actually do it. It goes through nine core pieces that you got to implement inside your business, like onboarding pricing. It just gives you the exact frameworks for how to do it and the templates. So it’s all free for you product led gift.com, and you can just get that for free. And that’s the entire book we held. Nothing back there.  

Rob Walling:
Awesome. Well thanks for that. I hope folks check it out. So I have one or two questions for you before we wrap up. And I think I want to frame, because I’m looking at an outline of the book, I have a table of contest and stuff in chapter six, how to decide what to give away for free versus what to monetize. It’s such a good conversation. And frankly, this is a common one I have with my investments. I’m invested in 200 and I think it’s 212 SaaS companies through TinySeed and then individually. And so I see the gamut, freemium or not of free trial, of not of sales led, product led, like the whole deal. And frequently I’m pulled into conversations. A lot of it’s pricing strategy and then it’s currently what we have, what should we, and I’m always like, I have my own kind of mental pattern matching framework, but I’ve never written it. I don’t even know if I could put it into words. So I’m curious. I know you can’t read the whole chapter six, but what’s the base framework there?  

Wes Bush:
Yeah, I think this would be more fun too, if you tell me about a company that really well that they were struggling with this, and we can workshop and as people listen, this will be like five minutes and we could go through that framework.  

Rob Walling:
Cool. So is this a free trial or is it freemium in this example?  

Wes Bush:
No, it could be anything. You pick the company, I’ll use the framework and then people will kind of learn through that.  

Rob Walling:
Alright, so let’s talk about frequent podcast guest, Derek Rimer. He runs a company called Savvy Cal. They are a competitor to Calendly and they have a free trial or it’s a 30 day money back guarantee. Let’s pretend they had a 30 day free trial because they’re PLG, but they do have a money back guarantee. So that’s in essence what they’re trying to do. They do not have a freemium, a free forever  

Wes Bush:
Plan. So thanks for that. I got their website pulled up and now who is their ideal user? The person they feel like, Hey, we got to just target this person. They’re the best people.  

Rob Walling:
So they actually have a couple, my understanding, or there were early adopters that were listeners to this podcast, that type bootstrappers and founders of Bootstrap companies. I think they made a shift as the audience grew or as their customer base grew and they started getting calendar power users, which I think are a lot more salespeople.  

Wes Bush:
So first off, this is why it’s so hard, and this is for everybody listening. If you don’t know without a hundred percent confidence who your ideal user is, and I’m on the website too, it’s not just you, Rob, it’s not clear who is this for? I don’t know. Because in the world of calendar booking systems, it’s commoditized right now. There’s tidy Cal if I want to pay 49 bucks once. Sure. And there’s a ton of different options out there and book like a boss, they have a very specific persona on service professionals and stuff. So that would be the first kind of task I’d be like, okay, get really clear. Let’s go with a sales person though, because that’s more fun. And so let’s say it’s salespeople now, what is ultimate success for that sales person? We got to get super clear on that. What would you say that looks like, even if we’re just making it up on the spot a bit  

Rob Walling:
Ultimate success, that it’s a complete super seamless booking experience for their prospects.  

Wes Bush:
And now if we think about this space, unless you’ve been living under a rock, you’ve probably heard of Calendly. So what is the unique sauce that they might bring to the table that’s like, Hey, this is unique, differentiated for people that are sales reps that are trying to just book easier?  

Rob Walling:
Yeah, it’s not on the website now, but the early positioning of avial was most booking links. There’s a power differential and it can be offensive to send your booking link because it’s like, oh, now you put a bunch of work on my shoulder,  

Wes Bush:
Right?  

Rob Walling:
Yep. Oh really? Now I got to click around, blah, blah, blah. And that was Avi Cal’s early positioning was, so I’m going to go with that. But the differentiated between them and Calendly is the booking experience itself is very much does everything you can do with amazing UX to remove that feeling.  

Wes Bush:
Okay, so let’s say for the salesperson, we have, I’m pulling up a stat out of thin air here, but it’s 30% more meetings booked with your ideal prospects just because the experience is better and everything else. So that’s success. We’re trying to gear people towards that. Now, if we think about making this a game, this is where we get to the model part. Let’s divide this up into three levels. There’s your beginner level, which is, think about it as the newbie. They sign up, they’re like, oh yeah, let’s go through this, see what it’s all about. Then there’s your intermediate level. This is your first paid pro plan, and there’s the events level, which is your most expensive stuff. So for that initial beginner one, what might that beginner outcome be? Is it enough for it to just be, Hey, book one meeting with the prospect? Is it five meetings, 10 meetings? What do you think that might be for them?  

Rob Walling:
Probably one. I think it’s just that initial meeting.  

Wes Bush:
So it could literally just be one meeting. Now if they do a test or something like that, that might be a bit tricky where it’s like, okay, they did the test meeting on their own.  

Rob Walling:
Oh, I see. Oh, I was thinking one meeting with each prospect. You’re just saying, yeah, the absolute value. At what point would they, huh, that’s interesting. Let’s say they booked five meetings, five prospects book meetings or five book meetings. Overall, you can do that with any, there’s no differentiation. You can do that with any calendar software. So it would almost to me be like, the moment that someone complimented me and said, holy, that was a really great booking. That would be the moment where I’d be like, oh, someone noticed that it was different. I dunno if that can be a qualifying event or not. But  

Wes Bush:
Yeah, and this is the tricky part, right? Because it’s the special secret sauce. Whatever makes your product shine needs to come out in that free version. And if it’s just meat game one meeting booked, so what? It doesn’t pass the hurdle. And so this is one of the challenges when you’re thinking about what to give away for free if you’re in a very saturated space with a lot of competitors that already have really good free motions, and so you have to be creative. What is that new experience? And so would, like you said, it has to go back to did they, maybe it’s a customer or somebody that booked that meeting, have that experience where they said, wow, this is fantastic. Could we track it? I would start going down that rabbit hole and say, okay, it’s in this direction. We don’t know what exactly. 

We got to validate what that looks like, but it’s something when they have this experience, they book 30% more meetings that they can feel the tangible difference of. When I was using Calendly, I was getting blocked. A lot of times people were in booking meetings, they felt bad about it. Whereas with Savvy Cal, now I have a story, and that story is now actually going to be in their head, the user’s head, and they’re going to tell themselves that story when they’re like, this is why I’m buying Savvy Cal today. Because it makes so much more sense than the other alternatives. They just don’t get me like that. But if you start off with that vague ideal user, it’s so much harder because everything that you give away for free should be tied back to who is that ideal user? What is that ultimate success? And that’s how you build an intentional free model, not just give away random,  

Rob Walling:
Right, right. Just pick it off a dartboard. That’s cool. And my apologies to Derek Reimer, who certainly is hearing this and absolutely cringing at all my answers. How when you’re the founder of the company, he knows all the answers to these, and I’m kind of like, I’m going to make this one up. I’m not sure if it’s exactly right. So no, that was super cool, man. Thanks for leaning into the thought experiment there. If folks want to check out the book, obviously product led gift.com, or they can head to product led.com/playbook or frankly on Amazon, though your book is available in all the formats, folks would want to find it. Wes Bush, thanks so much for joining me on the show today.  

Wes Bush:
Thanks for having me.  

Rob Walling:
If folks want to keep up with you on X, Twitter, u are, Wesco bush and product led.com, if they want to check out all the stuff you’re up to. Thanks again, man.  

Wes Bush:
This is fun.  

Rob Walling:
Thanks again to Wes for joining me on the show today, and thank you for listening this week and every week. This is Rob Walling signing off from episode 741.

Rob Walling:
Welcome to Startup For, the Rest Of Us. I’m your host, Rob Walling, and in this episode I sit down with Dr. Sherry Walling to talk about our new book Exit Strategy, the Entrepreneur’s Guide to Selling Your Business Without Regret. The Kickstarter for this book launches today. If you want to back it or you’re interested in checking out the tears and seeing all the amazing copy that Leanna Pat wrote for us, head to exit strategy book.com. I hope you’ll consider backing this book. I talk about it in the conversation, but I’m really proud of the end product of what we put together, and we put a ton of time into it. We interviewed a lot of entrepreneurs across different business types. It’s not just about selling SaaS, it’s about selling for the most part, any kind of business. And I’m really excited to get this into the hands of folks like yourself, entrepreneurs who may be thinking about selling, who may be in the midst of selling or who have sold and are trying to think about what’s next. Or even if you are not thinking about selling today, having this knowledge in your head as you build your business can only help you. So exit strategy book.com, it’d be amazing if you decide to back the Kickstarter. And with that, let’s dive into our conversation, doctor, Dr. Sherry Walling. Thanks so much for joining me on the show.  

Dr. Sherry Walling:
My pleasure.  

Rob Walling:
So we wrote a book, another book, this one’s called Exit Strategy, and I think a couple clarifications right off the top. It’s not just about selling SaaS, it’s about selling any type of company. We interviewed folks who sold agencies.  

Dr. Sherry Walling:
Yeah, professional service companies, a sort of chain of gyms, brick and mortar businesses. This book was really born out of my conversations with clients over the years who said things like, this is the hardest thing that’s ever happened to me, or I feel like I’m going through a divorce. And that’s not limited to SaaS. The challenge of this process is pretty universal for entrepreneurs going through it.  

Rob Walling:
And since the book focuses so much on the mental, the emotional, the psychological, the without regret part of before selling, thinking through should I sell, what’s it going to look like during selling? Oh my gosh, this is a pressure cooker, as you said, it’s the hardest thing I’ve ever done. And then the after recovering working for the acquirer, what to do next. Those things apply broadly across pretty much any type of business that is not just a, if you have look, have a little 10 K side project or some tiny little thing. Is it this agonizing? No, but this is about having a bigger exit and maybe having a team and that kind of stuff. And that applies to a lot of different types of businesses.  

Dr. Sherry Walling:
It’s about the story of building a business that becomes very valuable and sellable. People offload apps here and there or do things on a pretty small level, but this is the story about when you build something that is part of you and you put all of the blood, sweat, and tears into making something that’s very valuable, and then what it feels like to go through the process of selling it, of releasing it, putting your life together afterward.  

Rob Walling:
And there were a lot of really good books about selling your company. John Warlow has one art of selling your company to Andrews wrote before the exit Bo Burham wrote Finish Big. So I guess what’s our unique take? It’s two part question. Why did we decide to write this in the first place? And then what is our unique take that you think we bring to the topic?  

Dr. Sherry Walling:
I mean, I think the pairing of you as a serial entrepreneur and me as a clinical psychologist is really unique. I think there’s a lot of nuance and mental sort of analysis in this book that is different, or at least we are adding something pretty significant to the conversation when we think about the kinds of processes that people are going through when they’re going through a major transition in the middle of their professional lives. You’ve also been on the front row of hundreds of exits at this point in your work in TinySeed and through your connections with MicroConf. And so I think the number of reps that you and I have done together from very different perspectives is unique and really shapes what we’re offering in this book.  

Rob Walling:
And and I, it felt like we were having similar conversations over and over where you were like, Hey, one of my clients is thinking about selling or going through the sale process or has gone through the sales process and this is happening. And I’m like, well, didn’t that happen to someone else? Or that did happen to a friend of mine that I know through MicroConf. And it was like we would get asked questions of like, well, what books should I read or what resources are there around this topic? And it kept being like, well, obviously there’s these good books, but they don’t have maybe the very specific opinions that you and I have about how to try to do this well from a mental health perspective and realistically without Regret is in the subtitle for a reason.  

Dr. Sherry Walling:
I think what’s also interesting is that not only have we been in this sort of consulting seat in las, but we’ve been through an exit. You’ve been through it directly with Drip, and I’ve been through it as your partner, as your significant other. And I think that’s a piece that is often overlooked in business books is the relational impact of some of these transitions, not just on the founder, not just on the founder and their team, but on their family. And this book isn’t a heavy, heavy focus on that, but it is woven through in its, I think really shaped by our experience of having done the reps ourselves and then done them on behalf of other people.  

Rob Walling:
Yeah, there’s definitely a running thread through this book of A, how difficult this process actually is, and B, how much of a toll it takes on not only the founder, the entrepreneur, but on the people around them, their family, significant other, and so on,  

Dr. Sherry Walling:
And that it doesn’t have to be that way. So the default setting is this is hard and can be surprisingly destructive, but it does not have to be that way. So I think that’s the point of the book is to help offer the ability for people to open their eyes, look to see what’s happening, do some self-assessment, and then have some tools to help make more aware and more intentional choices about how they go through this process.  

Rob Walling:
And if someone’s starting a business today and they’re not going to sell it here in the next 12, 18, 24 months, I still feel like there’s value in experiencing this journey alongside the entrepreneurs that we interviewed for the book. What did we enter? 15 people, 20 people. I mean, we did a lot of, it wasn’t just out of in my head. I mean, we did a ton of legwork to pull it in, and there’s a lot of stories, a lot of quotes.  

Dr. Sherry Walling:
I think this book is actually about how to have a healthy relationship with your business, and that’s where it’s relevant to anyone at any phase of their entrepreneurial journey. I think it would be a super great book to read at the beginning because it talks about this balance between going all in and being very careful and very attentive to what the business needs from you and how to protect it well, and how to think about your team and also on the other end of the spectrum, this de-identification between your selfhood and the business that you’re running. And if you can strike that balance well early in your business, I think you are just set up for success in a lot of ways, not just in your exit, but in your mental wellbeing and balance throughout the course of the journey.  

Rob Walling:
And the book’s not out yet. And the reason we’re talking about it today is the day this episode goes live, our Kickstarter for this book goes live. And so folks can head to exit strategy book.com and there’ll be a link there where they can go straight to the Kickstarter page and they can back the book. We’re going to have it in three formats. We’re going to have a hardcover run like I did with SaaS Playbook where we have an offset printer. It’s just amazing. It’s like the same printers who print for any big publisher. And so the quality of the book is just really outstanding.  

Dr. Sherry Walling:
Do you have it there with you? Yeah, I was like, I should have it in my, this is  

Rob Walling:
A digital, I have a digital copy of it that is a print on demand version, but it’s so neat to finally have it here in my hands. And it’s a meaty book. It’s a couple hundred pages, right? 250 pages or so. But with the Kickstarter, we’re going to have an audio version that you and I are going to read together. Isn’t that  

Dr. Sherry Walling:
Sweet? It’s going to be adorable.  

Rob Walling:
It’s going to be so adorable.  

Dr. Sherry Walling:
I’m sure we won’t have any arguments about it.  

Rob Walling:
Nope. During I’m going to leave you, Josh, please edit a lot of any arguments out, but I do like to riff on the audiobook. We haven’t recorded it yet, but that’s something I’m looking forward to doing with you is kind of riffing on different things. And then of course we have an electronic, like a PDF epub version, but in addition to that, we’re offering things that we’ve never offered before, right?  

Dr. Sherry Walling:
All kinds of opportunities to hang out with us either in some q and a sessions where you can come and ask questions about your business, your exit, things that you’re thinking about to one or both of us. I think we have an option where both of us are involved all the way to the opportunity to come to beautiful Minneapolis in the summer and do a founder retreat with the two of us together. So the dates and all the details about that are on the site, but I am personally really excited about doing it that way and the kinds of interactions that it allows us to have with people that we might not necessarily bump up against in our day-to-day lives.  

Rob Walling:
Yeah, I would agree. At one point on this very podcast, it was probably 2021, I did a call for anyone who is in the middle of an exit or really on the cusp of an exit. If you’re thinking about selling, just email me and I will send you a 20 minute zoom link and I’ll zoom with any and everyone who’s going to do it. And part of that was I wanted to talk to more founders who were doing it. But the other thing is I said, this is one of the most important moments slash transactions of your life. And I talked to so many people who were like, I’m going to sell this. I started this kind of listening to the podcast and thought it’d be a little side project, and I got an offer for $9 million, and I was just like, what? And so I had these great conversations and part of those anonymized and everything going to the knowledge bank of writing this book, but I realized through those conversations even more the need for this. You and I’ve been talking about writing this book for three, four years at this point, and it took us, what about a year and a half, I guess, to get it all put together?  

Dr. Sherry Walling:
Yeah, it was such a fun process. There’s obviously lots of different ways to write books, but because we spend so much time talking to each other, podcasting and things like that, I really enjoy the process of having a really detailed outline and then going chapter by chapter and basically recording audio of it and transcribing that and then turning that into the written word. So I think it’s a fun way to collaborate together. And so there really is a mixture of both of our voices in really every chapter, even though some chapters are more based on my expertise and others are based more on your expertise, there’s still this weighing in and question asking of the other person, which I think helps it to be a much better product because you have thoughtful questions that are guiding the development of content.  

Rob Walling:
Yeah, I’m super, super proud of this book. I think it turned out really well, potentially, I hate to say it, but almost better than I could have expected when we started, which is how I like  

Dr. Sherry Walling:
Wow, look at you in the low expectations.  

Rob Walling:
I know, but I like having, I don’t know. I like it when it’s an end product and it’s like, yeah, I know this is dialed in. Something that I really like about the book, as I said earlier, there’s the before, the during and the after your exit. Those are kind of the three sections we have. And one part of the before chapter two, when is it time to go? And we look at external and internal cues for thinking about when you may want to exit. And I remember putting this chapter together, and one of the things that is interesting is that you and I have seen so many people sell that these things just kind of rolled. It was like, let’s brainstorm. Why do people sell? Boom, boom, boom, boom, and then run this list by other people I know who’ve sold. Are we missing any of these? So I feel just really good about the list we put together. Some of the external cues we mentioned are, you’ve built something amazing, the business needs more capital, you’re no longer the best person to run the business. The competitive landscape shifts a change in life status, and another opportunity arises just to give folks an idea of the kind of, and then we dive obviously deep into each of those and how those might come about and how to think about them if you’re in that situation.  

Dr. Sherry Walling:
And also assessing what are helpful motivations to sell and where are, so we talk about some of the internal cues like existential restlessness or energy levels, some even burnout, and when maybe those things lead you to want to sell because you want out, but they’re not always the best for you in the long run or the best for the business. And so thinking through just how to be an observation, an observer of your own mental internal process, and then what to do if you maybe want out, but don’t necessarily, it doesn’t make sense to sell right now. So we sort of dive into some of those options.  

Rob Walling:
And in typical Dr. Walling fashion, this is something I’ve never done in my books. We have making it real at the end of each chapter where it’s like, look, I just told you a bunch of really interesting things and now there are questions to think about and to journal and to take action on. So  

Dr. Sherry Walling:
In my last book Testing two worlds, I worked at the traditional publisher and they really pushed me on this. They were like, your stories are great. Thank you for the wisdom, but what do we do about it? And I, frankly, the challenge of helping people really apply it to their specific situation. So it’s all fine and good to absorb content, but if you can’t do anything with it, then it’s really not in your best highest service. So we’ve worked pretty hard on those sections to give you at least some journaling prompts and thoughtful questions that will help you to go deeper with some of the content that we’ve presented.  

Rob Walling:
And throughout the book, we try to set expectations of what an exit might look like. And I find that we were repeated over and over so much that eventually we had to take it out at a certain point of we just can’t keep saying this, but this is really hard. This is going to be really hard. Isn’t this really hard? That really hard? That felt like a message of the book. Why do you think that we have to say that so often?  

Dr. Sherry Walling:
It’s such a dream outcome. I think the stories that persist on social media or Twitter of the founder who sells for a huge bucket of money and rides off into the sunset or starts a farm in Austin, but it has this glow to it, and I just think that it is kind of giving birth. It has a great outcome. Babies are great, but it’s a grizzly bloody messy process. And because we’ve so glorified the end result, I don’t know that we collectively as an entrepreneurial community have told the truth about the process.  

Rob Walling:
And I think, I know for me, a chunk of the entrepreneurs that I talk to, the founders I talk to who are about exit, I’ll tell them it’s going to be really hard. And I’ve had people tell me, yeah, not for me. It’s not going to be hard for me and then come out together.  

Dr. Sherry Walling:
I got it. I’m not attached to my business. I’m rational. I’m objective.  

Rob Walling:
This won’t be hard.  

Dr. Sherry Walling:
I’m not that worried about it.  

Rob Walling:
I’m so prepared. And then come out the other side like, oh my gosh, you were right. And it’s like, I know it really is as hard.  

Dr. Sherry Walling:
It always, it starts relatively simply. I mean, the wonderful story is somebody gets an LOI and you agree quickly on the terms and it just feels like it’s going to be smooth sailing. But inevitably there’s some series of disruptions in the deal that require sleeveless nights and long conversations with lawyers. And it’s just the way it goes  

Rob Walling:
Inevitably is pretty much my experience. And the interesting thing is as entrepreneurs, we do hard things and we think as you said, that it’s like we can logic our way out of it or that we can just, we’ve done hard things in the past and I know that I can do it, but you get in this position where it’s like, all right, I’ve signed this letter of intent for $10 million and we’re going to close in 45 days, 45 days. I could do anything for 45 days. And then suddenly you find that you’re like, whoa, there is a lot of uncertainty here. And whoa, there are a lot of people that are kind of pissing me off here with the pushback on the thing and asking for the stuff. And you start to get in your own head. People start sleeping. There are entrepreneurs who you can’t sleep so stressed about it. And then you get towards the end and everything’s up in the air still.  

Dr. Sherry Walling:
And then it’s not 45 days, it’s 50 days, it’s 60 days. It’s the lawyers on vacation. Yeah.  

Rob Walling:
And so that is something we talk about. We have, I mean obviously there’s what, 14 chapters in the book and only two of them are really about deal structure and deal points because again, there are really good books like the Art of Selling Your Company that cover that type of stuff. So the vast majority of the book is thinking through whether to do it and how to do it well, and then how to be on the other side and ask what’s next. But I really like in chapter seven, it’s called collateral Damage, minimizing negative Impact. And we talk about minimizing negative impact to your mental health, your physical health, your family, your team, your company, and the deal itself. And then we have specific strategies for that. It’s learn how to time travel, take on an exit project, go on that vacation, let your partner in on your emotional state and other things. A lot of those came from you. I mean, I was pulling out the, here’s all the collateral damage it can do, but really the strategies for how to minimize those or how to stay healthy, a lot of that comes in your voice, a lot of your work.  

Dr. Sherry Walling:
It really is a challenge to construct some internal buffers around your own anxiety, especially for entrepreneurs who have often used their anxiety or their agitation as fuel to get things done. But in this process, you can only get done what is on your to-do list in that moment. And then you are waiting on all of these other people, on the buyer, on the broker, on the whoever else. And so it’s a really abrupt, difficult lesson in holding agitation and anxiety when there’s nothing really effective to be done with it because there are things that are happening or that you have to wait for that you can’t control. And so a lot of these strategies are around what to do with that energy, frankly, how to not let it eat you alive and not let it spin out of control in a way that hurts the people around you and leaves you trying to push the deal forward or being thoughtless or reactive because you are uncomfortable and agitated.  

Rob Walling:
I like that you bring up that point of there are things outside of your control that you just can’t do anything about. Because again, as entrepreneurs, as founders, we start companies, some of us because we want to control everything. And suddenly you’re in the middle of a process where it’s like some clown shoes, lawyer on the other end, as you said, is on vacation or is taken four days to turn things around and you’re like, dude, this is $10 million. This is the biggest thing of my life. This is my life. But it’s just another day for them. It’s just another deal.  

Dr. Sherry Walling:
Just another email.  

Rob Walling:
And we talked through in chapter 10, we have the 3:00 AM what ifs. And all of these quotes are things that you and I have either heard from entrepreneurs or we heard in the interviews as we talked to entrepreneurs, things like, what if my team falls apart? What if the deal falls apart? What if I’m not up for this? What if this deal is my only chance? What if I take a bad deal? And there are more, there are a lot of 3:00 AM what ifs. Another thing that I don’t think is talked about enough is life after the exit. We have a chapter called Purgatory that is sad. It’s about working for the acquirer and reporting to a boss. You lose control of your team, of your company, but there are also a upsides to it as well. And that was something that I am really glad we covered.  

Dr. Sherry Walling:
I think this question of life after the exit is maybe some of the content that I’m personally most proud of that feels like a real contribution to this conversation around exits that I just haven’t seen dealt with as thoughtfully and as carefully as we’ve dealt with it. And I think coming from my life as a psychologist, there is this deep appreciation for what it means to be going through a really significant life-changing developmental disruption at a time when your peers aren’t going through that exits are such extraordinary events, they’re just not commonly occurring. And so it’s like getting divorced or sending a kid to college or watching your parents pass away. It’s this major reworking of your identity and what you do during the day and what matters to you. But you’re not doing that along with your peer group. You and I know lots of people whose kids are going to college because that’s the age group that we’re in. And so this idea of going through a major developmental transition alone is pretty unusual and kind of extraordinary in the human experience. And so I think giving people some grounding in that, some understanding and some perspective about why this reworking of your entire life midstream is so challenging and then what to do about it, how to avoid the isolation and how to avoid the kind of spin out that can happen when people lose perspective about just how significant this transition is.  

Rob Walling:
Yeah, I like that you call that out. A lot of people have kids who go to college. A lot of people have a parent who passes away. A lot of people get married, get divorced, have children, whatever. There’s a lot of events that completely can turn your life upside down. And so few people sell a company and so few people, I mean almost no one else is selling a company when you are. And what’s interesting is during the sale, again, there is only so many people you can talk to. We do have a whole chapter on support team and how to put together people to support you, but afterwards, there can be this sense of, shouldn’t I be happy now? Hey, my company was really stressing me out. I don’t have to work on that anymore and I have this huge pile of cash in the bank, but now I’m unhappy. We have this expression whining on the yacht. It’s like you can’t just go on Twitter and say, man, sold my company for $10 million. Life sucks. And I’m so sad every day  

Dr. Sherry Walling:
I’m so bored and lonely.  

Rob Walling:
Totally. Even if that’s really the case. And we talk a lot about that of first day of the rest of your life, like how to recover from this and how to find a peer groups. There are other entrepreneurs who’ve gone through this  

Dr. Sherry Walling:
And to re-anchor into meaning you’re getting a second act, you’ve built something, you’ve gone through the whole journey and then sold it. And it is an immense opportunity to use the phrase that from David Brooks to climb a second mountain to do something else that is interesting and meaningful and valuable to you and to your family and to the world around you. But people have a complicated relationship with that. Sometimes people rush, they can’t tolerate this in-between space, the patients of really considering what’s next. So they buy a company before they’ve finished selling their other company, we tell this story in the book, or they get so churned around about what to do next that they spend years spinning their wheels, not doing anything. So this conversation about what to do next is really important because it does help people re-anchor to what they want their lives to be about in this next iteration.  

Rob Walling:
And we talk about it in, well, we talk about purgatory of, Hey, you’re working for the acquirer still, where it’s this weird in-between of I’ve sold, I have this money, I don’t control the company anymore and I got to figure out now how to be an employee. But then once you do have that break, assuming you move on from that at some point after an earnout, then we talk about how to recover, how to rest up, how to physically recover, connect with yourself and as you’re saying, take stock of the past, embrace the present and look ahead and ask yourself what’s next and with what’s next, there are a couple traps we call out that we’ve seen over and over. It’s the prove I can do it again, trap and the sail away forever trap. Why do people fall into these same traps over and over?  

Dr. Sherry Walling:
It’s so deeply part of us, this story that we create about who we are because of the business that we’ve built. And so the proof I can do it again is about, look how good at entrepreneurship I am. Look how creative look, how it’s just look who I am based on this outcome that I can create. And the pressure to try to do it again just as to reinforce your perception of your identity and then the sail away forever. Ever trap is a little bit like, I don’t need any of it. I’m just going to go retire on a beach in Mexico, which is also not true for the vast majority of entrepreneurs. It’s not an accurate read of themselves. So it’s about needing too much to be an entrepreneur in the prove. I can do it again, sense or not having a proper respect or reverence for how deeply you are a maker and a creator in the sail away forever trip. So finding your balance between those two edges of the spectrum.  

Rob Walling:
And of course, we also, I like this chapter title, what do you Do with a big pile of money? We talk about how money reduces your circle appears and how it changes your friends and your family relationships and even romantic relationships. So obviously this is not a book on specific investing advice, but we do dabble a little bit in that as well. I really liked one quote in that chapter where a founder said, I had all this money and traditionally I’d been investing in index funds and just kind of following the basic financial advice that you would do. And now I had all this money, so I invest like a rich person and started making risky bets and investing in private equity and this stuff that’s not necessarily, it’s like you still Vanguard Index funds or Schwab index funds are still really, really good, even if you have 10, 20, $30 million that you need to invest.  

Dr. Sherry Walling:
Well, again, that speaks to this identity piece, right? I was a scrappy founder and now I’m someone with a big bank account. So doesn’t that mean that I act or hold myself in this different way that my identity shifts now that I’m a rich person or now that I’m a post exit founder? And that’s not necessarily true. Your identity is your identity. You can weave it through these changes, but we have this idea that we put on these certain roles and then act accordingly to those roles. And so I think the theme of the book really is about being able to step back and to see your pull to some of those default settings, and then the ability to choose whether that setting really fits or doesn’t, whether there is a way that rich people invest or not.  

Rob Walling:
And then to cap us off, I’m not going to tell the story, I’m just going to tease it, but one of the cringes stories in the entire book is when you ran over my original Andy Warhol in your Porsche,  

Dr. Sherry Walling:
That did happen,  

Rob Walling:
And I’m going to leave that there. I’m a person who does not identify as a rich person, and yet there you go. That actually happened. So in order to hear that story, you’re going to need to go to exit strategy book.com, back the Kickstarter, and we look forward to getting this book in your hot little hands. Dr. Walling, thanks so much for joining me on the show. Folks want to keep up with you. They can follow you on X Twitter at sherry walling and zen founder.com is your home on the internet, and you have a newsletter that you send out every week as well as a podcast called Zen Founder. Thanks again for joining me.  

Dr. Sherry Walling:
My pleasure. See you in the kitchen.  

Rob Walling:
Thanks to Dr. Walling for joining me on the show. And thank you for joining me this week and every week, exit strategy book.com. If you would like to pick up your hardcover copy, this is the only hardcover printing we will do after these ship. We will then have print on demand paperbacks from Amazon. So if you want to get the fancy schmancy version, these look really good. Honestly, again, I’m really proud of what we put together. Head to exit strategy book.com. Thanks so much for joining me this week and every week. This is Rob Walling signing off from episode 740.

Rob Walling:
Welcome back to another episode of Startups For, the Rest, Of Us. I’m your host, Rob Walling. In this episode, I talk with Andy Kim. He’s the co-founder, co-owner of a SaaS app called Rado that’s at Trot two. Andy acquired the majority of the business from the original developer that built it, and rado is in an interesting position in the sense of once they acquire customers, their retention is extremely high. But most people who need the tool are either unaware they have a problem or problem aware, but they’re not even solution or product or most aware. And we talk about that dynamic in the show of how difficult that can be and how it can be a bit of a headwind to get over. But to Andy’s credit, he’s making progress and growing the business month to month and has figured out some interesting approaches for getting around that. 

Before we dive into the episode, I have a Kickstarter that’s launching a week from today. It’s for my new book that I co-wrote with my wife, Dr. Sherry Walling. A book is called Exit Strategy, the Entrepreneur’s Guide to Selling Your Business Without Regret. Sherry and I have taken our combined many, many years of experience going through exits, counseling founders, through exits, and it’s not just focused on SaaS, it’s all types of businesses, but obviously there’s a light emphasis on SaaS because of course we do have more of a network in the space. But if you’d consider backing the Kickstarter, you can head to exit strategy book.com and click back the Kickstarter button and we will be in touch the moment it goes live. Could really use your support first. 24 hours is a great signal to everyone that if there’s a lot of backers, then we tend to get more. So exit strategy book.com if you’re interested in that. And with that, let’s dive into my conversation with Andy. Andy Kim, welcome to the show. Hey,  

Andy Kim:
Thanks for having me.  

Rob Walling:
Yeah, thanks for joining me today, man. So you run rado, that’s Trot two, and the H one is easy and secure. Go links, quickly share and remember links by shortening lengthy URLs. Try for free. the hell is a GoLink?  

Andy Kim:
That’s a good question. So most people probably have not heard of a GoLink, but the way to think of it is a UR L shortener. The consumer version of this is Bitly or Tiny URL, but GoLink specifically only work for people within the same organization. So whereas you would use Bitly to shorten our URL for marketing purposes to the general public where anyone can click on that link, goal links only work if you and I work at the same company. And the purpose is really to share resources between each  

Rob Walling:
Other. Got it. So folks understand you are a SaaS, you charge per seat, right? Per user. And when I think of Bitly and what was the other one, tiny URLI think of these big kind of freemium, consumer cheap plays, but you are much more on the enterprise side.  

Andy Kim:
Yep.  

Rob Walling:
Isn’t that right? Okay. So talk us through how that, it’s like two sides of a different coin.  

Andy Kim:
Yeah, and if you remember, Rob, when we were actually interviewing for TinySeed, you were questioning why do companies even pay for this, right? It’s an interesting phenomenon, but the reality is this is what I call enterprise software tool that works. The larger the company is, the larger the problem becomes. So there’s really three use cases I’d say, and then individual use. But the way that we break it down between those three, sometimes there’s good overlap, but really the fundamental problem is, hey, Rob sent me a resource three months ago and I don’t remember where he sent it, email Slack. He might have told me over a video conference, but Go Links basically helps you remember where to go because a human readable link most of the time, that’s a lot easier to recall.  

Rob Walling:
Got it. So as an example, then if I wanted to implement Go Links in for TinySeed, I would install a browser plugin, and then I sign into my Go Links account as a TinySeed employee. And there’s what is TinySeed team? Six or seven of us. So six or seven of us would all sign in, and then I can type in to my browser. Let’s say I’m in Chrome TinySeed dot com slash some internal short code, like a R’S deck. And we know an R’S deck is the deck. That is not a great example, but some type of short code. And now that has to then point somewhere, right? It points to a Dropbox location or some URL doesn’t store the files themselves. It literally is just a hop.  

Andy Kim:
We don’t store or host anything. Yeah. Got it. And actually you would just type in Go slash Einar file and that would be it. You don’t even have to do the TinySeed portion.  

Rob Walling:
Yeah. Oh, go. So it doesn’t need to be a TLD. It’s literally because the Chrome browser is  

Andy Kim:
Correct.  

Rob Walling:
The Chrome plugin, I’m sorry, is going Ah, go slash a R’s important resource.  

Andy Kim:
Yeah.  

Rob Walling:
So is this a real problem? Who’s paying for this? I guess it’s like who uses this? Someone invented this and it’s somehow popular. What’s the story?  

Andy Kim:
Yeah, this was started back in the early to mid two thousands at Google. We actually have a very cool interview with a couple of the people that started this at Google on our website. You can check that out. But basically folks at Google were asking to set up these redirects. So they would say, Hey, I have a holiday party. I’m planning for all of Google. It’s really hard to communicate this to 10, 20, 50,000 people and it’s going to be go slash holiday party 2007 for example. And they communicate that to Google, and these engineers were setting up these redirects internally for Google and they thought, let’s set up a service for this so that anyone can just self-serve themselves. And what ended up happening was as this just exploded in popularity at Google, folks left Google, they would go to LinkedIn or Netflix or any other large tech company and they would set the service up for themselves. And that’s really what happened with John, my co-founder as well. He worked at Google, went to a startup, wanted go links, set it up for them, other folks kept on coming back to him and asking him to set it up for their startup. And he’s like, bang idea. Let’s make this a service.  

Rob Walling:
Got it. So then this is independent. The concept of Go Links has been built by hand inside Google and other Silicon Valley startups, and then Rado is a self-serve version of not Not right, but it’s a SaaS version of the same thing that John kind of obfuscated out. It’s such a trip, it sounds like still to this day, I am like, don’t know. I don’t feel like I need this myself. I don’t feel like I need this, but it’s obvious you have clients like what Figma? I mean you have big enterprise, any other notables,  

Andy Kim:
A couple of Fortune 500 companies for sure.  

Rob Walling:
So it’s for them to pay for it and your pricing’s on your website, it’s a $3 per user. Got it. I can just extrapolate to, these are not small contracts, these are enterprise size contracts, so it’s obviously for there to be enterprise contracts around this is something that if you haven’t used it, it doesn’t feel like a pain point, but when you use it and get kind of addicted to it or get used to it perhaps that the next company go to, you’re like, I got to have this. Is that really what?  

Andy Kim:
Definitely.  

Rob Walling:
Okay.  

Andy Kim:
That’s definitely it. I mean, we can see it in our user base. So there’s, depending on the company, there are 20 to 30% of users that use this more than five times a day. Anything that they’re going to, they’re using a goal link to get there. There are others that may be more like you who only use it once a month if that, and it’s because I as a power user sent you a link. But what we find is that the adoption rate of this within a company doesn’t stop at 20 or 30%. It’s like 70% average usage per month for all of the employees at a particular company. Once they’ve fully adopted this, it’s a daily weekly tool that folks use regularly. It just becomes part of your normal workflow. You don’t look to bookmark things, you just know that a Go link exists. So think of it as a bookmark placer, think of it as a memory helper, all of that.  

Rob Walling:
Interesting. Before we get further, I want to dig into the story of rado and how you’ve been growing it, but can you give us an idea of where the business stands today?  

Andy Kim:
Yeah, we’re profitable, which is great. We’re six figures in revenue. The story generally is John built an awesome product. It stands up on its own. We have SOC two, type two, we have a bunch of different services including SSO. We have a Slack app. So all of the pieces are there that John built, but he was a classic founder who focused more on the product itself rather than a little bit more on the sales and marketing piece of it. And that’s kind of where I come into the picture and that’s kind of where we are today, which is you’ll talk about probably some of the issues that we may have, but that’s the problem we’re trying to solve for is how do we get awareness out there about what Go Links are and also why Trato is the best option for someone who is looking for Go Links. And that’s really the crux of where we are today.  

Rob Walling:
That is, that’s the next thing I want to talk about is you have, I talk about on this podcast, five stages of awareness from Eugene Schwartz and its unaware, problem aware, solution aware, product aware, and most aware in that order. For most people, they’re just unaware, like I was unaware of this before you interviewed a TinySeed. But then there is a different subset that is problem aware, and the problem that they have is, I used Go Links at insert name of startups, I’m at the new place of employment, and my problem is I really want those, right? But they probably aren’t aware that there is a solution to this, and I imagine they think I need to get engineering to build it. We had a custom one at the other thing and the IT department or whatever maintained it. So how do, as a founder who’s trying to grow this business deal with that of, Hey, because in a perfect world, you’re at stage one and two, you want to be at four and five, you want to be at product, everyone’s product aware, Hubspotter, Salesforce or Shopify or everybody’s most aware, whatever, it never happens, but you’re all the way at the other end, so it feels like a headwind. 

How do you think about that as a founder?  

Andy Kim:
Yeah, I think if we were trying to get every company in the world to adopt Go Links, that would feel like an impossible task. Just boiling the ocean. You’re never going to be able to get the attention span of everyone out there to be able to do that. So that’s not something that we really think about. We’re trying to solve for, Hey, folks that have already used Go Links say, and you can pull folks that used to work at the Googles and Netflix is the big tech companies of the world, and oh, they work at a new company now, and that becomes our ideal customer profile. These people probably have used Gox before, and in the best case scenario, they’ve loved Gox. I’ll give you one example. We reached out to the CTO of a very large tech company, a Fortune 500 company, and they didn’t have Go Links and responded immediately to a very cold email outreach and they have I think north of 10,000 employees, and it was an instant conversation. He was selling Go links to the other people on his team on that call. It was great. Now we have to go and close that deal, and there’s other considerations like budget and timing and all of this, but that’s the kind of power of, Hey, if you’ve used Go Links before and it was part of your workflow, this is an easier sell than most. But the problem is if you haven’t used Go Links, then you fall into Rob Wallings world where you’re like, why the heck would anyone buy this thing?  

Rob Walling:
A real customer education challenge, right? In that because you’re not inventing a new category, the category exists, but it’s not a big category yet. It’s not DocuSign like electronic signature or scheduling links or marketing automation or something where it’s this massive thing with dozens of competitors, if not hundreds. It’s this, and this is a conversation, and I’ve had when you interviewed for TinySeed was like, how big can this get? How many pasta? I mean, I guess over the course of 20 years, as people move to a new job and moved a new job, it’ll eventually propagate. But today, how do you think about that as a mostly bootstrap startup? I’m presuming since you’re in TinySeed that you want to get two, seven or eight figures in a RR. Yeah. And how do you think about that?  

Andy Kim:
Yeah, I think what’s exciting for us is that what we’re seeing is true. Our target market continues to be technology companies, but there are non-technology companies, say in automotive, industrial healthcare government, and that is wide open greenfield opportunity for us. And they are, I would say, in a sense, starved of productivity tools like Go Links that technology companies use every day and take for granted DocuSign. CRMs are just one classic example of that, but there’s so many other niche kind of productivity tools that if you work at a tech company, you’re like, oh yeah, of course this works. Of course this works. And that kind of migration from technology companies to non-tech seeing that live in our pipeline, and that’s what I’m most excited about because you’re right, it’d be one thing if it was kind of slowly moving across tech companies. That’d be a slow growing market, but because we have non-tech companies adopting this as well, that’s kind of what I’m most excited about. For example, we have a nonprofit customer who said, truly when new employees join and they use Go Links, and they were working at other nonprofit before, it is just magic. It just works. And that’s kind of the magic that we’re trying to achieve. Not just that tech companies, but non-tech companies.  

Rob Walling:
There are actually quite a few products and TinySeed that are hard to get the deal signed, but the retention is through the roof. It’s like there’s net negative churn, frankly. And it feels like Rado is that kind of product. Would you that? Yeah,  

Andy Kim:
I would agree. I mean, we have customers who have been with us for four or five years now, and the companies are growing, which is great for us. Again, we charge per seat, but we see the, hey, new people join the company. They start using Go Links, and it just expands the overall pie for us. And that’s exciting for us, and that’s what we’re really trying to achieve.  

Rob Walling:
And so I’d imagine that your marketing or slash go to market motion has to all be outbound because I can’t imagine there’s much search volume or even much conversation in Facebook groups or Quora or Reddit, all the marketing. I have 20 B2B marketing approaches in SaaS Playbook, and I’m guessing 19 of them don’t work. I mean, I’m sure in person event there’s some things that could work, but it seems like you would have to be going out there finding people.  

Andy Kim:
Yeah, that’s what we’re really trying to solve for is what is the repeatable marketing funnel that works for us? We’ve tried outbound email, we’ve tried Google AdWords, of course, we’ve tried all the different kind of playbook items, and we’re still really searching for what is the best solution that says, I can put in X amount of effort and time and money resulting in why leads that part of the funnel we have not yet solved for yet. And that’s part of the journey that we’re on.  

Rob Walling:
Yeah, that’s the stage of a lot of most listeners to this show are in that stage of trying to figure out what’s the repeatable thing that I can scale up. I remember it was interesting in some of my earlier software slash SaaS companies, I found one or two channels that I could really crank up and really get a lot of volume out of. When I launched Drip, I remember being like, yeah, I’ve got to find that one or two thing, one or two. And it never happened. It was just a bunch of things. I don’t think there was a single kind of traffic source, so to speak, that was more than 15% of our monthly trials. So we had, oh, 

Yeah. And it was all time I was running, I was dealing with Facebook ads. I was paying somebody to run those. We were doing SEO, I was doing podcast tours, we were had an affiliate program. There was all kinds of stuff. And it was just all that’s great for kind of diversification so that no single source can crush you. It also kind of sucks because I had to manage all of that, and we were, at the time, we were a four person team, five person team. And by the end, by time we sold, we were 10, but oh, we were doing cold outbound as well. I mean, we were doing all of it, and it was all kind of working. It was all working well enough, and as a big, it got the snowball going, and the growth was really good. I mean, that’s one of the reasons we got acquired was we were picking up market share so fast, but I found it frustrating to be on this small team and be like, I don’t want to manage all this crap. I needed a marketing team of six or eight people probably, and it was me, halftime, and a full-time junior marketer, and then our customer success person halftime. And it was always frustrating. It is not a myth to be like, Ooh, you’re going to find one or two things that work, but it’s really hard. It takes a lot. It doesn’t just take a lot of trial and error. It just doesn’t work in all spaces or with all categories where you’re just going to find that single silver bullet, so to speak.  

Andy Kim:
Yeah, I agree. This is actually a common topic for our TinySeed Masterminds group actually of, okay, we have a product that we think is working now, how do we reach the right people at the right time? And I think that’s actually some of the value in the community as well, right? Because I mean, I just use the Slack channel all the time to ping people and be like, Hey, we’re thinking about trying this. We are doing this. And just people that have been on that journey before is just super helpful to get all of their thoughts.  

Rob Walling:
Yeah, it’s definitely helpful to learn from those who came before you. That’s whether, if you’re in TinySeed how to do that. If you’re in the MicroComp orbit that’s MicroComp Connect, or even listening to this podcast and hearing the experience of folks and reading the books and all that, hiring senior developers can really move the needle in your business. But if you bring on the wrong person, you can quickly burn through your runway. If you need help finding a vetted senior results oriented developer, you should reach out to today’s sponsor lemon.io. For years, they’ve been helping our audience find high quality global talent at competitive rates. And they can help you too. Don’t just take my word for it, listener. Dylan Pierce had this to say about working with lemon.io. The machine learning engineer, they helped me hire was very professional and even learned a new tech stack to set up an environment to train and deploy machine learning models. He documented his work clearly so I could train it in the future with additional data. I’m super happy with the results. And longtime listener, Chaz Yun hired a senior developer from lemon.io and said his hire quote, definitely knew his stuff, provided appropriate feedback and pushback and had great communication, including very fluent English. He really exceeded my expectations. Chaz said he definitely used lemon.io again when he’s looking for a senior level engineer to learn more and get a 15% discount on your first four weeks of working with a developer head to lemon.io/startups. That’s lemon.io/startups. 

So I want to switch it up a little bit and ask you about the, I’d say the unorthodox way that you came about being a co-founder of this company. So your co-founder John built it and got a first big customer in 2020, and then you came in, it was either 2023 or 2024 last year, and you bought into the business and he’s now a minority owner. TinySeed obviously owns our percentage, but tell us a little bit about how that went down and who came up with the idea. Again, it’s unorthodox, and I like to tell stories on this show to give people an idea of, oh, that’s possible. I didn’t know you could do that. Right? And then when I heard your story, I was like, huh. Yeah, it’s an interesting way. So walk us through what happened.  

Andy Kim:
Yeah. So I have been interested in my own startup for the longest time. I can’t even begin to tell you how long it’s been. And part of the problem was how do I stand something up? How do I get the first customer? How do I get the first product out the door? How do I get first interest? And that to me was a big enough barrier that it felt like diving off the deep end. What ended up happening was I’ve been looking for businesses to buy on various marketplaces, and one that came across for me on Quiet Light was John’s business, this Rado business. And John’s part of the story is really, he built this thing to be sustainable, but he has a full-time job as a software engineer, and this business just wasn’t getting enough care and attention that it needed. And admittedly, he probably stubbed his toe with other partners in the past, but with me buying in, it’s a real capital commitment to growing this thing. 

And I think at the end of the day, what mattered the most and continues to matter the most to us is the level of trust that John and I have built over the last year plus of, Hey, John, I’m taking care of his baby, basically his company, and taking it forward. And he’s there as support on critical issues that he has the experience and knowledge about, and it’s actually worked out better than I could have really imagined for I think both of our cases. And it’s something that I’m super happy about and excited that it’s kind of turned out the way that it has.  

Rob Walling:
Did you and John know each other before this?  

Andy Kim:
No, we did not.  

Rob Walling:
Okay. How did you find each other?  

Andy Kim:
Through Quiet Light, the broker?  

Rob Walling:
Ah, very nice. I didn’t know that Quiet light would do majority, but not full acquisitions.  

Andy Kim:
Yeah, I think at the time I also wanted to acquire the full business, but in conversations as John and I built trust, I think John wanted to retain a certain percentage, and in retrospect, it was probably the right outcome for both of us to make sure that our incentives were aligned. So he’s still involved  

Rob Walling:
With the business.  

Andy Kim:
I mean, we used to catch up every week. It then turned into every two weeks. Now it’s on a monthly basis. But yeah, I ping him all the time on Slack and bother him with questions, and yeah, it’s been  

Rob Walling:
Great. As we move towards wrapping up, I have question for you that I like to ask of a lot of guests that come on the show, and it’s, in your experience running, growing, building this business, what has been the hardest thing about it? And you can either say overall like, Ooh, it’s been X, Y, Z challenge. Or if there’s a moment where you were like, this is so I’m not having fun at all. You can also just go to a moment.  

Andy Kim:
I don’t have a moment, but it is the general feeling of not knowing what the right answers are. You go to school and you’re like, okay, I got an A or B on that test. You go to work and you’re like, okay, I know I’m doing well or I’m not doing well. You know what the company’s doing, but you’re a smaller part of it when you’re at the size of company that we are. And it seems like at times we’re flailing in a large ocean of everything else that’s going on. The real question is how do you know what your North Star is? How do you know that you’re making progress against that, and how do you try to figure out the basic problems of going from basically nothing to a company with processes and with people and with all of that? So I think the general frustration of the question is all of the effort that we’re putting together on this thing worth what we think it’s going to be worth, that’s the real crux of the problem. And again, on the marketing side, you can truly spend unlimited amounts of money into all of the various methodologies and end up with nothing. This is not a game where you are guaranteed results, and I think that general kind of frustration is the toughest part of this entire journey.  

Rob Walling:
The uncertainty, yeah. It’s not just the money, it’s your opportunity cost, man. You could get a job working for a company in the Bay Area and make lots of money, and yet you are basically, I’m guessing, taking a below market salary as most of us do, and just trying to figure it out. And that is a real, it’s a gamble, kind of the traditional, maybe Silicon Valley or YC founder is like a 23-year-old founder doing it or having a this and that, and there’s a reason for that stereotype. Most of the MicroConf, TinySeed startups of the rest of his ecosystem tends to skew a little older, let’s say thirties and forties, some folks in their fifties. But the further you get on and the more you’re making three 50 grand a year as an engineer, senior engineer for Facebook or something, it becomes really hard to leave that for the uncertainty of a startup. And I think it is. I mean, it’s just one of the big concerns that folks have.  

Andy Kim:
Definitely the uncertainty though also makes it a little bit more fun when things do go your way and you do figure it out. And truly, I think that we would have some difficulty if it wasn’t for the TinySeed community, just like being able to call you or call a and r or the mastermind group that we have. It’s just super helpful to be like, okay, I’m not in this alone, and here’s how we’re all going to get through it together.  

Rob Walling:
Being alone in the uncertainty is even harder and being alone and having a spouse or a family in the uncertainty, and it’s like, well, I’m going to spend all these nights and weekends for at least you’re able to do it full time, hopefully mostly during the day. But the boots, I bootstrapped five companies and then raise money for TinySeed, but four of them, I did effectively nights and weekends, and it was not fun. I had young kids and I was telling Sherry, my wife, so all this time I’m putting into this thing. By the time I was on the second one, the first one had made enough money that it was like, okay, I’m going to do this again. And I kind of know what I’m doing now and now Fred. But the first one was a real tough sell. When our friends were like, let’s go to happy hour. 

And I’m like, I would love to. Or I’d go and I’d leave early. I was like, dude, I got to get home and write some code on this thing. These are the trade-offs, the unseen, unseen trade-offs of entrepreneurship, but specifically bootstrapping of any kind is just a lot of grinding hours. So Andy Kim, thanks so much for joining me on the show. If folks want to keep up with you on X Twitter, you are at rado hq. And of course, if folks want to check out Trot, thanks again. Thanks again to Andy for coming on the show, and thank you for listening this week and every week. This is Rob Walling signing off from episode 739.

Rob Walling:
Alright. Alright. Alright. It’s another episode of Startups For, the Rest, Of Us. I’m your host, Rob Walling, and in this episode I’m going to be answering your questions. Well, maybe not your particular questions, but if you want me to answer your particular question in a future episode, go to startups For, the Rest Of Us dot com, click ask a question. In the top nab, you could send me an audio, a video, a text question. Today I’m going to be covering more later stage questions. I believe the earliest stage company is seven KMRR and the latest stage has 25 or 30 employees. So this is where it gets fun. I ask for these kinds of questions on X Twitter and folks showed up and delivered, so I’m excited to dig into them today. Before I do that, I want to let you know MicroConf Remote is going live again on November 20th. 

The focus is on early stage marketing. We’re going to do it in single day three speakers plus q and a after each talk, plus our founder by founder sessions microcomp.com/remote to see all the extra bonuses my team is including. If you purchase by November 7th, it’s a hundred percent online. It’s from 10:00 AM to 1:00 PM Eastern, and of course we record the sessions in case that time doesn’t work for you. Microcom remote is our low priced but high value three hour event we do about every six months and usually one focuses on early stage marketing, the other focuses on early stage sales and then one on the November 20th, as I’ve said, is going to lean heavily into early stage marketing. So microcom.com/remote if you’re interested. I hope to see you there. And with that, let’s dive in to our first listener question. 

This first question is from a longtime listener and a MicroConf attendee. I’m going to keep him anonymous per his request, but I did have a chance to meet him at our most recent event in Croatia. The asker says we are a team of 25. Our order sizes vary from about $100 per year all the way up to $75,000 a year. That’s servicing individuals, teams and departments, but we want to add full enterprises and six figure sales, which for us would be a thousand users and above. Should we be looking to offer them higher service at a higher price per user? So like dedicated account managers, product request priority, et cetera, or a lower price per user and just a small degree of extra service. For example, double the number of training sessions even though they have many times more users. And the question asker referenced a link to a Jason Cohen episode called Adjacency Matrix, how to Expand After product-market fit. 

And the quote from there is what might not have been obvious is how dramatically different it is to sell to the enterprise. Often startups claim this as their growth plan even when they’re only at 500 k in a RR. Again, this is Jason Cohen speaking in this essay. This is definitely the wrong strategy at that moment. This exercise makes it clear yet companies often conclude the opposite. They should instead be considering simple use cases at larger companies. So they should be ignoring the complexity of large companies so they can continue winning where they are already strong. So Jason Cohen, I like the way he breaks this down is selling to the enterprise can be done in different ways. You can have simple use cases at larger companies and we can call them enterprise usually. I don’t differentiate between those two things on this show, but a simple use case at a large company versus a true enterprise sale where it’s a quarter million dollars, a half a million dollars, the sales lead time is one to two years. 

Procurement alone takes 3, 4, 5 months. They redline your terms of service. That is different than a simple use case that your selling a lot of your licenses to a very large enterprise. So that’s what the question asker is asking, right? Should they think about getting into these enterprise sales at this point with a team of 25, they already sell up to 75,000 per year. I’m of a couple minds on this one. I’m going to be honest, I hate enterprise sales. And so if you can get away without doing the 6, 12, 18, 24 month sales cycles, I would do that and still grow the business. I would do that. They are nothing but a headache. And enterprise sales is something that a lot of bootstrappers shy away from. They want the self-serve bootstrapper dream, so to speak. But there’s an in between. If you’re selling $75,000 a year contracts right now and you’re not having to deal with all the headaches of true enterprise sales, I think that’s a pretty good business. 

On the flip side, one could say, well, do you want to maximize for growth or do you want to maximize for how much you enjoy running the company? And I think that’s a question to ask yourself is maximizing for growth would imply you would go wherever the money is, and so you would dig into these extremely complex sales. But the second thing is what do these companies want? We’re thinking about it right now from your perspective as the founder, but how do these companies want to buy? How do they buy today when they buy something else that costs a hundred, $150,000? Do they want higher services at a higher price or do they want a lower price per user and a small degree of extra service? If I were you, I would try to charge a higher price per user to enterprises. It’s not always possible, but that is, we talk about the perfect pricing. 

Typically it starts at like $50 a month and then it doubles and doubles, so it’s 102 hundred a month, and you have this dual funnel also where you’re selling 10,000 or $50,000 a year. I’m just laying out ideal pricing. If I were to build a company from scratch today, in addition, enterprise would pay a higher price per user, not a lower price, and that’s because they need things like custom terms of service. They need to be able to redline everything. They need to be able to have invoices and pos, which are probably already doing at 75,000 a year. They might need single sign on, which I know has traditionally been an enterprise offering, but has recently almost started drifting down into cheaper tiers. They need a dedicated account manager, as you’ve said, dedicated support SLAs in terms of uptime and support response times. You have product request priority, et cetera. 

That’s where I would lean towards is your team is at a size of 25 people where I feel like you can support that kind of true enterprise plan. So if I were in your shoes, that’s the direction9I would lean. And then his second question is, for our first product, we were lucky and had time for people to start organically talking about it at professional associations, trade shows, et cetera. But for our second product, it’s ai, so we don’t have as much time. What are your favorite examples of encouraging word of mouth marketing in B2B SaaS? I get this question once a month just from maybe a TinySeed founder or in some type of q and a or conversation. The bottom line is word of mouth is a great marketing channel because it’s free and it happens on its own. And word of mouth is a terrible marketing channel because it happens on its own. 

And trying to encourage word of mouth marketing is something I have never seen B2B SaaS do well, I’ve never seen a silver bullet is more of what I should say. There are ways to encourage it, and I’m going to run through a few of those here, but there’s no way to control it. You could control your ad spend if you have pay-per-click marketing work, you could control cold outbound. You can control even going to events if that’s working. It’s fairly repeatable. You go to more events, you meet more people, but word of mouth feels like this perpetually elusive marketing approach that so many of us want to encourage. And it’s usually we try a few things and it kind of does, but you never really are in control of it. I don’t know of a single, again, I’m invested in 191 b, two B SaaS companies and I don’t know of a single one that has kind of a silver bullet of like, oh, just do that and it accelerates it. 

However, with all that said, first I want to define word of mouth marketing. There’s a semi-private Facebook group or a Slack channel or Reddit. These are things I call hangouts. And if you see a question, what is a great source of funding for Bootstrappers? And you might see people weigh in with, oh, check out TinySeed, check out MicroComp, check out Rob, Walling. That is a form of word of mouth because it is people that are not you chiming in on a, it can be public, semi-private, fully private conversation and effectively bringing up or endorsing your product. So that’s one way. There’s another way which is a direct conversation where it’s at an event. I’m having an in-person conversation. Someone says, what’s the best CRM today for B2B SaaS? And I say it depends on what you need, but I really like close.com and we still use Pipedrive and there’s one called Adio and we can kind of talk through, so that’s a similar but different form or even a direct email or a direct text. 

If a friend texts me and says, Hey, what’s your recommendation today for email marketing automation? And I’d be like, oh, well if you’re SaaS, then it’s user list. And I’ve always liked Active campaign and their beehive if you’re doing X, Y, Z. So I group those into kind of two different things of Direct one-on-one and more like public, semi-public. Then the third is virality. And this is where it’s not really word of mouth, but it’s like slack. There’s two depths of virality in B2B SaaS. You can actually read ’em out in the SaaS playbook, but one is strong virality and that’s like Slack has where, hey, in order to use it, I have to invite someone from my team. So the virality is very strong. It’s a very high viral loop when you have weak virality and B2B SaaS, that’s more like a powered by link. 

So like Savvy Cal or Sewell, their customers share a link to get someone to sign a document or to get someone to book their calendar. And so that’s weaker. SaaS virality powered by Drip link was another form of weak SaaS virality. It’s still virality, but I separate that from word of mouth, not the same. It’s not someone making a recommendation, it’s just as they’re using the tool, they’re doing it. Alright, so I’ve defined these three types, right? The public word of mouth, the private word of mouth, and virality with strong and weak. So favorite examples of encouraging, let’s say the public word of mouth. I like to monitor forums, Facebook groups, Reddit, podcasts. I used to use Google alerts and I found that Google alerts is, it just doesn’t work anymore. So there’s a couple of tools I use, one’s called F five Bot, the other one’s called sen, S-Y-F-T-E-N. 

And the third is Arvid calls Pods scan fm. And I use those three tools to monitor any mention of any of my brands. So TinySeed, MicroConf, SaaS, playbook, startups, For, the Rest, Of, Us, my own name, start small, stay small, just whatever you can imagine. I like to sometimes participate in those conversations and sometimes not. But I do like to hear and see how often people are mentioning it and in what context and sometimes I have to jump in and correct someone. They’ll say, oh, TinySeed offers this much for this percentage of a company. And I’m like, no, that’s not what we do. You’ve misunderstood, but thanks for mentioning and I’ll correct it. Other times I’ll just jump in and say thanks a lot for the mention. Really appreciate it. Usually someone will mention, oh, Rob Walling said this in a YouTube video, and then I’ll go out and find the YouTube video and I will link it up because like, Hey, thanks for the mention, here’s the direct link to make it easier for you. 

So that’s a way of encouraging engagement. It’s a thing that doesn’t scale, but I find that things that don’t scale work better than you might imagine even at later stages. So that’s for the more public interactions. Participating in those conversations. Once you’ve been mentioned to me, it’s fair game. Now I don’t come in posting a bunch of links. Here’s a discount code to the things you mentioned. I genuinely either say thank you, I correct stuff. If I find there’s maybe a misunderstanding or I provide direct links or even additional recommendations like, oh, you recommended that YouTube video. I actually talked about it more in depth in this podcast episode. There’s a transcript if you just want to read through it. Now let’s talk about the more refer a friend word of mouth. I know people who have refer a friend or affiliate programs and refer a friend, you get a month free. 

They get a month free. That’s fine. That works well with B2C. I find that it works perhaps less well with B2B. I’m not saying you shouldn’t do it, but a lot of B2B folks are just less motivated by a free month of service or by a $50 Amazon gift card. If you have something that you feel like will motivate your people to refer it, then you could certainly do a manual email to all of your customers and just try it. And whether it’s free service, Starbucks gift card, Amazon gift card or something else, you can totally try this. I will also say that with my last SaaS company and I recommend to others do this, is there’s a certain point where customers love your product, certain point in their lifecycle where they love it and they don’t take it for granted. Usually it’s 60 to 90 days, it’s just past that. 

It’s where your churn plummets it. So you might have 8% churn, 10% in your first month, 6% second month, and then it’s like 1% from then on. And what that shows you is that folks who’ve entered a credit card are using their first paid month as an extended trial. And so I know that if my churn plummets in the third month, probably about day 75 to 90, I want to send an email that’s like, Hey, I’m Rob. I’m the founder of X, Y, Z company. We are a bootstrapped software company and one of the ways that we grow is when folks who love this tool spread the word and to encourage that, I’d like to offer you this X, Y, Z reward. If you haven’t otherwise, just ask it as a favor. I would really appreciate if you are loving our tool, getting a lot of value out of it, if you would forward this email to a couple people who you think could get value out of it. 

So you just ask for it. Are you going to get a 50% uptake on that? You’re not. Are you going to get more than 0% uptake? You are? So that is something that we did at Drip and it performed to the tune of single digit percentages in terms of people forwarding and signing up. But the nice part is you can put a referral link in that email and then you’re able to track it. Last thing I’ll say with strong virality and weak virality is strong virality. You can’t really just engineer that into a product weak virality. You can’t think about where can I put a powered by link? Where can I put some type of weak viral loop and give that some thought? Again, I don’t consider that word of mouth. Some people just confuse virality and word of mouth. And so that’s really why I spent so much time defining those. So thanks for those questions anonymous. I hope my answers were helpful. My next question is a voicemail and of course audio and video questions do go to the top of the stack as well as later stage questions go to the top of the stack.  

Speaker 2:
Hey Rob, it’s Flores. Thanks in part to your content, we managed to grow our radio ad platform to about seven KMRR and it’s actually a complete new way of working with radio ads. And we find that when we speak to customers extensively by phone or at events, many of them become customers. But in online marketing for example, the traditional view of radio seems to work against us. How would you approach acquisition if you’re fighting against such a traditional view of your products, which is simply not true anymore? Thanks.  

Rob Walling:
Talk about a voice for radio. Wow, I’m envious of Flores’s voice. Thanks for the compliment. At the start he said thanks. In part to my content, we managed to grow our radio ad platform at about seven KMRR and that’s really cool. It’s always good to hear. So you’re facing what’s called an education problem. And of course as a bootstrapper, do we want to educate our market or do we want to go to the people who already believe it? We want to go to the people who already believe it. There are the five stages of awareness from Eugene Schwartz and it’s unaware, problem aware, solution aware, product aware, and most aware, in a perfect world, you only sell to most aware. The problem is in any given market, there might only be dozens of most aware people in the entire world looking for your solution this month. 

So you inevitably have to go up that chain to the stage four of product aware or just the problem aware people that are searching for how do I solve this problem? And you see companies like v.io do that really well, especially if that problem is searched for in Google and has high search volume. You can cover things like how do I add transcripts or subtitles to a video or captions or how do I resize a video? Again, if you go to v io and look in their top navigation, you’ll see they have 20, 30 different use cases. All of those are very obviously SEO plays. And so that’s a great way to go after folks who are problem aware but potentially not solution aware. And that of course is where a freemium funnel works really well. So if I’m being honest, my advice is don’t educate the market. 

Now, is that realistic? I don’t know. Is the market of people who understand the value of traditional radio advertising big enough for you to build a great business? I don’t know. But if you need to educate them, then no one’s searching for this, right? This is not an inbound product. It is truly outbound. And my entire premise would be to fight against that traditional view. So we saw Salesforce do this with their campaign back in the Ts where they said no software, right? The traditional view of CRM software was that. It was like what? PeopleSoft, I don’t even remember what the CRMs were back then, but they were like a million dollar implementation and usually they didn’t work and it was all on-prem and it was a pain in the ass. It was consultants and it took two years and Salesforce said no software, right? 

They had the circle with the line through it and software in it, and they became the anti software company. Now they are software today. That’s the funny thing is software at that point was considered, it was desktop or installed or on-prem. These days we think of SaaS as software, but there was a differentiation at that point. There was cloud-based software, right? Application service providers. Their whole education plan or their whole education approach was to educate the market and to take a real strong stance. HubSpot did the same thing. They invented this term inbound marketing. I had talked to Dharmesh at one point. He said it took millions of dollars. It might even have been eight figures and several years to kind of define that term. And it’s expensive and it takes a long time. With Drip, we took the same approach, obviously at a much smaller scale because we were bootstrapped, but the headline that I’ve mentioned on this show many times is lightweight marketing automation. 

That doesn’t suck. So my big thing was marketing automation tools suck. They’re too expensive. The sales process is awful. Don’t use them, use us instead, we’re less expensive. Great ux, we’re not clunky, we’re not buggy. I was basically being very deliberate about going against the things that people hated. And these were all words that customers and potential customers had told us that they didn’t like about the competitors, right? The Infusionsoft, the Marketos, the Pardots. And so that became our entire positioning. That’s probably what I do here is be very opinionated about it and come out swinging in terms of you think traditional radio doesn’t work, this is where you’re wrong. This is not your father’s, it’s the old Oldsmobile ad campaign. This is not your father’s Oldsmobile where they tried to reposition, rebrand. That’s kind of the approach that I would think about and I would probably have a long conversation with Baird or chat GPT around this of how do I develop positioning and branding around this such that as long as I’m being genuine about it, and I’m not exaggerating claims, I’m basically saying, if you are not doing this and you’re this type of business, you are missing out. 

You are losing out. Stop paying $40 a click on Google when you can do radio ads and get people for a fraction of the price, right? So that’s how I think about it’s be super opinionated, don’t sell from your heels. I’d go in pretty hard. And so all that said, appreciate that question because in a perfect world, you don’t have to educate the market, but sometimes you find that you have to. So I hope my answer was helpful. My next question is from Sean Matthews.  

Speaker 3:
Hi, Sean Matthews from Left Hook. Currently we are a services company that builds integrations for software companies, bootstrapping our way to trying to build a software product that helps deliver the same thing using and leveraging pretty highly our open source framework called Frig that delivers and developed integrations. So what we’re looking for a question we have as we look at our ideal customer profile, it’s basically B2B SaaS, founders, companies, product people, partnerships. And we are curious as to how, and I haven’t heard you talk about this on the show before, what’s the general census about approaching accelerators, incubators, VCs, portfolio companies, and trying that as a channel to essentially sell your product into? And for us it would be approaching them and saying, Hey, look, we have this open source framework that you can use to build your integrations quickly and easily. And obviously we have some services on the side that we can sell them to do that, and we have a product we want to help manage that process for folks, but the core of the tech is open source and they can run it themselves. 

So the question is, is that a valid approach? Can we go to VCs? How should we go to VCs and say, Hey, we have this solution that could fit your entire portfolio, you should recommend it. Same thing with accelerators, same thing with incubators. I’m guessing this has been a thing that’s been attempted many times. So is it a frowned upon thing? Do people like it? How would you go about doing that? Obviously I do think having a direct relationship with VCs makes sense if we want to go get funding ourselves. On the flip side, I can imagine it becomes just a no-go. They get bid or sold that all the time. So why would they even talk to us? So curious, your thoughts. You have a more of an inside track than we do, and you probably heard people attempt this before. What’s your thought?  

Rob Walling:
Thanks for that question, Sean. Yeah, so there’s a couple approaches you can take here. One approach that you should not take is to scrape the portfolio companies from a website and cold outreach them one at a time because it really pisses people off. We get this about, let’s see, how often does it happen? Once a quarter, once a month within TinySeed. And the founders recognize it very quickly. They post in the private founder SOC channel and they say, is anyone else getting this outreach? And it becomes real obvious real quick. And then oftentimes we will reach out to someone and say, yeah, don’t do this. It’s bad form. You might say, well, it’s just cold outreach. Why wouldn’t I do that? Because it makes people mad because they don’t want to be sold to. That’s not the purpose of why they’re listed on a portfolio page. 

And it’s especially bad if you are leveraging my name MicroConf Tiny Seeds name and saying like, oh, I worked with another TinySeed company. And then people get in and they’re like, have they worked with anybody? Oh, are they lying? Or if they have, they’re kind of using our brand as if we’re endorsing them in this cold email. It’s a problem. So I would say don’t do that. If you’re going to do it, you want to, I think partner with the VCs, the accelerators, whoever. Now the thing you have to think there is, so what’s in it for them? Because the way you’ve described it, you have a tool and a service that could sell to these companies. So you get a lot out of this. You get sales. What do the portfolio companies or the VCs get out of you selling to them? What special deal, special service, significant noticeable discount. 

This is where you can think about maybe offering to be part of their perks. Pretty much every accelerator I know has a perks page with free AWS credits and all kinds of stuff. The thing there is it has to be significant. It’s not a 10% discount that doesn’t get you on perks pages. You’re talking 25, 35, 40 5% discount, like something noticeable or free for the first year. Something that really gets people’s attention because everybody wants to be on those perks pages for exactly the reasons you would imagine. But the perks page is probably the most standardized way of thinking about it. Another thing to consider is does the VC R accelerator, do they have anything you can sponsor? Do they throw an event? Do they have a podcast or YouTube channel? Do they have a newsletter? They have anything that takes sponsorships? Because that can be a nice way to get into conversation with them and sponsor it, see how it goes, see the support, and see if there is room down the line for some type of partnership. So thanks for that question, Sean. Hope it was helpful. My next question is about profit sharing.  

Speaker 4:
Hi Rob. This is Johannes longtime listener and co-founder of leady. We are a SaaS helping marketing agencies onboard their clients by getting them access to their clients’ accounts such as their Facebook page, Instagram, any advertising accounts. In just a few clicks, we have grown lei over the last four years into a profitable business and we would like to share some of these profits with our employees and freelancers. Of course, there are a few questions that we have to answer. For example, what percentage of our profits are we going to give away? Do we differ the compensation for each employee or freelancer by how many days they work for us or even where they’re based? For example, we have people from the Philippines and people from the uk, or do we make a difference also depending on how long they have been with us. We’d love to hear your thoughts on these questions and if you’ve seen any bootstrap companies doing this for their employees and even maybe freelancers without creating too much overhead. So keeping things simple as well. Thanks so much and keep it up.  

Rob Walling:
I appreciate this question. I get this every so often. In fact, so often that I wrote about it in my book. This has playbook sa playbook.com, quoting from page 138. The nice thing about profit sharing is that it doesn’t require you to sell your business for employees to make money. So in this section, this is a team chapter. I talk about equity, stock options, profit sharing. I even cover bonuses and I say consider structuring profit sharing as a pool rather than a committed percentage to an individual. For example, instead of telling early employees, they get one, two or 3% of profits have all key employees share in a 10 or 15% profit sharing pool. I go on for another few paragraphs. Obviously 10 bucks can get to the PD for the Kindle, or what is it, 12 bucks on Audible for to hear my dulcet tones read it to you. 

But the best explanation and examination of bootstrap or profit sharing that I know is from Peloni founder and CEO of Balsamic. So if you type in balsamic profit sharing in Google, you will find his article. And essentially they started with a pool of 10% of the profits, and that’s probably where I would start. You can always go up, you kind of don’t want to go down. He distributes it each quarter and at some point years into the company where he felt more comfortable, he increased it to 15, and I believe he’s now at 20% of the profits get distributed quarterly and it is allocated to full-time employees. Only 25% is split equally, and 75% is based on seniority. Then it’s weighed by the cost of living for each employee because they have salaries based on cost of living because they have 29 employees all around the world. 

And he notes they do quarterly because monthly was too much paperwork and yearly kept some unhappy people around longer than they should have stayed, which I really liked. That is by far the best breakdown. If you go read that full piece. I love the way he does it. I have seen some other bootstrappers write about their profit sharing, and I think some of the advice they give is really bad. So I would, without throwing particular people under the bus, I would look at PE, eagle zoning, balsamic, and I would ignore any other bootstrapper profit sharing that I see because I believe there was someone who was giving away more than 50% of their profits are their employees and that it makes your business, I’ll say almost inviable. It’s just if you ever go to sell, it’s just not a great way to structure a profit sharing. It’s too much. So with that said, it’s a short answer to a question, but hopefully that is helpful. And with that, we will wrap this episode. Thanks so much for joining me this weekend. Every week, this is Rob Walling signing off from episode 738.

Rob Walling:
It’s another episode of Startups For, the Rest, Of Us. I’m your host, Rob Walling, and in this episode I sit down with Derek Reimer as we review the key takeaways from MicroConf Europe 2024, which happened just two or three weeks back in Dubrovnik, Croatia. You’ll hear us discuss in this episode several of the most notable talks, as well as some takeaways that we received from the speakers. In addition, I give an overview of the event and I talk about how it sold out in only seven weeks, and there were many folks who wanted to attend the event that weren’t able to get a ticket. So if you’d like to attend the next MicroConf, it’s going to be in New Orleans next March, you can head to MicroConf dot com slash us to get your ticket. Now, the tickets as of today, are the least expensive they will ever be. They’re only going to get more expensive. And this event, if our past events are any indication, will sell out. So MicroConf dot com slash us if you’re interested in heading to New Orleans in March of 2025. And with that, let’s dive right into my conversation with Derek Rimer. 

Derek Rimer, thanks for joining me on the show to talk through MicroComp Europe.  

Derrick Reimer:
Yeah, it’s my pleasure to be back. Just sinking back into central time, having left Europe yesterday.  

Rob Walling:
So you woke up at five 5:00 AM all bright-eyed, Moshi  

Derrick Reimer:
Tailed. I get glimpses of what it’s like to be a true morning person.  

Rob Walling:
Indeed. I love flying West. It’s so nice. And then flying east is like, oh no, I need to take gobs of melatonin and still wake up. Actually, the first night I was there because I got two or three hours sleep on the flight to Dubrovnik, and then first night I was there I stayed up just till eight, which is like a victory. I’m so tired. Oh my gosh. So I take melatonin and I figured usually if I can make it to four or five, I’m super happy. So I wake up and it’s all dark outside and I was like, I got to go to the bathroom and I look at my clock, it’s 10:30 PM and I was kind of awake and I was like, no, I just took a nap. I basically, and I was like, I need to take more melatonin now  

Derrick Reimer:
To  

Rob Walling:
Get down. So I took again and then I was out till three 30 and I was like, no, that’s not enough. So I hate flying east.  

Derrick Reimer:
Yeah, it’s tough. I don’t have a ton of experience with it. And it’s funny, I was chatting with a R on the opening night and regaling it with my story of the 12 hour layover that I had on my way out to Europe. We came a little bit early to do a little vacation ahead of time, and then he was just laughing at me like, oh, you sweet summer child, you don’t know the tricks. Here’s how  

Rob Walling:
I would not do that. As someone who’s gone to Europe a bunch. Yeah, you do start to get a little travel hacky with it. I’m the same way. So this was your first time to MicroConf Europe and you’ve been to many of the US events? Almost all of them, if I recall right.  

Derrick Reimer:
All but the first one because I didn’t know you then. Very first one.  

Rob Walling:
Yeah. Yeah. What a trip. I guess to kick it off, let me give folks an overview of the European event maybe compared to the US event because the US event pre Covid was 300 people and post Covid has been about 2 25, 2 50, and the Europe event is the biggest event we’ve ever done in Europe. This year, I think it was 150 ish, maybe a little more, 155 attendees. And that’s the biggest it’s ever been. We sold it out in seven weeks and that’s been the new thing since covid is obviously there was a huge drop off and then we feel the momentum has come back to the event. So I expect Atlanta sold out, this sold out, and I expect MicroConf New Orleans. This is the announcement. No one’s heard that before. Now. Yeah, aside from, unless you were in dub, brunick, new Orleans, which is going to be next March, I expect that to sell out as well in the next couple months. So 150 ish, 150 to 160 attendees. The room was packed, great energy. There were 30 countries represented and interesting tidbit, we had 30 better half tickets. The guest passes where people can, your spouse or significant other can join you at an evening event. 

30 of those, so that’s 20% of the attendees brought a spouse or significant other, which I believe you yourself did.  

Derrick Reimer:
I did, yeah. And that was really awesome because I feel like I got to meet a lot of people’s plus ones and that gives you a different sense of the person. For sure. When my wife’s with me, she’s hyper social and very good at getting conversations steered towards, I want to meet, I want to talk about you as a person and not just the work, not just the startup you’re working on. Whereas a lot of times for me, a MicroConf conversation will just be like, oh, what are you building? Here’s what I’m building, what are you struggling with? And those are all interesting, but when you start to get a better sense of who the person is, that’s where real connections start to form.  

Rob Walling:
Yeah, big time. I like that about MicroConf. I don’t know of other events that do it. I’m sure there might be some, but one of the important things that we’ve always emphasized is family, relationships, kids if you have ’em, spouse, if you have one, it’s like this is all part of your life and we’re doing this to better our life, not to make a dent in the universe. We’re doing it because we want our lives to be better and your lives are not better if you torch your relationships. And so that is something I enjoyed about this event was that a lot of folks brought, as you said, significant others, that hotel though. So we Dubrovnik, we’ve done it there four times. We’ve done Europe, micro Europe, I believe 11 or 12 times, and four of them have been in Dubrovnik. So no matter how much I say on this podcast, it’s the Dubrovnik Palace Hotel, I believe it’s called. And I say it is one of the nicest hotels I’ve ever stayed in. The rooms are nice, but the view, every room has a full slider view of the Adriatic. You have a deck and all this stuff. I say it and then people don’t believe me. So when you got there, was it one of the best views you’ve ever had in your entire life out of a hotel?  

Derrick Reimer:
Oh, hands down. Yeah. I mean that place is just, yeah, it’s all about the scenery and I didn’t fully know what to expect. Having never been to Croatia before, I never been to Dubrovnik of course. But you get there and you just feel like you’re in another land. The landscape is just different than anything I’ve seen in the us. It’s just, it kind of its own thing. And you feel like you’re transported into another world and there’s not a bad sight line to be seen in that place. It’s  

Rob Walling:
Pretty magical and that’s why we keep coming back to it. And I don’t know, I mean basically I asked the attendees at the end, let us know, do you want to come back here again? Because it is a hotel that it’s hard to get to. I mean for me, for us coming from the US, it’s just a few more hops than I would like. But aside from that, there’s just no drawback to it. It’s such an amazing venue. So with that preamble, I mean I’d like to get into the talks and hear your thoughts and stuff. Talk about the excursions. That’s something we’ve started to do over the past few years as we’ve reshaped and reprogrammed to the event. It used to be nine talks in two days and now it’s like five or six talks, and we fill in the rest of that sometimes with workshops and all the time with excursions where you get out. There was what kayaking this year there was wine tasting, which I believe you did. There was a boat ride to an island and a kind of scavenger hunt. There was some other stuff. I actually don’t remember what all of ’em were. But let’s kick off with excursions. Before we get into the talks, tell us, you picked wine tasting. What was the logic there? And then I guess generally, do you feel like the excursions are a benefit to the event or that you prefer to watch two or three more talks?  

Derrick Reimer:
Yeah, I think the excursions are definitely a benefit. I remember the first few years of going to MicroConf, just feeling almost I’d been sitting in a classroom all day long, not in a bad way. It’s good information coming from the stage, but sometimes it’s information overload and then you’re trying to fit hallway track type conversations in between the cracks and you’re just completely exhausted at the end of the day if you’re maybe more so if you’re introverted like me and a lot of people in that room are, I think so, yeah, the excursions are nice. We go to lunch and then it’s like, alright, you break after lunch for whatever activity you chose. I chose the wine tasting partially because I figured it would just be a good chill environment to sit around and have kind of those ad hoc conversations with folks. Sometimes I think it’s a little more difficult when there’s a big activity. 

And for me, I was like, I don’t know if I want to pack hiking boots and whatever else would be necessary for the more rigorous activities. But yeah, so my excursion, I can say we went into Old Town, tried some olive oil and some wine and it was fun. It was fun to just kind of walk around. And honestly, every time I’ve been on one of these excursions, there’s always at least a small bus ride or something and then you sit on the bus next to someone else and you have a conversation there and then it kind of continues or you kind of cycle around a bit as the excursion goes on. And yeah, I think it’s just a good way to put an around the hallway track. I think sometimes just literally standing in a hallway and having these conversations can feel a little bit stilted, so it’s good to have something to do while you’re having those conversations.  

Rob Walling:
And that’s a good perspective on it. And that’s really why we started. It was like how do we facilitate more relationships in a way that is fun? And we’ve done, there was a hike, right? That was the other one I forgot. But yeah, we’ve done, it’s called beer tasting, what is it? It’s just like a brewery tour is really what we’ve done and we’ve done, gosh, all types of boating and anytime there’s water around, it’s like, Hey, you want a kayak? Hey, you want to get on a boat? So it’s neat to be ax throwing. I think there was a trapeze even here in Minneapolis, Sherry took people to trapeze, which is kind of crazy to think about. But yeah, so those have been fun. And generally we’ve never gotten complaints of like, oh, I wish there were more talks. No one has said that. So that was a change we were going to make in 2020 and then obviously didn’t have the event for a couple years and when we came back we were like, yeah, let’s really do that, kind of change it up. So it has been fun.  

Derrick Reimer:
Yeah.  

Rob Walling:
Alright. So curious to get your take on what you think, having been to a bunch of us events and not the Europe event, what’s the biggest difference or key differences between the two events?  

Derrick Reimer:
So yeah, I would say first and foremost, the location is just completely unique compared to, well Las Vegas where the US event used to be. And then even being in more major US cities, it feels like it has a different vibe, maybe a chiller vibe, I would say being in this amazing old city on the Adriatic Sea, and I think that’s a good thing. I think there’s a certain energy that comes from the US events, and I think that’s partially due to the attendee size too. So there’s more people, there’s more connections to make. The rooms are a little bit louder just because more voices. And at the year event it felt reminded me a little bit of MicroConf us maybe six, seven years ago, a little bit earlier stages of the conference where there’s fewer attendees and you can feel like you can make the rounds a little easier through the room. I honestly felt at us, I’ve been coming so long and there’s an increasingly large cohort of people that I’ve just seen over and over again. So it’s like now going to the US events, it’s like, okay, there’s 30 people that I’ve definitely met before and would love to reconnect with, and that’s almost a little daunting. So being a person based in the US going to Europe, there’s a lot fewer people that I’ve met before at the event. So it feels kind of like an open clean slate to go make new connections, which was cool.  

Rob Walling:
Well, with that, let’s dive into the talks, and we’re not going to talk about every talk obviously, but I like to touch on some key takeaways. I know you astutely took notes because you always take notes, but I was like, Hey, you want our quote a podcast with me after? And I’m sure that’s inspired you to be a little more nerdy on this one. So the event kicked off with KO’s fan favorite Pel Gioni who has done, I don’t even know, man, this is his fourth MicroConf talk. Maybe he’s come to the US a couple times, done some Europe, and he doesn’t really do conference talks anymore, but I emailed him and he’s like, you know what, man, MicroConf, I haven’t done it in a while. I’m going to come out and do it. So I really appreciated it. And his topic was, it was moving from developer to entrepreneur to founder to manager, or I don’t remember the exact details of it, but yeah, why don’t  

Derrick Reimer:
You maker to founder to entrepreneur,  

Rob Walling:
Maker to founder, entrepreneur. Yeah, that’s right. So what were, I don’t know, one or more takeaways that you had from oc?  

Derrick Reimer:
Yeah, he came right out of the gate. I feel like this was a very strong first talk to kind of set the stage. I mean, he in my mind is sort of a mainstay of the community. He’s almost at the Basecamp level of he’s been there, he’s been executing and just doing his thing and obviously doing really well as a company. I think he said there millions in a RR 29 employees. And yeah, he’s obviously been kind of maturing in the way he thinks about business and that’s what came out in this talk. So I think a lot of us are kind of absorbed in the Twitter sphere of people who are trying to often reinvent the way they run their business or trying to just come up with all of the solutions from first principles, thinking of their business as a product. So that’s something that Dy talked about right out of the gate was like, this was a big mistake I made early on was thinking about my business as my second product and thinking, you know what, I’m not going to do what the MBAs do and what people go to business school that’s for big companies. 

I’m a small indie company and I’m just going to do stuff my own way. And I think he has learned over time that often you should just kind of follow the best practices. I mean, management theory is there for a reason. So employees standardized job titles actually because they want something to look reasonable on their resume, should they decide to go work somewhere else and be able to have this transferable experience that’s not just like a happiness engineer or something, but an actual job title. People want to know if they’re getting paid fairly. So what are the salary bands for this role? How do you actually define whether someone fits in a role? So it was very interesting to hear him talk about how he made that progression because I think even if you’re earlier stage, well the earlier you are, the easier it is I think to fall in this trap of now we’re just going to do things differently. We’re just going to come up with our own rule book. So I love to hear this kind of wisdom, this hard earned wisdom from a founder who’s been at it a long time,  

Rob Walling:
Who’s been at it, and it’s not just the number of employees, but he’s been doing it now 15 years. I believe he launched in oh eight or oh nine. And this is the conclusion that pretty much everybody I know eventually comes to is you think you’re going to invent job titles or not have ’em or be, whenever I hear I’m going to do a completely flat org or a democratic org, I’m always like, Nope, good. There’s two in the world that have survived longer than 10 years doing that. It just, we are makers and we want to do creative things. And I love that analogy he said, of your company’s not your product because your product, you have to make a bunch of judgment calls and you’re making stuff up basically as you go along, but your company, there is standards for that or at least frameworks for it. Now I will say that I’ve never run an entire company of 30 people that’s bigger than any company I’ve run. But even at 30, I don’t know that I would have as much process as he does now. Maybe that would be a mistake on my part. Maybe that’s hubris, but I really don’t like process this. I’m not telling you anything 

But listeners, I tend to shy away from it. So I need someone who does bring process because even at a 10 person company, you need some process. And we had no process at Drip because I was just like, eh, this is whatever, we’ll just do the things and it worked, but then it was like it wouldn’t have scaled very well. So there’s this balance. I think Pel D has gotten into the frameworks and used them well. I would almost dial it down a little bit from what he’s done, but maybe, hey, maybe at 30 people, that is what you need. And his learnings are the reason I almost wasn’t going to have a big section in the SaaS playbook about job titles and salaries and management and when to hire managers and how management versus leadership, just all that stuff. And the shock of after we got acquired and seeing a bigger 170 person company, how they operate and how differently it was from us. I was like, oh, there are some really helpful things that smart MBAs know. I’ll discount half of what they know. But the other half is actually quite helpful and the hard part is knowing which half do you take.  

Derrick Reimer:
Yeah, I think there certainly is the risk of overcorrecting on this, especially at different scale. I came away from this thinking like, oh man, I need to be thinking how I could be maybe a little more rigorous about stuff and not just trying to make it up, but I’m also realizing for me, I’m a three person company, so it can still look a lot different. But there’s one kind of overarching principle that he stated that I kind of starred and underlined on my notes. He said, the job of the CEO is to provide clarity, and that takes many different forms. So if you’re talking about a job title or something, it’s like, well, how can you make this as clear as possible so that the employee understands what’s expected of them and you’ve made your expectations clear, you’ve communicated this appropriately. And how do you communicate a product roadmap to your team and how do you communicate to your support people how they ought to respond to feature requests and bug reports and all this stuff? It’s going to look lighter when you’re smaller, but you still ultimately have to provide as much clarity as possible so that no matter how small organization can function well,  

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Rob Walling:
Our next talk was from Andrew Davies, he’s the CMO at Paddle. I assume most people have heard of Paddle and he brought in, it was data-driven approaches to growing your company, right? What were your thoughts on his talk?  

Derrick Reimer:
Yeah, I think he just sort of brought a little bit of his own story into the talk, talking about his experience from being kind of in the earlier stage startup land to now being the CMO of Paddle of big payment processing company. So he had some various tidbits. One thing that he talked about was the kind of general advice in the MicroConf community is raise your prices, always be raising your prices. And he had some nuanced take on that to say, at least in the current climate, he’s finding in the data that just blunt price increases are not working great. And so it’s better to think a little bit more strategically, maybe especially in this current season, about how to segment your pricing, how to maybe play with packaging or add-ons or some ways to say, people who are getting the most value out of these features, you can put them in a different bucket and charge a higher price, but just blanket raising your prices across the board. He’s seeing some pushback against that in the data of not being super effective. And he also talked about pricing localization as a growth driver. Even just this example of expressing your prices in Euros if someone in Europe is viewing your pricing page. And I thought that was really interesting. It doesn’t necessarily change under the covers, I don’t think how your Stripe checkout flow works, but on your pricing page, if you express it in the localized currency, he has seen a nice conversion rate lift. So I thought that was an interesting one too.  

Rob Walling:
Yeah, it’s always neat to have speakers who have a large swath of data and paddle certainly has a lot of subscription and SaaS companies. So I enjoyed Andrew’s talk. One thing I forgot to say at the top when I was kind of giving the overview was this stat about the attendees in the room that I was shocked by. I was so shocked. I asked producer Sonia to verify it, and then I said, can you please show me who responded yes to this? And it’s that 24% of the companies in the room had at least a hundred KMRR.  

Derrick Reimer:
Wow.  

Rob Walling:
At least 1.2 24% shock. I was like, nah, I think they misread that. I think they meant a R. And I started looking and I was seeing the guy and I was like, oh no, I know them. I know them, I know them. So really impressive room to be in, to be honest. And there’s a huge swath that are in the mid to high six figures in terms of a R, it’s a side jack, but I just wanted to mention that of the quality level of the accomplishment of the attendees. And that was evident in the conversations. I have no qualms with someone coming who is pre-revenue, and there were, I dunno, 20% of the audience or something was pre-revenue, which is fine. That’s great. Come and learn and hang out. But if all of the audience or 80% of the audience is pre-revenue, the conversations get a little old looking for an idea. But when people have a business and you can either learn from them, you can hear their war stories, you can maybe give ’em advice from your learnings that that’s the fun of being at a MicroConf.  

Derrick Reimer:
Yeah, totally. Yeah, at risk of this sounding, it’s was all positive or something. That is one thing that I noticed about this MicroConf in particular. And there are ones in the past, I think in the us I think you guys experimented pre covid with starter and growth tracks to try to address the issue of people being at different stages. And I think whether it was by happenstance or just the way that the Europe event has grown over time, it did feel like a pretty good spectrum where there were people ahead of me and people behind me. And those are both interesting conversations to have.  

Rob Walling:
And I like to, in this podcast kind of recap of the event, I like to call out things that went wrong because I don’t want it to be a big puff piece of like, Ooh, wasn’t it great? And everything was great. It was one of the best MicroConf Europes we’ve run. It was in the top two for me personally. And someone asked me, well, what makes it great? And I was like, the attendees, the energy, the vibe, the positivity, and then the talks were all good or better. Usually we do. I mean, usually I spend so much time curating and trying to get, I want everything to be exceptional. That never happens. It just isn’t the way it goes. Even a great speaker has an off talk or an off day, or you’re betting on new speakers and you coach ’em and you do everything you can, but when they get up there, sometimes it doesn’t work. 

So there’s always some mishaps. There’s often logistical mishaps, sprinklers going off in the middle of a room, or small things like the audio popping or the audio qualities, but the room’s too hot. There’s just all things wifi goes out, there’s all things that can go wrong. And I just kept waiting through the event. I was like, don’t say to producer Sonya, wow, everything’s going right. And I’m so surprised. Don’t say that. Don’t say that because the moment you say that, something’s going to go wrong. But I just kept waiting and then we got to the end and I was like, that was one of the least stressful events I’ve run in a long time. And it was just really a really positive event. So I’m guessing that’s how it felt on your end too, as an attendee, I’m hoping.  

Derrick Reimer:
Yeah. Yeah, it was honestly kind of hard to find anything to complain about. It was pretty windy down by the ocean, I’ll say that. Good point. Yeah, you guys couldn’t have turned the wind down, but the sun  

Rob Walling:
Was in my eyes when we were at the evening event. Oh, probably. Here’s one thing that I would do differently is the opening night reception was in a lobby and it was loud and I don’t like loud stuff. So that was probably the one. But I mean, come on. That’s such a rounding error compared to the thing. Totally.  

Derrick Reimer:
Yep.  

Rob Walling:
Anyways, yeah, let’s talk about the next talk was actually because we did excursions that afternoon. And then the next talk was Mr. Omar Zen home talking about 10 things he had learned starting and selling Webinar Ninja. What were your thoughts there?  

Derrick Reimer:
Yeah, I thought it was interesting to kind of contrast Omar with pedi because I think they’re both successful in their own. Obviously Pel has gone the path of the more traditional organic bootstrapping, keep running your company until maybe you want to retire kind of mode. And Omar was definitely more from the lens of, alright, I set out to build something really valuable and I went after it and I hustled. So he started out the gate saying, I intentionally stayed poor while doing this. And I hear the ways that I kind of structured the sacrifices I was going to make in my life so that it was him and his wife. I think they were both part of the business, how they could make this run at building something really valuable and eventually exiting. And he did exit. So it was kind of cool to see a couple of the speakers having this long arc of like, alright, I started, I built and then I sold and here are the lessons that I have. 

So he obviously had 10 of them. I won’t go through all of ’em, but he talked about making it personal, having your, why are you doing this? What is your motivation when things get hard? And that was a good reminder. He talked about hiring. He said, hire slowly fire quickly. Which is something that I think is pretty common wisdom at this point, but always helps to hear it. This just keeps getting reinforced over and over again by people who have been in the trenches for a long time. You talked about evolving your product over time, holding loosely to your product. And this is something that a lot of us hold very strong onto our product and we love it and we love what we curated, but sometimes that’s not what the market needs and you have to be willing to adapt. And so it was just fun to hear these hard-earned insights from someone who made it out to the other side and sold his business.  

Rob Walling:
I really enjoyed his talk. If folks want to see the talks, we do package ’em up and sell them. I believe it’s a hundred or $150 for all the talks. And those obviously get on email list microcomp.com if you want to get notified when those are available. And with that, let’s jump to our next talk, which was Marie Martins from Tally. She’s the co-founder of Tally, and she was on this podcast just, I dunno, two, three months ago talking through her journey, but she told that story with more depth and more details and slides and all that. So what were your takeaways from hers?  

Derrick Reimer:
Yeah, I mean, what a fascinating success story. I remember listening to her on the podcast and thinking, wow, how did they do this? So it was fun to hear her talk even more about it. And I still don’t know if I fully understand all of the ingredients of the success that went into why it worked to Tally. For those who don’t know, it’s this Form Builder product competes with Typeform and they’re managing to make freemium work at really good scale. What do they have? 400,000 free users,  

Rob Walling:
400,000 free users, and they’re building public. So the a RR is what, 1.8 million I believe, and they are fully bootstrapped and it’s just her and her husband and then one support person. So freemium is the driver for them.  

Derrick Reimer:
Yeah, obviously she talked about this on the podcast episode as well, but about their sort of early cold outreach strategy to just hustle and seed the pool of free users. And I’m sure within that got a lot of micro influencers who had audiences or communities they were part of where this could just take hold and spread. She talked about how they latched onto the Notion community in particular. I think their product, she talked about being very aesthetically similar to notion. So people who are in that ecosystem would feel like, oh, this fits naturally with the rest of my tool set. So I think there’s some kind of dynamic there around positioning yourself next to a product that is beloved by a lot of people and feeling like, oh, of course if I use Notion, then of course I’ll just use Tally. And obviously she is a very, very talented marketer, knows how to put her finger on the pulse of what this, at least the initial seed community of people who would latch onto this free product, what these people wanted to see and cause ’em to jump over. So it was inspiring to hear her talk about that. I definitely would love to replicate some of that if I can find ways to do it.  

Rob Walling:
Easier said than done a lot there. There’s a lot happening that’s going right for them that I have a lot of respect for what they’re doing, but man, making that work is one in a hundred or something, you know what I mean? 

And I have a lot of respect for her husband who I got to meet Philip Philippe, I believe, pronounces. But everyone just kept saying, that product is so amazing and so simple and so gorgeous, and so this and that. And so I’m like, obviously he’s a damn good dev. Probably a full, he’s a full set. Cause he’s the only dev on it, so that’s cool too, right? It’s like to me, did you look him in the eye and be like, all right, which of us is better, sir? Which of us is a better full stack? That would’ve been a heck of a, I think if the two of hands touched, does the universe implode because it’s like the two amazing full stack devs? Is that how that works?  

Derrick Reimer:
Yeah, yeah. I think he actually does, she mentioned this in her talk, I wasn’t sure what their division of labor was around design. A lot of times there’s a lot of times it’s a backend front end developer and then someone who does design separate. And it sounds like Philippe does a lot of their design work as well. So  

Rob Walling:
Were you alling him and you’re like, bro, I don’t come from my title. Everyone thinks I’m the best full stack. Don’t even bring it. Yeah. Who’s the full, I don’t know why. I think there’s some has to be some big rival where you both are super chill and super respectful and somehow I want there to be a beef 

Fist fight in the parking lot. So anyways. Yeah, no thanks. I appreciate your sentiments about her talk. It was great to hear the deeper story because in the podcast we can only cover 30 minutes with no visuals, and she crafted it in a way that I really appreciated. Our next talk was an attendee talk. Actually, we only had one attendee talk this year, and it was Tim Vander Castile who submitted a talk about things he had learned building his business. And I hadn’t heard of Tim. And so Tim gets up and starts talking and I’m kind of like, I’m getting tired. It’s the afternoon. And I’m sitting there zone out a little bit, and he’s like, yeah, and then we got our a RR to 35 million. And I was like, whoa. And they bootstrapped and I was like, that’s a thing. And they said, then we sold four and there was an asterisk. It was like, according to public records, I am under NDA, but I can quote a public thing. Then we sold for $300 million. And I was like, what just happened? How have I not heard of this guy? So I was, that was the second slide. I was like, well, now I’m super interested because I just need to hear this story. So with that intro, what was your takeaway from Tim’s talk?  

Derrick Reimer:
Yeah, what a humble guy to be having those numbers attributed to you. I had a chance to talk to him in passing, and my wife actually sat near him at dinner one night and talked to him a bunch more than I had the opportunity to. And he’s just such a normal guy for having sold your business for allegedly $300 million,  

Rob Walling:
Allegedly we’re pretty confident it was at least that is that sentiment.  

Derrick Reimer:
So he had obviously just a 10 minute talk, so three takeaways. But it’s interesting how these sort of dovetailed nicely with both what Omar had touched on and what Pedy had sort of touched on. So he talked about the mistake of being a benevolent dictator for too long early on. You kind of have to control everything that’s happening in your company, but once you start building a team of hopefully people who are smarter than you and better than you at their individual discipline, you start to loosen the grip a little bit and trust your team. So he talked about what he would’ve done differently is empower people earlier and remove himself as a bottleneck more aggressively. And boy do I definitely feel that even with a small team, I think I have the tendency to want to micromanage too much of the business, and even if it’s working on the surface, it’s still, there’s a cost to it. 

My own mental burden and my own managing my own energy can be tough if you’re trying to stay literally on top of every single detail. So that was helpful to hear. He also talked about not thinking enough about culture, and this is something that Pedi talked about a lot. He talked about kind of defining your values and your mission, which again, those sound like very MBA esque concepts that US Bootstrappers wouldn’t want to spend time on, but I thought pedi talked about the benefits of those in a really pragmatic way. Even if your mission is just to stay alive at an early stage, you should state that and everyone on the team should understand that this is what we’re trying to do. And so the way we operate needs to be in service of that. And so Tim talked about, especially as you get bigger, being more thoughtful about the culture you want to craft, that’s one of the few decisions that you do get to make. And the rest, a lot of other decisions should just kind of fall in line with best practices, but you get to choose your culture. So yeah, those are two of my takeaways from Tim’s talk.  

Rob Walling:
And the last talk of the event was yours. Truly, I like to talk on the first day to get it over with, and I can’t remember the last time I’ve talked on the second day actually, but due to scheduling and reasons, I talked last and I talked about breaking through the seven SaaS plateaus, and I finally took that doc that I’ve referenced on this podcast where I have three pre-product market fit and seven, wait, did my talk have eight in it? It had eight, that’s right. I added an extra one 

Because this was the interesting part. Yeah, so I have this document, right with three pre-product market fit plateaus, and I had seven kind of pros once you have strong product-market fit, ways you could plateau. And then those were mostly out of my head and experience and stories and such stories from other founders as well as my own. Then I asked a bunch of TinySeed founders, I have easy access to revenue graphs, so I would look to see where there were plateaus and I was asking founders and an eighth one came up and that’s why I added it. So I guess the title was eight breaking through them. And so I wanted to have, I’ve never presented that material. It’s been sitting in a Google Doc and one reason I never presented, it’s kind of challenging. You can say, well, this is why you plateau because you don’t have enough traffic or leads. 

So the solution is drive more traffic or leads. It’s not actually that helpful to know. So the talk really was to name a framework or at least have to be able to identify. I’m like, I find that it’s helpful for people for me to say there are only 20 B2B SaaS marketing approaches. That’s it. Otherwise you think there are thousands and it’s just like, no, here’s the list. Pick one. Now, maybe I missed one. Maybe there’s 21, but it’s pretty much all of them. So if I say there are eight, is there a chance there are nine? Yeah. Is there a chance there are 23? No, there’s no chance. I know that. I’m not off by that level of magnitude. So trying to codify and get your around the thing is really the goal there. And then I had a story for I guess six or seven of them, like a real life story with a graph that showed someone breaking through the plateau. All that said, that’s the precursor. Did you have any takeaways from the talk?  

Derrick Reimer:
Yeah, I think I know that plateaus are top of mind for a lot of people in conversations that I have at honestly, the last couple of micro comps in particular, I just feel like this is something that a lot of people are coming up against or at least or seeing on the horizon. So I think it’s was really good to get some knowledge out there, at least defining the parameters around the types of plateaus and how to think about fixing them. I know for myself, as I’ve kind of seen plateaus coming in my own business, it’s like, okay, I feel like I could probably be working on many different things. So then the challenge becomes, well, how do you narrow your focus? Because obviously, for example, getting more customers through the door will theoretically solve any plateau if you can just get more customers. But that’s not always the most rational thing to do, just to try to increase top of funnel. So I think this is, yeah, it was just some helpful nuance to think about. Okay, if you look at your churn, is your churn too high? Well then, and you kind of compare that against maybe bands for your industry or whatever, or at your price point,  

Rob Walling:
Like rules of thumb or whatever.  

Derrick Reimer:
Yeah, go to profit. Well, they have a bunch of industry data that you can compare against. And so you can start to use these to hone in and then start thinking about it in a narrower sense of, alright, yes, maybe the answer is get more customers. But also before you try to do that, it’s most rational to think about how to improve retention or how to move out of the churn percentage range that you’re in. I think I’m in a range at a relatively low price point where my churn is higher than I want it to be, and that’s probably just going to be the case because of my price point. So perhaps the solution is think about how do you attract customers who will pay more and that will move you towards a lower churn average, for example. So just some good frameworks I think, to think about this stuff.  

Rob Walling:
Yeah, I appreciate that. That was part of the reason that I decided to do this talk was I see this on Twitter where someone’s like, I’m plateaued. What should I do? And then there’s all this random advice and it’s like you can’t give advice unless you know the Cause. It’s like trying to prescribe a medication when all you see is a symptom. You’re not treating the actual source the actual cause of it. And that was when I realized, all right, somebody needs to get this info out because the thing that I’m going to ask now on Twitter, I’m plateaued. What should I do? I’m going to say, what’s the cause? Which of these eight is it? And if they say, I don’t know, then I’m going to say, you go figure it out and then come back to us and say plateaued because of this. 

So probably next there needs to be a diagnosis criteria of like, well, how do you know which of these eight it is? And I can tell because I see a bunch of businesses, I have the rules of thumb in my head if I can look at your churn or your funnel or whatever, but how do we get those codified in a way that is actually helpful? Here’s the other thing, and I said this, the bleak information or the bleak conclusion is most companies that I see that do hit a plateau don’t make it out. And I think the number of the graphs that I looked through, it was like 80 to between 80 and 90%. Once they plateaued, they just haven’t yet made it out. Now maybe they all will, but it’s like, no, it’s kind of brutal. Yeah, I didn’t know that.  

Derrick Reimer:
I suspect that’s because I think in reality, a lot of the solutions to the plateau involves a pretty significant re-engineering of the business in some way. Whether it’s like tap a new market, add on to the product, or add a second product to your product line to expand your value or going up market, I mean, it’s easy to say and very hard to do because you have to rejigger your go to market strategy and potentially learn new skills or hire new people to do those things. So all this stuff is easier said than done, but it’s helpful to have some foundational frameworks to begin strategizing around it,  

Rob Walling:
I think. So if you’re listening to this and you regret that you did not go to MicroConf Europe, you should come to MicroConf in New Orleans. microcomp.com/us tickets are now on sale, and they are the cheapest they will ever be. The price will only, it goes up every month or two. So if you’re thinking about going, it’s next March 16th through the 18th, that is 2025 in New Orleans, and I hope to see you there. Do you think I’ll see you there, Derek?  

Derrick Reimer:
Oh, for sure.  

Rob Walling:
Yeah. Yeah. Have you been in New Orleans yet?  

Derrick Reimer:
I’ve never been in New Orleans.  

Rob Walling:
Oh, that’s a good excuse to go down there.  

Derrick Reimer:
Yeah, I would be going to MicroConf regardless, most likely. But it’s also a nice little thing to have a new location to check out. That’s an extra incentive.  

Rob Walling:
It is like going back to Vegas again. It’s like, well, I’m definitely not going for the town.  

Derrick Reimer:
I’m  

Rob Walling:
Going for the event. But yeah, we’ve hopped around Atlanta. It was neat to pop in there. It was neat to see Denver. I’ve been there several times. I’ve only been in New Orleans once, so I agree. I’ll do a little sightseeing. I was trying to think of some other places that we could host it that are interesting. Austin, Texas would probably be high on my list, but I think I like the idea of continuing to bounce it around for exactly that reason.  

Derrick Reimer:
Yeah, totally.  

Rob Walling:
Alright, man. Well, thanks so much for joining me on the show today. Folks want to keep up with you. You are at Derek Reimer on X, Twitter, and of course savvy cal.com if folks want to use the best scheduling link on the internet.  

Derrick Reimer:
Indeed. Well, thanks for having me.  

Rob Walling:
Thanks so much to Derek for jumping on the mic with me and helping refresh your memory if you went to MicroConf or to drop some new thoughtful takeaways to you in case you miss the event. Obviously, we’re going to have videos available, as I said during the episode, MicroConf dot com if you’re interested in signing up for the mailing list such that you hear about the video package once that’s around. Thanks so much for joining me this week and every week. I’m Rob Walling, signing off from episode 737.

Rob Walling:
Welcome back to Startups For, the Rest, Of Us. As always, I’m your host, Rob Walling. In this episode, I’m going to be answering later stage questions. I received a ton of good questions on X Twitter a month or so ago when I did a call for them, and I had gotten a little weary of answering the same questions about idea validation and early stage stuff. So these are all folks doing six or seven figures in a RR that have questions ranging from regrets for things you didn’t delegate how to decide to DIY, versus hiring a growth agency, deciding whether a customer type is worth selling to or targeting. And more. Before we dive into the episode, my new course, the SaaS Launchpad, has been live for a few weeks. It has been receiving rave reviews, SaaS launchpad.co. If you want to check it out, it’s for the earliest stage SaaS founders. 

So if you’re looking for an idea, if you want to vet an idea to validate it, if you want to build a launch list, if you want to build an MVP launch your product, this is the course for you. It is the best course I’ve ever put together and it’s really the first course I’ve built in about 14 years. So you can head to SaaS launchpad.co for full details and to check out the course. And one more thing, MicroConf us 2025 tickets have just gone on sale. Every event we’ve run for the past 18 months, I believe maybe more, has sold out and I expect MicroConf US 2025 to be no different. It’s going to take place in New Orleans, March 16th through the 18th of 2025, and right now our lowest priced tickets are available on sale. They will never be lower priced than they are now. We’ve just wrapped up our Dubrovnik event that one sold out, and again, I expect this New Orleans event to sell out. All the details are at microcomp.com/us. Be sure to check it out soon if you’re interested in joining me. And two, 250 of your best founder friends that you’ve known on Twitter that you’ve met in person that you’ve aspired to meet in New Orleans next March. 

My first question for today comes from Tobe. He is Tobe builds on X Twitter. His question is, is there anything you regret doing yourself instead of delegating while trying to grow to 10 KMRR? And I’ll do you one better. I won’t just talk about things I regret, but the most common mistakes I see early stage founders making, and these are founders who listen to startups, For, the Rest, Of, Us, these are TinySeed founders, these are MicroComp founders, and there are some pretty common anti-patterns in this early stage of learning how and when to delegate. Now, delegating is a balance, especially in this early stage if you’re bootstrapping, because oftentimes you should delegate or outsource a bunch of things, but you don’t have the money, right? You don’t have the luxury of a funded competitor who can hire a chief of staff on day one or who can hire a staff to do things that you don’t want to do. 

So there is this balance between your willingness to delegate and the budget you have to do so. But with that said, I think a couple things that I commonly see founders keep doing that they shouldn’t be doing in these early stages are things like bookkeeping or doing your own books in general, doing your own accounting, not hiring a CPA DIYing your own legal. This is one that I did a couple times. I never knock on wood, wound up regretting it, but certainly things that I could easily ever regretted. It had those gone sideways when I downloaded a template for a contract and edited it myself. I think founders who are doing audio video editing in the early days are doing themselves quite a disservice. Audio and video editing are so fulfilling. I dunno if you’ve done it, but it just feels like you’re getting stuff done. 

You’re doing something with your hands and when you ship it, it’s a better end product. It feels really good to do, but it is a tremendous waste of time because audio and video editors even really good ones are what, 15 to $30 an hour? I mean, obviously more expensive and less expensive, but this is an easy one to outsource. Another one that I see founders doing and kind of making a reason for it is continuing to handle their email and live chat support. Now this one depends because if you’re doing high touch sales with a high ticket product and you’re only doing a few sales now and again, then you probably don’t need a support person. But if you do have a wider funnel, lower touch funnel where you have a lot of volume coming through, email support and live chat support if you offer it are some of the first things that I look to outsource. 

Now, the reason I hear a lot of founders keep doing it for way too long as well, it’s only 30 minutes a day and I want to be in communication with my customers. This is the way I keep in touch and get their feedback and hear what should develop in the product. Now, both of those are kind of reasonable. However, I will say that with pretty much every product I’ve launched, I have hired part-time support help. Sometimes that part-time support help would swing across multiple products I owned. Sometimes I would just overpay them for the hours they were working to say, look, you get a minimum of 10 hours a week. I know I don’t have 10 hours of support yet, but I’m going to bring you in and you can write KB docs or you can help with onboarding or there’s a ton of other stuff that I can find depending on your skillset I can find for you to do to kind of fill that time. 

So even if you don’t have a ton of support or it’s sporadic, I’ve always figured out a way around that. So I just don’t believe it as an excuse because it’s never one that I’ve used and I’ve always outsourced support within a few months of taking over or launching an application. The other thing about not being in touch with your customers is that I tend to be known for being in really close contact with my customers. Whether I was running SaaS companies or now MicroConf, TinySeed writing books, I talk with people a lot and putting a support person between me and all the end users did nothing to curb that. It did nothing to dissuade me from talking to and hearing from my customers because my support guy, Andy would say anytime there was new feedback, new input, anything he thought was novel or that I should know, he would either cc me on it or he’d just sign it to me. 

Once it was resolved, any of the rote tasks or the rote responses that he could just hammer out, he would get back to ’em. He would close. I didn’t need to see over and over that someone wanted to reset their password or someone had a question about pricing. Now, if those questions came in a lot, Andy would then say, Hey, a lot of people having questions about pricing, can we clarify this on this page? So there is a key factor here of hiring someone in that support role who is good and is willing to escalate things to you or at least pass things along that they think are notable. Another thing that I regretted, I remember regretting this in the days of Drip was continuing to handle social media for my products. It’s not that I should have hired it out, I just don’t think I should have done any of it. 

I really don’t. Social media did so little for us as a SaaS tool. We were not Intercom and HubSpot and Salesforce. We were a tiny bootstrapped product that was growing and social media was nothing but a headache if you want to know the truth. And if it drove five customers in the entire history of the company, I’d be shocked. And so what I would do these days, I would just get off social media. I wouldn’t try to hire someone for it. I wouldn’t use it as a marketing approach. For now, I would focus on blocking and tackling on SEO, on content, on sales, on real inbound marketing, on integration marketing, on attending live events, on going on podcasts, on talking to my customers. There’s so many other things that I would be doing to not waste time because social media is a distraction that masquerades itself as productivity, and people justify it by saying, well, I’m working well, I’m marketing. 

No, you’re not. You’re not marketing. You’re getting on social media and you’re frankly feeding an addiction that these apps are really good at feeding and they have entire teams engineered to make us feel this way to make us feel productive when it’s actually a distraction. So if I were just starting out today, I would focus on marketing and sales, and I would ignore social media altogether until such a point that it became important. And frankly, there are TinySeed companies doing millions of dollars a year that still have almost no social media presence. So it is not only possible to get there. I would say it is easier to get there if you’re not focused on that distraction. And lastly, the thing that you’re going to have to weigh as a bootstrap founder is the next sentence I’m going to say, which is, I know some devs and I was in this spot where I regretted continuing to write all the code. 

Now, some devs bootstrapped because they want to write all the code, realize that will probably hamper your growth. But if you’re okay with that, that’s why you’ve bootstrapped. So you can be in charge of this and you can dictate the limits or the constraints that you’re willing to put into your business. But I believe that code is usually a certainty. Code is something you can hire someone to do because that next feature does not have any risk versus marketing. And sales usually have a ton of the risk as well as product like deciding what to build, how to take feedback in, how to find product-market fit, all those things are very risky. Those are things that founders should be focused on. I do know some developer founders who continue to write code well into the millions of a RR and even tens of millions for that matter. 

But usually, inevitably they do step away from it because they realize at a certain point it’s just not the best use of their time, even though they love doing it. And to cap this off, Tobe didn’t ask this question, but things that I never regretted doing or spending time on and I never regretted keeping under my purview and not outsourcing, we’re talking to customers constantly. We’re designing the product, and I don’t mean visual design, but deciding what to build, how it was going to operate, how are we going to architect this? What’s the API going to be like the real nitty gritty decisions around building the product. And the third is marketing and sales. I don’t know of a seven or eight figure TinySeed founder that has outsourced or delegated their marketing and sales before they hit a few million in a r. Now, a lot of folks may hire ahead of growth or ahead of marketing, but it’s to take over an effort that’s already in play. 

You’ve heard me talk a lot on this podcast about zero to one and how hard that is as a marketer or as a salesperson and as the founder, I’m a staunch believer that you need to keep that under your own purview until you’ve proven it out and you’ve built it into a process that can be handed off to someone else. So thanks for that question Tobe. I hope it was helpful. My next question is from Miguel Sarena. And Miguel asks, how do you decide to do it yourself versus hire a growth agency to do paid ads, SEO partnerships, et cetera? So this actually piggybacks really well on the last point that I was making is that in general, there are a few roles in a SaaS marketing department, right? There’s marketing strategy, which is deciding, I dunno, what do we try next? What do we do next? 

Where do we put our efforts? So it’s very strategic thinking. High level. There is marketing implementation, which is where you’re an individual contributor and you are clicking the buttons in the Google AdWords console. You are writing the articles or editing the articles and building links and doing that work of SEO or in terms of partnerships, you are going out and building the relationships yourself and getting all that done. So those are individual contributor roles or folks who are actually boots on the ground. And then the third role really is project management, which is kind of making sure everything gets done and there’s more nuance than this, but fundamentally, that’s how I think about a SaaS marketing department, especially in the early stage. So the question of how do you decide to DIY versus hire a growth agency is that as the founder, I would not try to outsource marketing strategy and frankly, project management, maybe I would hire somebody to do it, but realistically, marketing strategy, deciding what to do in what order, how many resources to put behind it, that’s something that me as the founder, I would want to learn how to do. 

In the old days when I was truly, truly bootstrapping and had almost no money, I then had to go learn the marketing approaches. So I also was the Google Ads person. I was the person doing SEO, I was the person doing partnerships. That’s what I had to do. Now, if I’d had any funding, I would’ve hired out those individual roles. And so these days, if you have any modicum of money and you can pay someone who really knows Facebook ads or really knows Instagram ads or really knows Google ads or LinkedIn ads or Twitter ads, I like coming up with the strategy and then hiring someone to implement that specific approach. And the reason is is that if you try to learn it and you try LinkedIn ads and they don’t work, you don’t know if you’re not good at them or if they don’t work for your business or your customer type. 

But if you hire someone who you think is pretty good and you get references and you pay them a couple grand a month for three months and they run ’em and it just doesn’t work, you at least have some modicum of confidence that LinkedIn ads for now probably aren’t the best fit for your business. And so individual contributor marketing roles and sales roles, frankly, like S-D-R-B-D-R stuff are things that I consider hiring out before a million, 2 million, 3 million. And when you’re on a budget, let’s say you’re doing 20 KA month, you don’t have the money to hire an amazing growth marketer, but you might have the ability to hire a freelancer who’s good at SEO or a small micro agency who knows how to do Google ads or LinkedIn ads, or you could hire a part-time biz dev person, which is a head of partnerships to handle those for 10 hours a week of work where they’re focusing on doing that. 

Now, that still means that you are saddled with the strategy and potentially the project management, but that’s the way that I see it working, trying to outsource marketing strategy when you haven’t gone from zero to one yet. I mean, you’ve heard us talk on this podcast. I’ve talked with Derek Rimer, I’ve talked with Ruben Ga as I’ve talked with Craig Hewitt, I’ve talked endlessly on this podcast solo, and it’s just the pattern that I see. People aren’t able to hire out sales and marketing before they get to a repeatable process. And usually that’s when you’re in seven figures of a RR. So thanks for that question, Miguel. I hope that was helpful. Are you drowning in challenging tech decisions? You should check out today’s sponsor tech stack. Unlike typical staffing agencies, these folks are startup specialists. With over a decade of experience in startup software development, tech stack can help your startup build an MVP that’s designed for explosive growth, rapidly expand your team for new features or optimize your existing code base for peak performance. 

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My next question is from Casper Vaughn Reed. Casper indicated their SaaS is doing $17,000 in MRR and asks. I have a product that caters to one-time events. It allows you to create scoreboards and leaderboards and often gets used for seasonal sports and corporate events. Revenue growth has been good around five to 10% month over month, but it’s mainly come from one time transactions. My question is how do I build up a healthy subscription business? I used to have a monthly subscription, but MRR peaked just below 10 K, 90% of my subscriptions churned giving one-time use as a reason. Can I fix it? Do I even need to fix it? Hope this question is an interesting one. I like this question because it really does call out the thought that not every business should be a subscription business. And there are some businesses or some apps or tools or utilities that people may only need to do once or once integrate while maybe it’s once a quarter, once a year. 

And those types of businesses are much more difficult to turn into subscription companies for obvious reasons. So one option is to just not worry about it and to take your 17 KA month. And I guess I said at the beginning of this question that it was 70 KMRR, and that’s not true. He wrote it’s 17 K of monthly revenue. And so I said MRR, because of course I think in SaaS and everything’s MRR, but in this case it is monthly revenue. Take your 17 K and enjoy it and use that to stair step your way up to recurring revenue. That is one option. Another option is to do what a lot of SEO keyword tools have done. When you think about people doing SEO keyword research, if you’re not an agency and you have one website, you often need to do keyword research infrequently. Maybe it’s once a year, maybe it’s once a quarter, maybe it’s once every six months. 

And so churn in those tools can be high. So what have those tools done? Well, they’ve built in things that you would use on a weekly or monthly basis, rank tracking to see where you rank for the keywords that you’re trying to rank for website quality monitors or the SEO monitoring of your site to say, oh, you have broken links, you’re missing these tags to keep everything up to date and in sync and operating well, any type of thing that someone might want a recurring use out of or that they might want to monitor or use on an ongoing basis is one approach to trying to become a subscription tool when you’re currently a one-time use tool. Another way that I see bigger companies doing this is they say, you can only pay annually and you get a year subscription for X amount of dollars. 

And that’s really a tactic that you can use for this. Personally, I don’t love it. It just feels a little like Verizon making their pricing impossible to figure out so that you can’t actually price compare between their own plans and the plans of their competitors. But that certainly is one way that people fight churn is to only sell annual subscriptions. And the problem is there’s problems with it, right? Your customers might get a little miffed if there are other options that are one-time use that are cheaper, they’ll go use them. They will often complain, oh, I used it once and then maybe potentially do a chargeback, ask for a refund. There’s a bunch of challenges with that, but it is an option that I wanted to throw out in the spirit of brainstorming and getting all the ideas out there. And I think from a high level, those are probably the three things that I would consider. 

And probably in your shoes, I would try to make this subscription by building other stuff and seeing if it works. If I had the energy and the excitement and the motivation to do it. And if it doesn’t work, then I would do plan A, which is just leave it as one time and use that to stair step your way up. I don’t know if it’ll work or not. I don’t know if there are other features, other things you can cater to that these folks are trying to do on an ongoing basis. I just don’t understand the business well enough. And if you have absolutely no ideas for how to do that and you’ve asked your customers and they have no ideas for you and you ask your mastermind or a co-founder or an advisor or your spouse or a good friend or this podcast and no one has any ideas, then yeah, there are tools that really just shouldn’t be subscription. 

And that may be the case. I of course, always like to at least try to invest some elbow grease into it. First, I actually did this with T net invoice back in, I dunno, whatever, 2005 or six where it had peaked. It was a one time sale as well, $300 one time with like 20% maintenance a year, and it had peaked between three and 5,000 a month. And so in any given month it was great. It was making my house payment plus a car payment, which I didn’t have because I had big cash for the car. But you get the idea. It was just a nice side income. As I worked full-time during the day and I really tried to grow that business, I was like, I want to get it to 10 K, 12 KA month so that I can quit my day job. 

And I spent about a year nights and weekends trying to do that before I realized this is a step one business. Now that term didn’t exist then hadn’t come up with the STA step method. That would be what, seven years later maybe. But in retrospect, it was something that I never regretted putting that time in and trying to grow it. I learned a lot during that time about what worked, what didn’t work. And when I got to the point where I was out of ideas and out of motivation, then I put it on autopilot and autopilot’s not real realize every 18 months Google would slap it. A competitor would come up, something I’d need to update the code. There were all these things that would happen, but as autopilot as you can make it. And then I moved on to my next thing, and that is actually when I built out a portfolio of products. 

Now with a portfolio of products, never try to grow more than one at a time. You focus on one, you get it to grow, and you get basically that recurring traffic that then builds hopefully recurring revenue and then get it to the point where it’s stable and maybe you autopilot that one too. And so I stacked a bunch of step one businesses to get myself to step two, to buy out my own time, quit the day job, and then I moved on to true recurring revenue with step three. That tends to be my approach is to try things that I think could work that I have the motivation to do and that I think I can learn from whether they work or not, whether they fail or succeed. At least I’ve learned to something from that. So that would tend to be the approach I would take. 

But you of course can look at your own personality and say, do I want to do that? Do I want to try to make it subscription? Or do I just want to take this amazing revenue that is generating and use it to build that standalone SaaS or true recurring revenue? Thanks for that question, Casper. I hope it was helpful. My next question is from Benjamin Hoy on X Twitter, how do I decide whether a customer type is worth selling to or targeting? I have consumers buying my SaaS, but also schools contacting me and occasionally small businesses. How do I decide whether targeting one or the other is worth it? In my experience, you just have to try. So first of all, there’s a difference between selling to and targeting, selling to if they’re approaching you inbound, what’s the real risk there? The risk is a school approaches you says, we want to buy it. 

And you say, great, it’s $500 a month or a thousand dollars a month. Make sure that you charge enough, by the way. And if it’s a school actually charge per year. So 6,000, 12,000, 25,000 a year, whatever you’re going to charge, charge enough to make it worthwhile. And you send them this quote and you can read founding sales by Pete Kanji or you can follow Jen Abel, Matt Ock, Stelli fte, some of the sales folks in the SaaS space and learn, Hey, how do I kind of navigate this? And if the school comes back and says, well, we need you to sign a big security checklist or fill out this 30 page doc to close the deal, then depending on what you’ve charged, do you know if you’ve undercharged and you need to turn down the deal, or if you’ve charged what 30 grand a year, then it becomes worth your time to fill out all of that and deal with procurement. 

So that’s the real danger is that you get into a sales cycle or a sales process and you realize it’s more headache than is worth it. And frankly, it’s going to be hard to know until you try it. The biggest thing though, whether it’s schools or small businesses, is charge enough to make it worthwhile. So charge a little more, especially if you’re resistant to doing it, charge a little more, charge a lot more than you think you need to. And if they say no, what are you out? Nothing. A conversation. And if they say yes, make sure it’s worth it. My dad, who was an electrician for 42 years and became a project manager, used to say, there are no bad jobs. There are only jobs without enough money in them. And what that meant is no matter how grindy a project was, if you had enough profit in that, then it was worth it. 

Similarly, when you’re selling to schools or businesses or enterprises, there are no bad deals. There are only deals that aren’t worth it. You didn’t charge enough. I will tell you that most small businesses what they have a single decision maker, they’re relatively easy to sell to, but if they’re non-technical, I dunno what your product is, if they’re non-technical, then there can be the onboarding headaches, right? This is customer pain versus competitor pain. And so you get to decide. But if you have consumers buying this, you probably already have that. I can’t imagine selling to a small business, that process is going to be very different than selling to an individual. Schools might be different, although private schools and language schools in that tend to operate like small businesses where they are a for-profit and certain people, managers or whatever have credit cards and they often buy a small business. 

If you get into public schools, K through 12 universities, the procurement and all that can be an annual seasonal budgetary cycles. There’s several TinySeed companies that deal with this, and it is a bit more of a pain. But for me, if I were trying to decide whether to sell to them, if they’re already approaching me, I would give it a shot a few times and see what it’s like. Targeting them is another question. Targeting them implies you maybe update your positioning, your H one or you at least add some landing pages. You start doing some SEO for the terms they’re searching for. Do you buy ads? You start marketing to these as an additional ICP. Right? Now, your ideal customer persona or ideal customer profile is consumers. Adding schools and small businesses as additional ICPs can be good. It can be good, especially if you can charge more, right? 

What if you have a personal plan and you have your small business plan and you have your academic plan and whatever. They have different pricing and they have different features, and they have different amounts of the value metric that you’re using if you have one. And that does allow you to segment your users and segment that process. And then maybe schools get a demo, and if they’re a one call close and they pay you enough, it’s worth it. And maybe consumers and small businesses don’t. There can be some benefit to it. Now, the flip side of that is, well, don’t you want to focus on a single ICP? There’s arguments on both sides. I have had businesses where there’s one, and I’ve had businesses where there were three or four drip actually launched with four different ICPs and we actually narrowed over time. So I can see it both ways. 

And again, in your shoes, I would ask myself, am I interested in potentially making more money and learning more about how to deal with other audiences and other ICPs potentially growing this business, making it a better business? Because certainly consumers are not going to pay as much as schools and small businesses. I’d ask myself, do I want to do that? Do I want to learn it? And my answer of course would be yes, because I like trying new things. I’m a maximizer and I’m someone who likes to learn things. So that’s my take Benjamin. Hope it was helpful. And with that, this episode will come to a close. Thanks so much for joining me this week and every week. It’s always great to be on the mic with you. If we’re not connected on X Twitter, which is where I asked for these later stage questions. Let’s connect. I’m at Rob Walling and of course if you have later stage questions, feel free to ping me on Twitter or send them to questions at startups For the Rest Of Us dot com. If you have early stage questions, feel free to send them there as well. I have a decent backlog of those and someday I will get back to them. Thanks for joining me again this week. This is Rob Walling signing off from episode 736.

Rob Walling:
Welcome to this episode of Startups of the Rest of Us. I’m Rob Walling and this week I talk with Ian Lansman, the founder of HelpSpot. Ian has been bootstrapping for almost 20 years and he started with on-Prem software and then after about 10 years launched a SaaS version. Ian and I have known each other almost that same 20 years from back in the days of Jolen software’s business of software forums. And over the years, Ian has started a few of his own podcasts as well as spoken at MicroConf. I believe I were to guess it was probably around 2014 or 15. So it’s a great conversation because Ian and I have history. I think we were able to pull out some really interesting bits about why he’s bootstrapped for 20 years, why he hasn’t sold and moved on to his next act, how he thinks AI is going to impact the customer service and support space. And if you stick around until the end, you’ll get to hear the company name that is most often confused with HelpSpot and it wasn’t the one that I thought. So with that, let’s dive into our conversation. Lansman, welcome to the show. Thanks for having me on. It’s great to be here. Cannot believe you have not been on this show. No, you’re like OG Bootstrapper.  

Ian Landsman:
Somebody on Twitter reached out and said, I should come on here. And I was like, man, I think I’ve been on there. And then I searched and I was like, man, I haven’t been on there. Wow, that’s crazy.  

Rob Walling:
Yeah, I am glad you reached out. I think someone, your podcast co-host maybe mentioned it on a podcast and I use arvid calls pod scan, and so my name popped up and I went and I’m like, wait, what? Someone wants to go out and start. So I was like, yeah, dude. And I thought the same thing. I was like, I think Ian’s been on it, but to give people context, like 20 year, I mean really early man back in the day, remember how it was, there’s going to be a lot of jokes about how back in the day, there was no customer development, there was no AWS, there was no SaaS right? Where  

Ian Landsman:
Before all that, man, it’s hard to believe we’ve become the old timers. How did that happen?  

Rob Walling:
Oh yeah, big time. Just so people know, you’re the founder of HelpSpot. It’s at helpspot.com, it your H one is your customer service at scale Amplify your support with HelpSpot, the streamlined solution for scaling customer service effectively. So it’s email ticketing, reporting and metrics knowledge base. And since you started so long ago, you were on-Prem for years and then you launched a SaaS. So you have both on-Prem and SaaS, and I think most folks listening know what on-Prem is, but it’s where they actually download your code, your source code, PHP, Laravel, and they will install it on their own server. And then I guess what’s the benefit? Why would today, I would just do the SaaS personally, but the people who still use on-Prem today, why do they do that rather than pay you for the  

Ian Landsman:
SaaS? Yeah, so definitely the majority or SaaS using the SaaS version these days, but we still have new customers in the on-prem and basically there’s some advantages. Big companies or certain specialized companies like in finance, healthcare, they have different rules, potentially laws. They’re also the type of companies that still have IT departments. And so they want to be in control of their own data is usually the main reason in terms of they control the database and they’re backing it up and those things, but also sometimes they’re just running completely off the internet. It’s like, here’s our help desk, it’s for maybe IT in that case and it’s literally not connected to the internet. And so it’s just fully encapsulated in their network behind their firewall. And so they want to do that. And it is an area I think people have abandoned completely that maybe shouldn’t be totally abandoned because there are some, you could charge more. We actually charge the same price currently, but I think there’s a lot of opportunities there to charge a lot more for the people who want it on premise and things like that. So yeah, it’s not that bad if you have a modern SaaS app, it’s not impossible to make an on-premise version. Some things like if you depend on 30 services, that’s going to be hard, but with a little bit of forethought, it’s really not that bad.  

Rob Walling:
We have a few TinySeed companies and I don’t know how many exactly, but when they apply they’ll often say, so we’re SaaS, but we also do on-prem. Is that going to be a deal breaker? And I was like, no, we funded a handful. And again, I don’t know if it’s five or if it’s 10 out of one 70, but there are especially like you said in finance or in certain regulated industries where you really do need or want control of that data and just went on some random spot.  

Ian Landsman:
Yeah, it also gives you some advantages of you’re a tiny bootstrap company, you’re not going to be able to be SOC two compliant, for example, and there’s going to be these type of companies that are like, well, you’re SOC two. Let me talk to your security people, all this stuff. And it’s just like you, it’s you and a couple of people, and so this gives you some outs with those big companies. It’s like, Hey, you know what? You can install in your own SOC two data center and you’re already SOC two and you can, it’s all good and so we’ll charge you for that and everything. And those tend to be also some of the best customers. I mean those are the customers that stay with you for a decade. You’re in there, you’re on a server, just not even the type of companies that are in the mindset of like, oh, somebody launched a new fancier version of this tool we use. Let’s go out and find the fancy. Let’s take a look at this and let’s see if we could switch over. It’s like they’re not, the culture in these companies is not like that, which is great for you as the bootstrapper who isn’t always moving as fast as a VC back company can or some big company that enters your territory. It’s like you got a lot of customers that are just there and they’re happy with your product and they’re not looking around for other solutions.  

Rob Walling:
And I want to be clear, I want to get back to on-prem probably halfway through the interview, what we’re not saying is once.com, right? It’s not you pay once and that’s a different thing. I guess it’s related, but to circle back to where I wanted to start is where is the business at today?  

Ian Landsman:
So we’re profitable doing well, a little under 2 million A RR five employees, I think five, yeah, five full-time employees and a couple of part-time people. So it’s kind of been running, it’s just going, it goes up a few percent every year and it’s fine and we’re profitable and it’s great, and I’ve been running it in sort of that not people say lifestyle, I wouldn’t know if I’d go all the way to lap, but that applies a certain ease of life that I don’t know if I’m all the way achieved. But yeah, not super stressed about that stuff. It’s been nice, especially the last, I think we’re going to talk about the early years. There’s probably more action in some ways, but it’s kind of the last 10 years, my kids have been getting bigger. My oldest just went to college, so it’s sort of been this, I’ve been cool with it being profitable and running well and that’s great. And yeah, I think I’m starting to turn a little corner of some new things I want to do with it as I get more time, kids get older, all that stuff. But yeah, it’s doing well.  

Rob Walling:
This is going to sound like a negative pejorative question, but it’s like how have you not gotten bored? I would get bored. Where 19. It’s next year, 20 years, 

And we all have different personalities and I’m the person who’s never worked the same job even, let’s see, I think MicroConf, well, MicroConf doesn’t totally count, but even for me it was a hobby for many years. But MicroConf and TinySeed now I think are the thing I’ve worked on the longest six years because even Drip from the founding to selling was three and a half years, and then I stayed another two years, so even Drip was five and a half years. So you could tell I just had that personality of like, Ooh, I need to do the next thing. But you’ve stuck with something for 20 years.  

Ian Landsman:
I don’t know. I guess I wouldn’t have thought it would be exactly like that in the beginning necessarily. I think what I’ve done is since it’s been profitable, it’s given me flexibility to do other things along the way. So I ran conferences both in world and online. So similar to what you’ve done with MicroConf as a way to explore things. We built a job board for the Laravel and we run the official job board. I built a product called Thermostat that didn’t really work, and I recently sold off. I built another product that I sold off that didn’t work. So every three or four years I get into something else and that’ll distract me for a little while, probably to HubSpot’s detriment, but also probably practically just something that needed to happen to keep me when I come back to HubSpot after my little excursions, it’s like, oh, it’s still here. 

It’s still doing great. Energized to take on some new stuff and do some new things. And so that’s kind of how I’ve done it. And I think it’s something I’m sure you hear a lot and Bootstrapper sort of problems let’s say, is that you get to a certain level of success and it’s just a little bit of a weird zone where it’s not big enough to sell for the amount of money that’s just like, oh, I’d never have to work again, money, I’m totally set. Don’t worry about it. It’s not quite big enough for that really. Maybe if I sold in 2021 right at the top there. So it’s never been really that. I’ve never had any really appealing offers that’s like, oh yeah, I should sell it. Obviously you could just sell it to sell it and move on to the next thing and still have a nice amount of money, but it’s like, ah, who knows if the second product’s good? I’ve never built a really good second product. I mean, some of these things have been okay, but it’s hard to build a second product, so it’s like, ah, I got the first product that’s done so well. I’m just going to stick with that. That makes  

Rob Walling:
Sense. Let’s go back to the beginning. So you launched it in 2005 and you told me that you quit your day job and coded for six months, which is exactly what we tell people not to do today, right? Don’t quit your day job and live off savings or you said your wife was basically supporting you during that time, but what a gamble To me, it’s terrifying to do that, right? Were you scared at all and why do you think it actually worked? What was that time?  

Ian Landsman:
Yeah, it was, man, it’s so wild to think about now. The world was just incredibly different. In 2004, it started, I wasn’t even a programmer in college or anything. I learned the program on my own and then I was like, okay, I want to do a product. We went through a million product ideas, whatever, finally came on this HubSpot idea because I used a really awful help desk at work that was mainframe based and didn’t accept email and all this stuff. That’s where the world was back then. Just to set the stage, A lot of big companies just used had no help desk or a very poor help desk solution. So it was like, okay, I want to do this. Both me and my wife agreed it’s a good idea. So we had just bought this condo, which was a little bit pricey. I was a little nerve wracking. 

We sold my car, so we had that money, put it in the bank, so we just went down to the one car. My wife kept working, and then, yeah, it’s like I would never give anybody this advice now, but it’s just such a different world because it’s like there was no choice, there was no real frameworks, there’s no Ruby on Rails, no Laravel, none of these things. And so it’s like, okay, I know PHP, I’m just going to have to write it. I don’t even know JavaScript. So I’m literally sitting there with the JavaScript Bible, which is a four inch thick book, learning JavaScript while I’m building the app. And yeah, it’s like I always say I could build V one of HelpSpot today probably in three weeks or something with if I just use all the modern tools and everything we have and just do the very basic version that it was in version one. It’s like, yeah, you could do it, keep your job, do it on the side, all that stuff. But it just would literally never happen. I mean, I worked six days a week, 12 hours a day for six months, and even then it wasn’t great. It was just functional. And so that’s just what you had to do back then, or it wasn’t going to happen. Those were the options  

Rob Walling:
When back when people would raise half a million dollars with just an idea that really doesn’t happen anymore. But you had to do it because as you said, you had to write every line of code and there were really no libraries, and it was, yeah, it was a lot more to be done.  

Ian Landsman:
Even the raising money is something I thought about, but you got to remember in 2004, the dotcom bust just a couple of years before that, the whole VC world was kind of a mess. They weren’t looking to fund individual guys with an idea too much. I’m sure there was some investments, but it wasn’t very common. So we were all, you were there, we were all in these bootstrap circles, Joel on software forum and all kind of just working together to figure out how do we ship software without really any big funding.  

Rob Walling:
That was the thing is the narrative was still raise a bunch of money, but there was Joel and there was, well, it was you  

Ian Landsman:
Eric Sink and  

Rob Walling:
Eric Sink and the  

Ian Landsman:
Wedding Patty 11 was there, Patty  

Rob Walling:
11, and, and that we all knew each other by name, and it was like, oh, yeah, and we’re all trying to figure it out on our own, but also together of like, is this even possible to do? There was no narrative, there were no books on this topic. There were no podcasts. You just, it was forums, right? I mean, that’s what I remember.  

Ian Landsman:
Yeah, just forums. That’s it. There was not much else. Those of us in the community had blogs or whatever, and we talked about it, we talked about in the forums, but yeah, no Twitter, right? No YouTube, nothing. There was not a lot of nice ways to get information about how people do it and different strategies and all that stuff. Joel was writing some books. Eric Sink wrote some awesome books. That was kind of it.  

Rob Walling:
And I remember around that time, I think I had gotten an invoice in oh five or oh six, and I didn’t know, I was like, well, how do you market do SEO AdWords, whatever? So I would go look at, there were no books about startups doing this. It was all the info marketer internet marketing stuff. And so I went and learned copywriting from them and applied it to startups, and I was like, oh, they split tests info. A lot of ’em were very scammy info internet marketers course. So I would take that and then translate it to me, which was the not scammy version. So they were doing split testing, they were doing AdWords, they were doing SEO O, and I learned from those folks and translated it in, and no one was really talking about that in the startup space. It was like startups were raise a bunch of money, go viral and have a big launch party, buy billboards. It was this really odd thing of, it was a weird  

Ian Landsman:
Time,  

Rob Walling:
It really was. But folks like you starting HubSpot, you needed nuts and bolts. How do I get in front of people? How do I sell so that I can have a paycheck next week? Let’s flash forward six months. So you spend six months building, you get to launch day. How do you get the word out?  

Ian Landsman:
Man, it is crazy. You’re going to appreciate this being an email newsletter kind of guy. So I built a list, an email list of, and this was really basically just people from the Joel Software forum and a few people follow my blog, and it was literally like 84 people right now. People launch are like, oh man, I only have a thousand people on the list. What are we going to do? 84 people? And the first month we had $4,000 in sales, and it’s like some people brought it into their companies and brought it to their boss and whatever. And I had started on the SEOA little bit before launch two with the landing page and stuff and help desk software in terms of web-based help desk software was new. So we were first or second for the term help desk software for several years, just kind of like Blue Ocean or whatever, and that was our main marketing channel. But yeah, the initial launch was this 80 person email list. Then the SEO kind of picked up over those first few months, and then that was, it just started going, and we still have a lot of those customers today, but that was the kickoff.  

Rob Walling:
So someone listening to this who has tried to launch and failed thinks you got $4,000 of sales in your first month, what a month. I do want to remind them it’s not 4,000 of MRR.  

Ian Landsman:
No,  

Rob Walling:
It is 4,000 effectively one time. Did you have a maintenance fee each year or how did that work?  

Ian Landsman:
Yeah, so that’s a great point to nobody out there listings even going to think of it that way. Yes, it is not 4,000 MRR and you’re like, woo, baby. We’re launched and going, yes, it was $4,000. There was a owned license. So you buy the license and you own it, and then yearly there’s a support maintenance fee where you pay that and you get updates and you get support. And so if you don’t pay that, you don’t get updates and you don’t get support. So the good thing though is that it was effectively a recurring revenue, and this is all annual, so it was 4,000. It was like a 30 something, 30%, let’s say was the support fee. So it would be whatever it is, like 1500 bucks or whatever a year after that. So each year, that first group of $4,000 would pay us $1,500 to maintain support and updates. It’s a B2B app and it’s a heavy use B2B app where it’s not just like we use it once in a while. It’s like, no, you’re paying people full salaries to sit in this app 40 hours a week and use it. And so generally most companies are going to pay that support, and they did. And so that worked out good long term. But yeah, absolutely. It wasn’t like, oh man, this is monthly. Four grand a month was definitely not that.  

Rob Walling:
Do you remember what your pricing was? I’m just trying to get an idea of how many copies sold to get four grand?  

Ian Landsman:
Oh, geez. I think it was one 50 a license,  

Rob Walling:
So it would’ve been like 30, well, not quite 30, like 26 or 27, somewhere in there. Licenses.  

Ian Landsman:
Yeah, something like that. That’s pretty good. Sounds right.  

Rob Walling:
That’s not bad at all.  

Ian Landsman:
Yeah, I was happy. I was like, whoa. And then we mined that mailing list and so the second month was like a thousand dollars or something crazy, and it was a little nerve wracking there, and then it went up after that and just kept going. It’s an ASCO,  

Rob Walling:
It sounds like.  

Ian Landsman:
Yeah, exactly.  

Rob Walling:
Because the thing that you don’t remember, if you haven’t run a onetime sale business, the sales numbers are a lot higher. T net invoice was my first product and it was 300. Well, it was a hundred when I bought it. I acquired it and then I raised it to 300 and I would sell seven to 10 copies, sometimes up to 13 copies or whatever. So you’re talking like two, three, 4,000 a month. And we did have 20% maintenance, but it really was one time. And so if we lost our SEO rankings or during the financial crisis, we would lose 80% of our revenue overnight. So we’d go from three grand down to 500 because nothing was recurring. So you basically front load it, right? It’s like they’re paying for a year is, which is actually good when you’re bootstrapping, so you get a lot more cash upfront,  

Ian Landsman:
Keeps you in business.  

Rob Walling:
Yeah, it’s pretty nice.  

Ian Landsman:
Yeah. Well, I think that’s too, with the invoicing software, it’s like it’s a little more like, Hey, we use it, it works. Well, maybe with some of us sometime we’ll pay him his renewal, but we don’t really care that much. It’s operational. It’s like if you can get to that next layer of like, no, we have $2 million in payroll using this software, and now we’re taking this big risk. If we’re down for a day, it’s a big problem and we’re losing money and more directly. And so I think when you’re thinking about the kind of business to get into, there are advantages to that kind of thing where it’s a product that people use very heavily, very competitive nowadays too.  

Rob Walling:
So you had this on-prem software from oh five until you told me 2015 is when you launched a SaaS version. And the question that popped up in my mind around that is 2015 feels late to launch. SaaS SA first became kind of in the zeitgeist in the, I would say oh seven to oh nine, that MailChimp became a thing. And there was other, I mean certainly there was SaaS before that, but it wasn’t called that. Remember ASPs and whatever the other acronyms, Basecamp, Basecamp, Salesforce, constant Contact, they were around. Even AWeber was really early, but I remember by 20 11, 20 12 SaaS, that was a thing. It was like going, so I would think you having this on-prem would have moved to SaaS, not moved, but just deployed a subscription version earlier. So what was the delay? And I’m not acting like you launched it late, but it’s just in my head. Yeah, that number. So what took that time?  

Ian Landsman:
I think it was really a couple different things. Definitely when I launched, I knew about SaaS and made the decision to not make it SaaS because I didn’t know anything about running servers. There was no money to hire somebody else to run servers. And so I just feel like that wouldn’t have ultimately worked out very well. So it was on premise and then it was kind going along and it was busy and it was fine. And the big, obviously when I took more notice in terms of direct competition was you had Zendesk, which I think was maybe 2008 ish, something in there, and it’s like, oh, okay, this is really becoming a thing now, so I should probably start thinking about more. But we did even before Zendesk earlier on, have a partnership with a hosting company and they ran the hosted version of HubSpot for people. 

And so it was a separate relationship with them. It’s like you came to us, you bought the licenses, you went to them, you paid the monthly hosting fee, but they would actually install help spat and run it for you, and if there was a problem with the server, they’d fix it. So we had this sort of in-between, so that did let us delay. Then another sort of aspect to it is that HubSpot was not in any way conceived as a SaaS, so the data structures are not correct for SaaS and things like that. And so in that earlier phase of the SaaS rise, I think it would’ve been pretty tricky to do it. And what kind of happened later on is we had, then you have AWS, you have really cheap servers and things like that, and so it made it simpler for us to make the move because how HubSpot SaaS version runs is actually everybody gets a tiny AWS like nano server and everybody’s on their own server. 

We do have a centralized big RDS database with multi failover and all that stuff, but we basically deploy it as your own little HubSpot server, and so we don’t have to make the database work for multi-tenant and all these things, and the cost is outrageous. By that point, it was like, okay, two bucks a month you can have a little mini server on AWS. And so that’s the way we rolled it out, and this way we can keep the code base the same for on-premise and cloud and as we go, I think it’s going to start to, we do already make a lot more accommodations for the cloud version since it’s more of the new customers, but that was kind of the transformation there basically.  

Rob Walling:
How painful was that  

Ian Landsman:
To go on  

Rob Walling:
Premises? Oh, it’s painful. Was it brutal?  

Ian Landsman:
Brutal. Very painful. I mean, because there’s a lot involved had to switch. We moved to subscription pricing at that time, but I didn’t want to force everybody’s subscription pricing. And so it’s like if you want to be on the cloud version, you have to move to subscription. So even on-premise customers, now if you’re a new on-premise customer, you’re on subscription. Everybody’s on subscription and it is annual subscription, which is another thing I think founders don’t think enough about is just only having, I’ve only ever had annual, and I think it’s served me pretty well. We are going to experiment with the monthly option here, but again, if you’re in the kind of business where it’s often, it’s literally a committee we’re dealing with and they’re evaluating multiple choices and they’re not really going to switch off on a whim after three months, they’re making a commitment on their end, so not that big a deal. 

So that was kind of a big one. The subscriptions, the tech. Yeah, it was, oh, the other thing is moving people. So we have all these existing customers and they want to move, and it’s a big app. We have customers at 70 gigabyte databases, and so moving them onto the cloud is quite a production. We also allow a lot of customization. It’s kind of one HubSpot’s differentiators from other solutions. There’s a lot of knobs and dials and things you can do. You can even write your own PHP in certain spots if you want to do something very custom, which is something that other help desk software won’t let you customize on that deeper level, obviously, because no way for them to really safely do that. So we still to today, so we did that 10 years ago. Today we still will have at least usually one a month, but sometimes more of customers coming from on-premise to our cloud solution. And yeah, it’s a multi-week operation usually to not pure time, not like 80 hours, but going back and forth and figuring it all out and they check it and blah, blah. So yeah, it’s a big process.  

Rob Walling:
I was going to ask if you still offer on-Prem or if at a certain point, obviously if you sell, have a bunch of customers using it, paying you, you would let them keep going, but the idea of just going to hubspot.com and the only thing you can sign up for is the SaaS. You haven’t done that. You still offer both. What’s the thinking there?  

Ian Landsman:
And we have had competitors. I think Kyoko was also an on-premise like us, and then they moved to SaaS and then they said, that’s it. No more on-premise. Spiceworks also said no more. So people definitely abandon the on-premise. But yeah, for us, I just feel like we definitely obviously have a good amount of customers who still use it. Like I said earlier, those are some of our biggest, best customers. Been with us 14 years and pay us $20,000 a year, big accounts for us. And so definitely eliminating that would be tricky if I’m forcing them to come up to my cloud or go elsewhere, some percentage are obviously going to go elsewhere just naturally, so I don’t want to do that. I could, of course, like you said, just going forward, but again, it’s like a lot of really great customers are in the on-premise. 

So even though it’s only probably 10% of our new business, it’s a valuable 10%. And also I think we haven’t done a great job marketing it recently, and that’s something I want to actually do better and try to get that actually up a little bit. There are interesting trade-offs with on-premise in that it’s more support for sure. There’s just server issues and sometimes the support person takes half a day on somebody else’s problem ultimately that we end up being responsible for helping them, things like that. But again, they’re oftentimes much more higher revenue than the day in day out customer. And they also, there’s other little interesting things like they often pay by check or transfer, which costs either nothing or $10 versus cloud customers that often pay by credit card and costs 5% ultimately and stuff, which when on $10,000, 5% is a lot of money. 

So there are these little other things too. But yeah, that’s kind of the reasons I still think that there’s something there. And also I think in general, we’re seeing Elasticsearch and databases and a lot of the structural things still are even more so offering on-Prem. It might be literally on-Prem, it might be in your AWS cloud, but it’s your cloud, not our cloud. And so I think there’s just still opportunity there that I wouldn’t want to be totally out of the game, especially because no other help desk software, nobody knew when Help Desk software is offering it. None of the existing players are offering it who didn’t already offer it in the past. And so I feel like it is a little bit of a competitive advantage there where it’s like we’re going up against other poorer solutions than just the intercoms of the world with infinite money. It’s like, no, this can be a little niche that we have some advantages in.  

Rob Walling:
No, I think that makes sense. I may seem off topic, but I have a question for you about, well, you were written on some PHP that you hacked together 20 years ago, but then I know at a certain point you integrated and you’re pretty heavily involved in the community. I think you mentioned some of that earlier. Laravel just raised 57 million, I don’t know, two weeks ago maybe. What’s your thinking on that and what that means for the future of Laravel?  

Ian Landsman:
Yeah, so I think it’s really exciting. I mean, I run the official Laravel job board. Taylor Twell, the creator of Laravel, worked at UserScape with me for three years. My company’s name is,  

Rob Walling:
I didn’t know that. Oh, what a trip.  

Ian Landsman:
Yeah.  

Rob Walling:
Did he work on HelpSpot?  

Ian Landsman:
Yeah, yeah. And some other new stuff. In one of my distraction periods, he worked on some new stuff. He worked on HubSpot. But yeah, I actually found him, he was working at a shipping company and I found Laravel and I was like, wow, this is awesome. I want to have a framework to work on new versions of HubSpot with as well as other ideas. And I didn’t like any of the other PHP frameworks even up to then, which is 2010 or something like that. So I reached out to him. I was looking to hire a developer. Anyway, I ended up hiring him. He worked the first three or four months at user scape, just building out Laravel actually in some of the more enterprisey things. It didn’t have already caching and some other things. And then, yeah, we did the conferences together and stuff. Then ultimately he built Forge, which is the main revenue producer at Laravel. 

It’s like a hosting platform or manager. Then that started making a lot of money, and I was like, okay, you should go run that. And so he did. But we’ve stayed close friends and I’m definitely friends with a lot of people in the Laravel community. So yeah, I think the thing is he turned that into a bootstrapped and very profitable business, and again, kind hit that point where he had some bigger ambitions basically to launch this thing called Laravel Cloud, which is going to be Heroku, but for PHP and Laravel, basically, it’s kind of like the shorthand, but that kind of thing obviously requires just even if you have a very profitable business, it’s ultimately you’re going to need a lot of very expensive engineers and lots of servers and security people and all this stuff that starts to get into, if I’m paying, I’m making up numbers here, have no idea what they’re paying. But if you’re paying a security guy $800,000 a year, let’s say, or whatever, that starts to be a lot of money. So to chase those ambitions, that’s what he’s done. So I think so far so good. Like you said, it’s only been a couple months since they raised, so  

Rob Walling:
Now I want to ask you something that I asked you offline, and it was about what’s your biggest fear today? Looking ahead, you’ve run this business for 20 years, and you mentioned it was like how can AI potentially impact this? You want to talk us through your thinking?  

Ian Landsman:
Yeah, so I think this is a topical one. So I think customer service is more directly in the crosshairs of even current AI capabilities to some degree. Obviously you can make the case for like, well, every job is going to be affected or whatever, who knows? But I think this is one where it’s like it’s a cost center. A lot of companies look at As, and they’re like, okay, if AI can do a reasonable job, maybe we’re willing to make changes there. So yeah, I just think it’s a big unknown. I think so far it hasn’t been really disruptive at all, but that doesn’t mean it won’t. There’s definitely been some companies that have made big moves, like Klarna got a lot of press for moving almost all their support to ai, but again, that is a very particular use case where they don’t have a lot of different types of questions. 

Basically it’s like, I want a refund, how do I pay my bill? So I think a very good use case for an ai, they had poor service ratings to begin with, so it’s like, are the AI people going to do any worse? Probably not. So you have some differences there, but yeah, who knows? So I mean on the one hand it’s like those fears of just might consolidate down to a few big AI players who do a fantastic job with it and they just gobble everything up, or is there going to be, is it not going to be a thing at all or more of a middle ground where since we have access to a lot of similar technology, at least ostensibly, right, is we can pay for open AI or whatever else, we can add those tools for the most part, I think there’s going to be probably some things that are going to be beyond our capability, but so I think that’s definitely just a big unknown and we haven’t had that in a long time. And the help desk space, it’s been pretty stable. So this is definitely a new thing that’s out there and it’s like, we’ll see how it goes. We’re definitely adding AI features and maybe that’s just kind of be kind of where it ends up, but we’ll see.  

Rob Walling:
That makes sense. Just out of curiosity, what’s the first one or two AI features you’re adding?  

Ian Landsman:
Yeah, so very early on we did your standard writing helpers. We went farther than most of the other help desk tools I’ve seen have gone where you can define your own prompts and tools for the agents, but still it’s ultimately more on the writing and human creation side. But from there we are working on doing things like auto triaging where it can route inbound tickets to the right categories or right agents and things like that. So that’s going to be one of the first more sort of offensive minded, more active AI elements that we’re going to be adding. And then from there we have some different ideas about how we might do auto responding in a way that’s maybe a little bit safer. So obviously everybody’s trying to go for the holy grail of the AI just responds. You give it anything and it can just respond, but maybe there’s some in-between ground there where it’s more of a human response, but we use the AI to maybe figure out what’s the right response or some different things like that. So some stuff in r and d, some stuff very close to shipping. So that’s kind of where we’re at with it. But it is a big sort of sea change much when I started the company, which is like everybody’s using client server apps or just pure email, and that was the big shift and now it seems like there might be another big shift. I don’t know if it’ll be, it could be bigger than that. It could be less than that. I dunno, who knows, but we’ll see.  

Rob Walling:
So last question for you today before I let you go, I asked offline, I said you named HelpSpot. How did you feel when all these other help desks launched with help? Right, so there was Help Scout and help somewhere else, and what did you say to me?  

Ian Landsman:
Yeah, so those don’t bother me at all. There’s lots of whatever variations, but I thought the spot was kind of my unique thing. I liked the spot and Dharmesh Shaw, who’s the co-founder of HubSpot, was in Joel on software with us and kind of in our circles. And then he starts HubSpot and stole my spot like dude, and now it’s HubSpot. And obviously anytime I say HubSpot and HubSpot and people get confused even more than with Help Scout, although that one does get confused as well sometimes. But yeah, I’d say in terms of naming irks HubSpot,  

Rob Walling:
HubSpot  

Ian Landsman:
Kind of takes the pride from me.  

Rob Walling:
Sometimes that happens, sometimes it happens. Seemed to have  

Ian Landsman:
Done it. I like Dharmesh though. DH is great. Alright. He’s a great  

Rob Walling:
Guy. He’s so gracious and he still, when I wrote this SA playbook, I emailed and said, would you give me an endorsement? And he’s like, of course. And he gave this great endorsement. I put it on the cover of the book. It was so nice. It was like, I’ve been learning from Rob for years. You should too or something. I’m like, oh, you’re the  

Ian Landsman:
Awesome man. That’s crazy. He’s so good. Yeah, a few times I’ve talked to him over the years too. It’s just like, yeah, he’s still like the guy from in the for, you know what I mean? It’s like he’s a billionaire now, but he’s still kind of just humble. The same guy.  

Rob Walling:
Humble and just,  

Ian Landsman:
Yeah. That’s great.  

Rob Walling:
Ian Lansman, thanks for joining me today. Folks want to keep up with what you’re working on, obviously helpspot.com to see the app, and you are Ian Lansman on X Twitter. Anything else you’d like folks to check out? I know you have a few podcasts.  

Ian Landsman:
Yeah, the other thing, I guess the other main thing, if you want to keep up with what I’m doing is mostly technical is my podcast I do with Aaron Francis, and it’s more somewhat technical. There’s a little bit technical, but mostly it’s business and other topics, so it’s more entertaining, I’d say. Yeah, so check that out. We have a lot of people seem to like that, so that’s been fun the last year or so, working on that. Again, one of my little, I can’t really justify it on an ROI basis purely, but it’s a fun thing that I get to work on and is exciting to do.  

Rob Walling:
Awesome.  

Ian Landsman:
Yeah, so check me out  

Rob Walling:
There. Thanks again for coming on the show. Thanks for having me. Thanks again to Ian for coming on the show, and thank you for listening this week and every week. This is Rob Walling signing off from episode 734.

Rob Walling:
I had this epiphany on the spot, and I’d never said this before. I said, weaknesses are fine. We all have strengths and weaknesses. You don’t want blind spots. A blind spot is a weakness that you are not aware of. When you have a weakness and you know about it, you can work around it. If you are the founder who bounces from one thing to the next next who follows each distraction and you realize, you know what, I’m never going to focus on anything long enough to build something great, then you can acknowledge that weakness and stick with things longer than you think you should. But if you’re not aware of it, how can you work around it?  

It’s another episode of Startups. For, the Rest, Of Us. As always, I’m your host, Rob Walling. This week I’m flying solo As I talk through a few topics I’ve been mulling over these past few weeks and months. The first one is going to be about distractions, good distractions, bad distractions, micro, macro, and talking about how to avoid the ones that will derail your plans. I also want to talk about weaknesses versus blind spots. I want to look at how everyone, even the successful founders around you struggle. And then if we have time, I’m going to cover a topic about how you don’t have to be right all the time. In fact, you don’t even need to be right the vast majority of the time to be successful. Before I dive into the topics, if you haven’t picked up a copy of the SaaS Playbook, it has sold just about 30,000 copies.  

I actually haven’t run the numbers in about a month, and last I checked it was at about 29,000. The book is selling really well, and the reviews and ratings and comments both on X, Twitter, Amazon and other places are really encouraging. And it seems the book is resonating with a lot of people. If you haven’t picked it up, SaaS playbook.com or you can get it on Amazon or Audible if you have picked it up, I would love it if you leave me a five star review on Amazon or Audible. That helps people find the book and it helps people gauge whether it’s going to be helpful for them. And with that, let’s dive in to my first topic about distractions. I was going to title this segment, how to Stay Focused even when there are things around you that you’d prefer to be doing. What I realized is all distractions are not bad.  

So I have a couple dichotomies in this section that I want to talk through. The first is I do think there are good distractions. There are distractions that help your mental health. There are distractions that make you happy. There are distractions that have long-term benefits that might distract you from your goals. Your goal is to launch a company or build a company to five, 10, 15 million wherever you’re going. And a quote distraction is anything that maybe you have to spend time doing that isn’t that? And examples of good distractions are going outside, going for a walk, working out, spending time with your family, your kids. Now you might be saying, Rob, spending time with my family or my kids, my spouse? That’s not a distraction. It’s not. I don’t view it as that in my worldview per se, but if we’re looking at a technical definition of your goal is to do X, anything that isn’t getting there is, you could phrase it as a distraction from that.  

Even having a lovely conversation with a friend when you should be focused on shipping a podcast episode could be a good distraction. That’s actually what happened to me with this particular episode. It was Friday afternoon and I wanted to ship this episode so that our editor could start getting it ready. And I was having a delightful conversation that wasn’t getting me towards this goal of shipping this episode, but I asked myself, what is the cost of engaging with this distraction? And that’s a thing that I want you to ask yourself about every distraction that comes up from here and for the rest of your life. Can you imagine if I could actually have that impact on your life, that’d be great. But even for the next day or the next week, what is the cost of engaging with this distraction and what is the benefit of engaging with it?  

The benefit of spending time with your spouse or your kids or people you love is scientifically proven. Humans are so community and relationship driven, there are all kinds of benefits. What is the cost? Well, the cost is I can’t spend that time working on my product or my business or getting that podcast episode shipped. And so as long as you do it in moderation, you’re fine. You spend an hour or two hours or three hours doing something that is a distraction. You can get your work done, you can get your stuff done. If you spend 30, 40, 50 hours a week, some folks who get addicted to video games or addicted to a substance, addicted to alcohol, and they use these things as a distraction, that’s when it breaks down, is when it moves from moderation to perhaps overindulgence. So when you ask yourself, what is the cost of engaging with this distraction?  

Well, if it’s a half hour conversation with a friend, if it’s an hour or two with family, friends or kids, in a lot of cases, that’s going to be the right call. The benefit outweighs the cost in those instances. But then let’s look at playing video games 30, 40, 50 hours a week. What is the cost of that? Well, it’s pretty significant. I imagine it’s going to take a toll on relationships. It’s going to take a toll on your ability to push your business forward. And while there is benefit to playing a video game or having an old fashioned on a Friday afternoon, there is benefit to these activities that make you happy, might be good for your mental health, they might put you around people that you enjoy spending time with. It comes back to this moderation and the cost of engaging with something for an hour versus 10 hours is much different.  

Now, I’ve talked a lot about in the moment distractions, I might call these micro distractions where it’s spending time with someone and playing video games, whatever, versus macro. So what are macro distractions? These are bigger decisions. Let’s launch an entirely new product. Let’s translate our app into Spanish. Let’s make a huge strategic decision that is going to take months and months and hundreds of person hours to implement. Even building a side project. When your first effort, your startup isn’t growing as fast as you want it to be, is that distraction a good thing or a bad thing? Well, I’ll come back to this. Number one, is it in moderation? And two, what is the cost of engaging with this potential distraction? And the macro ones are a little trickier because the worst distractions masquerade as productivity. I want to say that again, the worst distractions masquerade as productivity.  

Because if I know it’s a distraction, if I know, again, it’s playing video games, it’s anything I do for a hobby, I would say, oh, it’s a distraction from work. Again, that’s not my worldview, but let’s be very black and white about it in this segment. And if it’s obvious, and I know it’s a distraction, it’s okay. But I see a lot of entrepreneurs who think that reading more business books, reading hard thing about hard things or a biography about an entrepreneur, they feel like that is educating them on how to start a company. And to me, it’s a distraction. Masquerading is productivity. One of my most popular blog posts back when I was still blogging was called Startup Founders Should Stop Reading Business Books And don’t take the title literally because isn’t the SaaS Playbook a business book? It is. But in the post I talked about how highly tactical, highly prescriptive books like the SaaS Playbook or Traction by Gabriel Weinberg, even like EOS, things that give you information that actually improves your business.  

I put those in a category training of actually showing you tactics and strategies that will get you there faster. Reading books by Malcolm Gladwell, and even a lot of, I mean I like Seth Godin’s books, but a lot of Seth Godin and just frankly, most business books that are out there are just not going to help you grow a startup faster. Take this as someone who reads 30, 40 books a year, I have 900 books in my Audible account that I read books via audio. Obviously if you’ve listened to this podcast for any length of time, I am Pro book. I’ve just written my fifth book, but I know when I’m listening to most books and most podcasts, even if they are business oriented, that they are a distraction, but many entrepreneurs don’t. And that’s when distractions masquerade as productivity. Here’s another distraction that I see masquerading is productivity.  

In our circles of entrepreneurs, it’s launching another product without marketing the one you’ve already launched. Or how about this? It’s focusing on writing more code or answering support tickets or doing something that’s certain without selling what you’ve already built without marketing and selling the thing you’ve already built. Because that’s hard, it’s scary, it’s uncertain. It’s where the resistance lies. It’s what you don’t want to do as a technical founder. So what are the takeaways from this one? I want you to keep in mind this question of what is the cost of engaging with this distraction and what is the benefit of engaging with this distraction? Because the benefit of reading a business book might be it’s just fun. It’s what I do in my off time. It recharges me, and I understand and admit that this is not being productive. It’s a hobby that I have.  

And I think weighing the cost versus the consequences, as you think about distractions and just being deliberate with your time, that’s it. If you’ve known me for any length of time, the value that I put on relationships and on my relationships with my wife and my kids and my friends for that matter, so you’ll know that I’m pro you spending all the time with all the people that you want to feed your soul. I just want you to keep in mind the cost versus the benefit, and to be extremely aware of distractions that masquerade themselves as productivity. At the end of that story is I had a distraction yesterday. I knew that the benefit of it was, it made me happy, and the cost was that I might have to record this episode on a weekend. And here I am Saturday afternoon recording it. And you know what?  

That’s the decision I made. I’m here for it. My next topic is another dichotomy. It’s weaknesses versus blind spots. So I was interviewed on a podcast last week and the host started asking me about personality tests like Myers-Briggs, Enneagram, Colby, a StrengthsFinder. We were kind of batting some stuff around, and I never remember my results from these tests. I actually have taken all of them, I believe, and what I do is I read through, I take what I can learn from them, I internalize that and say, oh, yeah, I should do that. And then sometimes I’m like, that’s not me at all. And then I kind of forget. I don’t remember what number I’m on the Enneagram. I always have to look it up, but when I pull it up, I’m usually like, oh yeah, that’s totally me. It describes me and my strengths and my weaknesses.  

I think it’s pretty good at it. Now you have to take these things for what they’re worth. Some of them are put together by researchers who have 5,000, 10,000, 20,000 people take these and they normalize the results. And they are quite scientifically, I’ll say, accurate, as accurate as you can get with something like this. And then there are other ones that are kind of made up by people not really tested, and you got to take it for what it’s worth. So I always hold them with a grain of salt, but I have found them helpful for me over the years to learn just a little more about my weaknesses. So we were talking on this podcast and I had this epiphany on the spot, and I’d never said this before. I said, weaknesses are fine. We all have strengths and weaknesses. You don’t want blind spots.  

A blind spot is a weakness that you are not aware of. When you have a weakness and you know about it, you can work around it. If you are the founder who bounces from one thing to the next, next who follows each distraction, who maybe has a little bit a DHD, whether it’s clinical or whether it’s just something in your personality and you realize, you know what? I’m never going to focus on anything long enough to build something great, then you can acknowledge that weakness and stick with things longer than you think you should. But if you’re not aware of it, how can you work around it? If your weakness is that you don’t like doing hard things or you don’t want to do or work on anything that you don’t want to work on, and let’s say you are a maker, you’re a builder and you want to write code, you want to build websites, you want to build products.  

If you know that’s a weakness, and you’ll listen to this show or you’ll read books about this topic or hear opinions and advice from folks in your mastermind. If you’re in a community like MicroConf, connect wherever you are getting advice. If you don’t realize that you are constantly doing that and avoiding the hard things and only really doing what you want to do and justifying it with, well, that fits for my personality. You have a blind spot. And the way to know you have a blind spot usually is if you have smart people around you, successful, smart people who are kind of all telling you the same thing and you keep not listening to them and you’re not finding the success that you want. You probably have a blind spot. Blind spots are really tough. The hard part is you don’t know you have them.  

And turning blind spots into weaknesses and learning about a blind spot and kind of admitting that you just have that as a weakness eliminates it, right? So how do you learn about your weaknesses? Well, I think there are three ways, right? There’s introspection. There’s asking yourself, why do I fail at things? Am I the one that starts too many things, never finishes? Am I the one that never starts things after I finish? Am I the one that makes too much? I avoid conflict. I avoid doing hard things, things I don’t want to do, like marketing or sales? Do I avoid hard work? Maybe my weaknesses is I just never learned how to work hard. I don’t have any discipline. Maybe my weaknesses is I’m really disorganized. I think there’s some introspection to be done here. I do think personality tests have been helpful for me.  

I’m not going to prescribe them for you, but I have taken four, maybe five, and I think I listed most of them earlier in this segment. But I have found those helpful for identifying potential weak spots, especially I remember the Enneagram is really good at this. It will say, this is a strength, and here’s the shadow side of that strength because every strength we have when taken too far is a weakness. And I think the Enneagram does a good job of identifying that. So personality test is number two. The other one is people around you and whether you need to ask them, what are the things that I keep screwing up that you’ve noticed? And again, this is maybe it’s your spouse. These are hard conversations. I mean, it can be hard to hear this and just admit like, yeah, that’s me. This is something.  

This is a blind spot that I have that I’m going to turn into a weakness. Again, having strengths and weaknesses is human. Having blind spots is something that if you want to achieve and you want to be a successful entrepreneur, you can do it with blind spots, but they will hold you back. And I absolutely know founders who have blind spots, who ask opinions from smart people, hear about the blind spots and still don’t do anything about them. And it’s that same exact behavior that happens over and over and over is the reason that I see them not succeeding. And it’s tough because if you just can’t engage with it and admit and be okay, oh, this is a weakness, then it’s going to be something that comes up over and over and it’s going to be detrimental to your success. There was introspection. There were personality tests.  

And the third one asking folks around you, and I think, look, this can be co-founder can be folks in a mastermind, can be again, spouse, siblings, anyone who’s close to you, who has watched you work and watched how you succeed and why you succeed and has watched you fail and has seen why that has happened. All of these are data points. There’s probably no one individual that knows all of your weaknesses, including you at this point, but you gather the data and you take it for what it’s worth. And start to think, when I look at who I want to be, do I want to be a successful entrepreneur, will look at other successful entrepreneurs, folks who come on this show. Folks I mentioned on this show, you’re Jason Cohen’s, your Heat, and Shaws, Ben Chestnut, Dharma Shaw. A lot of folks who I’ll say are successful and they’re on podcasts where they speak up MicroConf, you can start to see how they operate and you can get a sense of their thinking when they’re interviewed or if they write stuff or do talks and to ask yourself, can I operate like that?  

Am I operating at that level? And if not, why? And it’s not to copy. I’m not trying to copy anyone or put them on a pedestal. No one is perfect. We all have strengths, we all have weaknesses, but there are always folks that are ahead of you. I know there are many folks ahead of me and they have helped me over the years reflect on myself and say, why have I not achieved what a Jason Cohen Heat and Shaw Dharmesh, I can name all the names again, but why am I not as successful as them? And maybe it’s just choices I made. Maybe it’s I focused more on my family, maybe just my starting point. We say whatever. There could be a bunch of reasons or it may be, huh, because they overcame their weaknesses. And it took me a while. It took me a long time, I think, to turn some of my blind spots into things that I was aware of.  

So hope you enjoyed those thoughts today on weaknesses versus blind spots. The next topic is the idea that everyone struggles. And this actually came from a conversation I was having with Ruben Gomez, founder Sewell, he’s been on the podcast many times. He told me that someone else told him, they said, you are so successful. It makes me feel better that you have trouble at times, that sometimes you struggle with things. And I thought to myself, well, of course I’ve talked to Ruben almost monthly basis for 14 years or something, so I know his struggles because we talk about them. But it’s so interesting on the internet how things might not come across that way. And Ruben of all people is not someone who is humble, bragging and only talks about the good. I mean, he’ll talk about all the stuff, but it isn’t always apparent just how much struggle each of us is going through.  

And frankly, I’m just going to Mia Culpa here, how many mistakes each of us makes even once we kind of know what we’re doing. The level of mistakes that I’ve made in the past 10 years is pretty incredible. So why have I achieved, I would say each year I’ve been more successful than the last. I’ve had more wins than last. I’m happier now. I make more money. Whatever measure I’ve built, more successful companies, I struggle less. I am less stressed. So by all measures, I would say my life has gone up into the right, and yet I’ve done a lot of things that haven’t worked, and I guess this is maybe more of a personal episode than I’ve done in a while, but I wanted to walk through a few of those failure, you know how they failures. I don’t even want to label. They’re just things that I did that basically kind of didn’t work long term.  

They were decisions that I made that were a lot harder than I thought or just didn’t turn out the way that I thought. One of them, man, going back to 2013, so this is 11 years. When we launched Trip, I had some hubris about the fact that it was going to work, that I knew what I was doing, that I’m a successful entrepreneur. It was my fifth company. Yeah, MicroConf was fourth. TinySeed six. Anyways, it’s my fifth company. And I was like, you know what? I know what I’m doing. I have a bit of money in the bank. I have some experience. I have a good network, I have an audience. I’m a product person. I’ve done this before. It’s just going to work. And then we launched and it didn’t work, and it plateaued at eight. You’ve heard the story plateaued at eight grand a month for months on end.  

And I was just distraught and I had a moment where I was like, I’m supposed to be good at this. People listen to me about being an entrepreneur. Don’t I know how to do this? I thought I knew what I was doing. And it turns out I figured it out. It was grinding, it was working with Derek to figure out the next thing to launch and how to pivot the product. And we did. And it took us, I dunno, maybe nine months from launch, nine agonizing months from launch to get to the point where we had product-market fit, and then things took off like a rocket, and then it was like, okay, I do know what I’m doing. I was just overconfident that it would work right away. If you want to hear all that agony, by the way, go to Startup Stories podcast. You can look in any podcast app or you can go to startup stories podcast.com.  

Derek and I recorded 10 to 15 minutes a week for a year, and then I cut it all to actually not all of it together. I think it was nine hours of audio and I cut it down to 90 minutes and kind of just packed it all in. So you can hear this longitudinal agonizing trip towards product-market fit as we finally did get there. But in the middle, I have a little bit of PTSD. When I listened to it, it was such a hard time of not even knowing what we were building and if we’re building anything for anyone and if it was all just a waste of time. So that was one, like I said, 10 or 11 years ago. How about MicroConf Locals? We launched local events. We are going to do, I’m trying to think of how many we did in our biggest year, but we have our two big flagship events where we have the one in us, the one in Europe.  

We’re going to be in Croatia here and just a week or two after this comes out. But then we wanted to do local events, which were like these First, we were going to do one day events where it’s like eight hours, four speakers and fly into some major cities, and we started doing those and the uptake was not great, and it was a lot of effort. And so we said, well, what if we just make ’em like three hours in the afternoon, almost like a happy hour? I would either do a short talk or I’d interview someone. So I would fly in with a producer and we would basically produce a three hour event. And they were fine. The events themselves were really good, and the people who came, it was awesome, but the local interest wasn’t there. We couldn’t charge enough even to make them break even.  

We were losing money on them, and it was burning me and the producer out because we were on the road all the time, and I went to, I don’t even know, it was 10 events, 12 events last year. It’s just way too much travel. And it wasn’t just the being there, it was getting on the plane. It would wreck 48 hours, 72 hours of stuff that I could be doing that’s not being on a plane, right? It’s recording podcasts, it’s recording videos, it’s writing another book. It’s all the opportunity cost of the travel and the time. And so that was an effort that we decided to, I’ll say put on pause, but it’s done. And so is it a mistake? Is it failure? Well, we certainly struggled, certainly had trouble at times. My whole team burned out last about a year ago, including me, and it was rough, but it was a calculated bet of if this works, it’s going to be great.  

We can do more. We can have local MCs. We had all these plans, but the interest wasn’t there, so I don’t regret it. It’s not a mistake. But we did struggle and we agonized. I agonized over whether to keep doing them. These are hard decisions. Strategic decisions are big and difficult, and it’s like how do you make hard decisions, right? This is a question. How do you know when to quit? How often do you hear this question asked of anyone? Right? It comes into this podcast. People ask Seth Godin all the time. He wrote that book, the Dip, but how do you know when to quit? It was because I knew when it was time, maybe I waited a little too long, but I was out of ideas and it wasn’t working, and I was like, I just want this to be done. And that’s how we knew when it was time to quit another effort.  

That certainly is not a failure. It was the YouTube channel, and the YouTube channel is still doing really well. It grew very quickly over about 18 months, I think we went from like 10,000 to maybe 80,000 subscribers, and then it plateaued. The worldwide audience of entrepreneurs who want to build SaaS companies isn’t that big. Maybe, I don’t dunno, a hundred, 150,000. It’s not millions of people. So to plateau at 80 ish is not the end of the world. But the question was, so do we keep doing this? We were shipping a video a week. It was an absolute grind, and the grind was worth it When it was successful, the grind was worth it when we were adding a thousand to 1500 subscribers every week. Love it. You see that number going up into the right. I can grind for a very long time when that’s happening, but when it starts being three or 400 a week, I have to ask myself, is this worth my time to outline record the cost to edit producer Ron’s time, just all the effort we’re putting behind this?  

Or what if we did less? What if we didn’t do any YouTube videos? What if we did half as many, so it’s every other week we could put that time, that energy, and frankly, those dollars into some other way to build the audience. And so again, not a mistake, but it is a struggle and a hard decision. It was challenging. I think it was six, seven months ago when I finally said, man, we’ve been plateaued for six months. I think we just have to turn this attention to something else. And frankly, we turned that towards the course. SaaS launchpad.co. You haven’t checked it out. It’s all about finding ideas, validating, building a launch list and launching. It’s really the second course I’ve ever built. First one was 14 years ago. This one is way, way better, more complete, more thorough. The course is $500 and it’s worth it.  

I mean, I’ll just say that it’s the best course, certainly best course I’ve ever produced and one of the best pieces of content I’ve ever produced. It’s almost 10 hours of content. It’s really in depth. And if you want to learn more about launching your own SaaS SaaS launchpad.co, so hopefully that segment makes you feel better if you weren’t aware that even successful people struggle at times. Alright, last topic. This one’s a quicker one. I was watching a video, I believe it was Roger Federer, who is an incredibly successful tennis player. I believe he was giving a graduation speech. He said, I’ve played in 1,526 singles matches. I won 80% of those matches, but I only won 54% of the points. So let that sink in, barely more than half of the points and yet won 80% of the matches. I love this metaphor as you don’t have to be right that often.  

I won’t belabor this metaphor and start talking about baseball and how the all time grades only hit the ball, what 30, 40% of the time you get. The point is that successful founders aren’t right all the time. They aren’t right a hundred percent of the time. They’re not even right. 90% of the time. They might, I mean, I don’t know what the number is, but is it 60? It might be be as low as 60, but they try enough things, they move fast enough and enough of their things work. I was talking about this point, and Ruben actually pointed out to me that when I say enough of the things that they try work, he said, you know what you should include there is that they usually don’t work right off the bat that they do work if you iterate on it and focus on it.  

And I really liked that distinction. When I say they work on a lot of things and most of the things they do work is most 55, 60, 65, 70, it’s in there somewhere. Seriously, it’s not 80 or 90%. 80 or 90% of the things I do don’t work. But the ones that do have asymmetric upside and they push the business forward and they push my life forward and they work, and that’s the pattern that I see with successful entrepreneurs and frankly, someone who’s successful at all with their life. They just generally learn to make good decisions and follow through. But I want to underscore that point of for it to work for you to be successful on 54% of those points as Roger Federer, that usually won’t just happen right off the bat. It’s not like I’m going to start this marketing approach. Yeah, it’s just going to work. I’m going to launch this product. Oh, it just worked right off the bat because successful folks, 54% of the time are right. That’s not how it works. You launch something, you iterate, you take feedback. You try that marketing approach, you iterate, you take feedback, and eventually you kind of grind it to the point where it works. Usually 55, 60, 60 5% of the time. That’s going to be it for me today. Thank you so much for listening this week and every week. This is Rob Walling signing off from episode 733.

Rob Walling:
You’re traveling through another dimension, a dimension not only of sight and sound, but of mind, a journey into a wondrous land whose boundaries are that of imagination. That’s a signpost ahead. Your next stop startups For, the Rest Of Us. Welcome to this week’s episode. I am Rob Walling and you might recognize that intro from the amazing and talented Rod Sterling who created and wrote so many episodes of one of my favorite series, the Twilight Zone, but this is not the Twilight Zone. This is Startups For, the Rest, Of Us, where every week since 2010, I’ve shipped an episode focused on helping bootstrapped and mostly bootstrap startup founders. We’re founders who seek freedom, purpose and relationships, and we don’t want to sacrifice our life in order to build our startup, but we want our startup to change our life for the better. Today’s conversation is pretty incredible. 

It’s a founder who effectively bootstrapped. He uses the word bootstrap because they raised a couple hundred thousand dollars and if you’re in venture capital land that is bootstrapped, usually it’s anything less than a million is considered. Bootstrap built his company with a co-founder for 15 years and had three subsequent exits to private equity where he sold a portion of his equity in each one. The last exit was for $615 million. It’s an incredible story and my guest today is extremely knowledgeable and extremely accomplished. Before we dive into my conversation, the SaaS Launchpad is live. It is the best course I have ever created. It is the most comprehensive. There are reviews coming in already of people who are blown away by the depth and the quality and the quantity of the content. It’s at SaaS launchpad.co if you’re interested. And as of the day this episode goes live, if you buy the course in the next six days before September 30th, you’re going to be able to get on a live q and a call with me where we’re going to do a group call, talk about questions people have from the course or probably about anything else. 

To be honest, SaaS launchpad.co. I’m so confident in this course we have a 30 day no questions asked money back guarantee, so really there is no risk for you to check it out. That’s SaaS launchpad.co. And with that, let’s dive into my conversation. 

Jeff, thanks so much for joining me on Startups For, the Rest, Of Us. Hey Rob, thanks for having me. Yeah, so as background for folks, you are at retired founder on Twitter, and your story is pretty incredible. Your, I’ll call it your personal H one, which is your Twitter bio says, retired SaaS founder sold the business for more than $600 million Seeking purpose and community post exit. You bootstrapped a company and sold it for a crazy amount of money. So why hasn’t everyone heard of you? Why is it in your name across the marquee, there’s people with huge YouTube followings that have done a fraction of what you’ve done, what’s going on  

Jeff:
There? I guess the obvious answer would be, I must not be that interesting, but perhaps beneath that is I like to keep a low profile just for my own safety and security, and by being anonymous, it also helps me be completely authentic with anything I have to talk about.  

Rob Walling:
And then we’ll dig into that today you’re willing to talk numbers and all the stuff you were telling me in the pre-interview, I was like, whoa, okay, that’s great. And so that is, you’re anonymous, but I have vetted that you in fact have done these things. And so folks listening as the first anonymous guest, it’s kind of neat to have someone who has had such an incredible journey. I want to start by taking us to the end, so to speak, the exit and you can explain how it’s actually exits, but what I really want to go to is that moment that you refresh that bank balance and you realize I never have to work again. I’m all set. What was that emotion? What was that feeling?  

Jeff:
Oh man, the first word that comes to mind is relief. And following that probably enthusiasm. As a bootstrap founder, it’s very difficult to take a lot of risk. So when we sold the business the first time to a private equity firm, and if anyone wants to contact me on Twitter or wherever, I’d be glad to share details about who our banker was, who the private equity firms were, but I’m going to keep those anonymous as well for now. But I was excited to work with people and actually be able to put money into the business and pursue some of the crazy ideas that I had as a founder. But when you’ve got 98% of your net worth wrapped up in your business, it’s really challenging to say, Hey, you know what? This is a crazy idea and I think it’s a five x payoff. If it works, it’s hard to pursue those things. 

But the first thing was relief. Man, I listened to your latest podcast and your guest talked about sleeping for 14 hours. If anyone gets to retirement, I dunno if this is good news or bad news, but the best thing is the sleep. It’s just so great to sleep. It’s so peaceful. Oh, it’s so peaceful. I went a dozen or more years where I was asleep, I was unconscious, but I was still at work. My dreams were all involving work and to be able to actually get to sleep is great. So that was the first thing,  

Rob Walling:
The biggest perk. Yeah, and to give folks an idea of the timeline real quick, we’ll talk through this in more detail, but you co-founded the business in 2003. You sold a majority share of it to private equity in 2017, so 14 years. But then you got a what they call a second bite at the apple and a third bite at the apple, meaning you rolled equity and you had another exit in 2020 and then you had a final exit in 2022. That’s the $615 million exit and it was 14 times a r. So that’s an interesting thing. Let’s talk about that real quick because people ask all the time, if I’m doing 2 million and growing at blah, what’s my revenue multiple? And it’s always like, it just depends. I can do a bell curve of the past 20 exits that I know of. I can give you the range, but I know a friend of mine who is a m and a advisor and he got someone a 23 XARR offer and then I heard someone three days ago who got a two XARR. So is that the range? It’s two to 23, it just depends, right? It depends on the space and the market and the growth and the this and that. There are the most common parts of the bell curve for SaaS 10 to be in that, what is it four to? It’s about five to seven, but you see five to eight and it depends on the market. So 14 is a great, great multiple. Why was that the case?  

Jeff:
It was a combination of things. I mean the market was very strong at that moment in time in early 2022, so that can’t be disregarded, but the mental model I used when describing this to people considering selling their business is a slot machine, and I didn’t know this going in or I would’ve had some better numbers, but just excluding market conditions. You take your revenue is sort of the first real of a four real slot machine and then you take your gross margin. I’d never really calculated our gross margin. I mean I knew how the business worked, but I’d never really dug into what our gross margins were. We were about 90% gross margin. It was a mature product. It was all our own code and open source. We didn’t have any licensing costs. We had high gross margin. That’s real. Number two. Third is retention. I knew we took really good care of our customers. It was one of the reasons we had I think such a good outcome and took so long was our patients, but we took really good care of our customers. We had 117% net retention, so it was  

Rob Walling:
Negative 17% churn.  

Jeff:
Yeah, negative 17% churn.  

Rob Walling:
That’s unbelievable  

Jeff:
And happy to talk about some of the strategies that helped that. My favorite of which is short-term generous, long-term, greedy, which I’m glad to talk about later, but the fourth reel is growth, and at the time we sold the first time we got seven times revenue, so seven not nearly as good as 14 obviously. But if you think about that slot machine, our growth was only about 20, 22% a year when we sold. So if we would’ve had a hundred percent growth and 90% gross margin and 117%, that would’ve been a jackpot. But we were kind of like jackpot, jackpot potato for that last reel on growth, but perhaps the private equity company that acquired the majority stakes saw that we had. We had a lot of potential because we weren’t aggressively spending in sales and marketing at that time.  

Rob Walling:
And let’s give folks an idea of what the business was. We’re not going to name the business because very quickly someone could find your identity, but it was a bootstrapped SaaS company. And what industry did you operate in?  

Jeff:
Yeah, we were business to business security software and if anyone wants to find me, I’m not hiding, send me a message online or on Twitter or something and just like with you, glad to introduce myself, but it was business to business SaaS.  

Rob Walling:
Got it. And starting in oh three, there really wasn’t, I put in quotes, there wasn’t SaaS, constant contact was around and MailChimp was just, and Basecamp was a couple years later, but were you charging a subscription when you launched it in oh three or was it one time back then and then you migrated to subscription later?  

Jeff:
It was an abject failure to get licenses is the honest answer. That’s amazing. I’m a salesman by trade, so of course we were trying to get a hundred grand for the software and then the way it used to work is you’d pick 15, 20% maintenance ongoing, but we weren’t able to do that. We were two guys in a dog and the dog was a loner and nobody wanted to give us the money. It was really Salesforce that I recall as being one of the real earliest pay as you go, the difference in our case, we adopted the pricing model of a subscription, which I think was very healthy for customers and for the tech companies, but we were still OnPrem, so we were shipping servers, still probably shipping on-prem servers to customers, but it was really the licensing that was rather novel at that time in 2003, and again, driven out of necessity, not some kind of foresight or wisdom.  

Rob Walling:
Ben Chestnut, co-founder, MailChimp, I interviewed him at MicroConf, he basically said the same thing. He was like, we were just charging one time because that’s what we thought software was and then suddenly we realized we need, I don’t remember why they switched to subscriptions, but it was very much an accident for them as well. So talk to me, you told me offline that you started in oh three, you became profitable in oh seven, so four years of what I would call grinding. Were you working a day job at the same time? How can you be an unprofitable, bootstrapped company? Those two things, you don’t have burn rate because you don’t have cash in the bank.  

Jeff:
Yeah, I was not working another job. I was unemployable at the time for clarity as well. We did raise $350,000 of an angel round, so mostly bootstrapped  

Rob Walling:
Is how I should call  

Jeff:
It. And that was the last capital. That was the last capital then. And I had a previous company that I sold in a.com company that let’s not venture into waste time in the interview here, but I had a little bit of money left over from that after failing at a couple of things in between. So we were burning money at home for a long time. It was a tough first five years.  

Rob Walling:
So mostly bootstrapped is obviously what I refer to that as. So as you hit profitability in oh seven, what did the company look like? Was it still small? Was it you and your co-founder? Did you have much of a team?  

Jeff:
Yeah, it was a first year. We did a million dollars of revenue was 2007, I think we were at about seven employees then, so it was just the two of us for a year. We did $9,920 of revenue our first year in 2003. Yes, I remember. And I have a copy of the purchase order I could put my hands on right now.  

Rob Walling:
That’s cool.  

Jeff:
That was a big day. Yeah, a million dollars of recurring revenue  

Rob Walling:
In the journey between oh three and 18, which 15 years. That’s when you retired. You did the first part of your exit, partial exit in 17, then you retired in 18, and then you had these other exits afterwards because you just owned shares. Right. What I want to find out is do you have a memory of I guess one of the hardest time periods or one of the hardest moments, a time where you kind of said, well, this might be it, this isn’t going to work. Or maybe it was months of stress fighting spammer. There’s always, every entrepreneur has many of these stories, but you have any go-to story of like, this was terrible.  

Jeff:
Yeah, I’ll give you one early and I’ll give you one late. The one early is sort of a combination of stories, but I remember a year in two years in something like that, I mean we are doing almost no revenue and it’s just not working. And I think we were a little bit early for the market we were in and it’s security software, so it’s difficult to get a beach head and just thinking, man, if I had any other opportunity, I mean any opportunity like three grand a month and a dental plan and just like relief from the pain I’m going through, I would’ve jumped on it. And I remember a particular moment where I was fighting with the printer or something like that and I was just really angry and frustrated and I think that’s one of the things, I mean I hope your audience takes from me and from each other is that it’s hard, man. 

It’s hard and it’s lonely and having somebody to talk to authentically where you’re not in pitch mode and talking about how great it is and feeling like everybody else is doing great and you’re not, but it’s really hard. It was hard and it was lonely. The second one I’d give you was late in the process and was a contributor to deciding to sell the business, and this was 2015, I believe, where we were doing well and I had taken a loan, I built an office building for the company and I took a loan of $6 million with a personal guarantee. I didn’t have that kind of money, but the company had cashflow at that point to support that, and we had a security breach. Nothing was lost, but someone got through the first level of our security. It wasn’t our software as a piece of open source code. 

I don’t remember what it was, but we were stuck and one of our customers said, Hey, we’ve got a red light on the dashboard here. Somebody broke through the front line of security here and they’re checking the doors to the vault. Then another customer, same thing. So we were under attack at that moment in time and I just signed a loan for $6 million to build this and in security software, one bad line of code could ruin you, wasn’t our code, couldn’t fix it. Totally out of our hands, and that’s a moment, I won’t forget, that’s a moment that all the ships were down and we didn’t really have any ability to play the hand. It just, our team came together and when fix was available, we fixed it. But that’s one that I won’t forget.  

Rob Walling:
Yeah, that sounds terrifying and that the longer you do this, I’ve seen so many founders now get hacked, get cease and desist. I have employees embezzle have, it’s just these edge case things you hear about, you’re like, well, that’s such an, that’ll never happen, but it’s like, no, it’s either I have view across 191 companies, so that’s a law of large numbers. It’s going to happen to some of ’em. Or you had your one company but you did it for 15 years and so the odds of something happening in that timeframe is, and it’s terrifying. How did you handle it in the moment? Some people completely freeze up and don’t know what to do and panic and that’s there’s fight, flight or freeze I think are the reactions. Do you remember panicking and then calming down and saying, well, we just got to fix this or what was your MO there?  

Jeff:
Yeah, I got plenty of weaknesses, but panic is not one of ’em. Equanimity I think is one of my strong suits, but this was a case. I’m a salesman by trade, so I didn’t have any ability to understand really what was going on and had to rely on the team. And I believe it was a Friday night and we just got to the point where there wasn’t anything else we could do. I think we approached it rationally and then you talk about the events that just sort of happen to you. There’s just a big wheel in the sky that spins and sometimes your number comes up and that happens. That could be getting a disease or getting in a car wreck or in this case having a piece of software that you were using that had a vulnerability. And fortunately we were able to work through it. Fortunately, the other safeguards that were present in our software held strong. I dunno if it’s interesting, but a lot of security software you could say is like it’s an alarm or it’s a fence or a moat or a gate or something. We were a vault. We protected the vault of some very important customer information, casinos, law firms, banks, hospitals, things like that. So it was not a system that could fail without massive repercussions for everyone. So anyway, glad to have that behind.  

Rob Walling:
This is going to be a tricky question or maybe you’ve already thought about this, but why did the business work? Why did it work so well that it was obviously a massive success for you and your co-founder and even the private equity firms that bought it and resold it. What is at that core, feel free to talk about you and your co-founder that you executed Well, I think the founders themselves have to be pretty instrumental in any business like this working, but people say, well, it’s the market or the idea was the right time. We got a little lucky with timing. We got whatever. How do you think about why this business works so well?  

Jeff:
Yeah, a combination of things. It’s always a great question in a group to say, Hey, what percentage was success and what percent was luck? And it was definitely a combination. I think of it like winning a poker tournament. Sure it’s possible to not even know what you’re doing and just go in 20 times in a row and win. I think one, it was a good idea. It was my co-founder’s idea. It was ahead of its time, but it was a good idea and we caught a wave five years in, 10 years in that picked up steam. I would say we had a good division of labor in the startup where my co-founder was a brilliant coder. He was technical, I was sales, so if it had to do with code, it was him. If it had to do with the business, it was me and we stayed out of each other’s way, which was good. 

We didn’t go too far too fast. If I would’ve had an ability to raise venture capital early, I probably would’ve done it and that probably would’ve been a mistake. So again, we took the long view on things, short-term generous, long-term, greedy, anything we could do to get the product in the customer’s hands and using it, we know we would succeed in the long run. We deferred gratification, so we didn’t have a big fancy office. We had a crummy office for a long time while we were profitable. We didn’t get hit by a lightning bolt out of the sky is definitely one.  

Rob Walling:
So we just didn’t get killed in the stayed  

Jeff:
Alive, cease and desist letter sued by a customer, a breach, sued by, we never got sued, which is nice. So really a combination of things. Rob, over the long period of time, I mean I don’t want to shoo away any credit. I think we made more good decisions than bad decisions. I think we recovered quickly from our bad decisions. We weren’t afraid to take certain risks that had favorable payoff conditions and we weren’t in a rush. We went, I call it bootstrap. We had a small amount of money from outside investors that got us over the line.  

Rob Walling:
Yeah, that’s a big thing. I mean, there’s so many directions I want to take that I’ve talked a lot lately about how, or be it lately, about how I think success of when I look at TinySeed companies, are the founders multiplied by the market or the opportunity? And the reason it’s multiplied is let’s say you have a founder who’s a one out of 10. If we’re just going to have a numerical rating scale, but it’s a great market opportunity, they will execute mediocre and they may have a middling a success, but if you have a founder who’s a nine and they have a real market or it’s a market that they don’t get a little bit lucky with or they don’t hit at the right time or whatever, then it’s similar, it’s middling. And we see a few tiny sea founders just like you are such a good founder and I’m so sorry that you’re just not getting the traction. 

This sucks. But it sounds like between you and your co-founder, that division of labor, and it sounds like both of you really executed well and then you have that market and that multiple, you multiply the nine by nine or the 10 by 10, suddenly you’re at a hundred versus these are all contrived, but you get the idea what I’m saying. And there are more factors in that, right? I mean there’s luck involved and there’s all kinds of stuff, but it’s crazy to see such an outsized outcome. There just aren’t that many nine figure bootstrapped exits like this. So I want to touch on something you’ve said a couple times now and it’s short-term generous, long-term, greedy. Can you flesh that out? What you mean by that?  

Jeff:
I think this is one of the benefits of being a bootstrap company. We didn’t have a quarterly number that we needed to make, and that means you don’t ever sell the product to someone who’s not a good fit. You sure try not to. There could be an occasion where there’s a prospect and they really should buy your competitor’s product, but you need the money or you need to make your number for the quarter. And we never did that. And then there were occasions where maybe the person we were dealing with had a very low budget authority, including our first sale of $9,920 in December of 2003. And you think, well, geez, this is a customer that should be a hundred thousand dollars a year customer, $50,000 a year customer, and the person you’re dealing with is enthusiastic about it, but they can’t convince their management or they don’t have the budget. 

And we’d say, what do you got? Can you sign for 5,000? And we would do that. We would do that consistently. The way our licensing worked as well was the product did not have a feature that would exclude someone from using the product because they’d exceeded a license account. So we sold on concurrent licenses. There’s a number of ways to do it, and it was also a generous way to do it was concurrent versus named users, which people liked. And then if we thought, Hey, you’re going to need, let’s say 50 concurrent users and that’s whatever it is, 10 grand a month, we would say, I’ll tell you what, first year we’re going to charge you for five and take advantage of us. I mean, just rip us in half, get up to, I hope you get up to 75, catch up with you next year, and if that’s a problem, we will work with you from there. 

So you go from, you could be sitting around forever trying to get that 50 concurrent license thing, but I’ll sell it to you for cheap for five because I know you’re going to like the product. I know we’re going to take care of you. I would say also we had a methodology or a viewpoint that we never tried to avoid our customers. We had a phone number that spelled the company’s name and you could call that number and one of our people would pick up the phone and help you through a problem. And that the idea was always, let’s try to give great support where no matter what, even if you forgot your password, we’re not going to farm you out to someone else. We’re not going to send you through an IVR. We’re going to try to get a human to pick up the phone and then after we surprise and delight you with some great service, we’re going to take an opportunity to say, Hey, by the way, is there anyone else in the company maybe that could use the product? Or are there other things we could do better than once you’ve done a good job serving them? So that’s just another example of being generous and greedy at the same time.  

Rob Walling:
Yeah, I like that. It’s really long-term thinking, and I like the way you say long-term, greedy. It’s intriguing to be thinking that way because so many folks don’t think about running a company for 15 years. Right, myself included, although I have run MicroComp now for 15 years, I think 14, as you were going along, did it feel like 15 years or was it just something that you kind of didn’t question and you just did every day? Similar to I talk about why this podcast has shipped every week since 2010. People say, wow, that’s a long time. It doesn’t feel, I mean when I look back, it’s a long time, but this isn’t work for me. I do this, I love it. And frankly, MicroConf is just something, it’s just part of me and it’s what I do. My last SaaS company Drip was, it was not an identity, and I never thought I’d run that business for 15 years. So I’m just trying to give examples of some of those really fit of, I’m just going to do it and it did what it did and others, I keep going. So I’m curious to what your feelings were during that 15 years of working on it.  

Jeff:
Yeah, it’s a great question. I’d say time moved at different speeds in different parts of our history. So the first couple of years crawling over broken glass, it was like time in the dentist chair. It couldn’t have gone slower. The first few years felt like a hundred years once we got to profitable and had a pretty good sense that we were going to be okay, that part went fast. So from 2007 till the time we sold a majority share, that 10 years might’ve felt like two. Although there were some struggles of course along the way. I don’t mean to think it was all sunshine and roses during that 10 years, but that time was really good. We had a small team. It was a good team. We worked well together. It was small enough where you knew everybody. It was big enough that you could take a vacation and expect that the company would still be alive when you returned.  

Rob Walling:
I want to ask you a question that I think some people are probably thinking right now, which is with an exit like this, you yourself took home a tremendous amount of money. Is it just shy of a hundred million? Is that accurate?  

Jeff:
Yeah, the total, I’m happy to walk through the transactions if it’s useful, but yeah, I think that the total was about $88 million  

Rob Walling:
That went to you directly.  

Jeff:
That went to me from the equity sale in three chunks.  

Rob Walling:
How do you keep going? What do you do next? That money, I know it came in three chunks, but how do you think about how to stay busy? If I had that much money, I wouldn’t go back and grind, right? I mean, hell, I have way less money than that. I’m not going to go back and grind. You know what I mean? So it’s like how do you possibly think about what to do next to keep yourself happy, to have an impact, to keep learning, to stay sharp without maybe getting back in the game? Unless, did you ever consider getting back in the game?  

Jeff:
Yeah, boy Rob, I could go hours on this. I’ll try to distill it as best I can. Everyone has a number in mind. If I could get this amount of money, then I’d be set and I’d be done. Mine was 10 million. And I think most people, when you say, my number’s 10, you really think of 20. So that was life changing. I was done there. And then first check was 21, second check was about 43rd check was 27, 28. And I remember in vivid detail the day we sold cash in the check, taking my family out to dinner in a limousine, what we had to eat, I could bring you to the table where I sat. Second time we sold Rob $40 million. It closed early in the morning. I was in a conference room by myself. I don’t remember what I did that day. I mean, we might’ve gotten pizza that night. 

Honest to God, I don’t even remember, and I’m not sure how useful this is to your audience, but I mentioned this on another podcast I was on. I think most people have a default perfect amount of spending, meaning maybe you can afford to fly first class and stay in a nicer hotel and I dunno, have a decent car. Whatever it is, everyone has their sort of ideal amount of spend. And when you have less than that, life is of course painful because wanting to rise up to that. There’s also another side, and I can already feel the eyes rolling in the audience that my eyes would’ve been rolling as well, that when you’re above that, if you have more money than you can spend, it creates a certain kind of an issue as well. And just some examples of that are feeling the need to maybe go do it again or give it away, and it’s just more challenging than you’d think. 

I made a lot of the mistakes that I think people who sold their business make you do what the world tells you you should do. You go to try to work with nonprofits and you realize how frustrating and slow that is. If you’re a founder. I bought a bunch of stuff. I had four houses in a jet at one point and realized stuff isn’t where it’s at. Experience and community and relationships are much more valuable than that. And I also grossly underestimated how much I would miss the structure and the purpose and the identity that I had in my former life. And I know I’ve been talking a long time, I can hear myself talking, but I just want to say to the audience, if you’re rolling your eyes right now or you’re saying, what a moron, just believe me when I say when I was starting, I would’ve said the same thing. How is it possible you have this giant pile of money and you don’t just write off it at the sunset and spend the rest of your days with frozen drinks and sunsets and boats?  

Rob Walling:
Well, it’s boring. I did it for six months, and again, my exit was much smaller than yours, but took six months off after and I was like, I was in my early forties. This is not what I’m doing forever. I need to learn, me personally, I need to learn. I need to have an impact. I need to do all that. The thing I struggled with was my whole life growing up, we didn’t have much money, so it was always a constraint. I had a very scarce mindset around money, and a big part of me for entrepreneurship was like, I want to have the freedom to work on interesting things that I want to, but I also want to be set for life at some point. That was a goal. And so I achieved that goal and then I was like, whoa, I’m like 40 years. 

That’s been the driving goal for me. My North Star was to have enough money in the bank in cash that I never had to work again. And then I was like, so what do I do now? And I had MicroConf this podcast, I had stuff that I could work on and do, but I needed a new North star. And my new North Star became to multiply the world’s population of independent self-sustaining startups that is now truly my North star. Everything I do with books, the podcast, YouTube, MicroConf, TinySeed, that’s what I do because it brings me joy and it is, I view it now as my legacy. Did you have a similar transition where you were like, my north star is growing the company or wealth or whatever, and then you had to take, I mean, it took me six plus months to figure mine out of thinking about it a lot. I was actually kind of stressed about it, but did you reorient around something new?  

Jeff:
Oh gosh, bie, congratulations. By the way, you have accomplished something. A lot of people in my situation or similar have not six months is a, you’re much smarter than me and a lot of others that I’ve worked, and I stood up a group called Beyond the Finish Line. It’s b tfl.org if anyone is in the same situation. But I can distill a lot of the conversation is this, I want you to picture a Venn diagram, two circles. One of them is doing something important with people and trust. It’s being back in the trenches. It’s going to war with your friends and being an important part and being useful in that. Okay, that’s one circle. And the other one is absolute freedom and autonomy and independence to do whatever you want anytime you want. And as it turns out, the joke is it’s not a Venn diagram. There’s two circles. 

There’s no overlap. That’s great. And so the key I believe, is to find something as you did, and I have friends that are in the group that have found something that is worthy of sacrifice of that second circle. So if there’s something that you feel passionate about or you feel like you’re giving back enough, you’re useful enough, you’re willing to say, I’m a skier. So I’m willing to say, you know what? We’ve got perfect ski conditions today. I got six inches of powder. It’s blue skies. The lines are short, it’s 20 degrees and the light’s good. And I have to say, I can’t do it. I can’t go out. I can’t go ski today. So it has to be something that’s worthy of sacrificing your independence. So kudos to you for finding that. And the North Star I use now, or I try to use now is energy. 

So if I’ve got something like I’m enjoying talking to you, I was looking forward to talking with you today. If it’s giving me energy, it’s good. And it doesn’t matter how much money you have in the bank, Robin, anyone else listening, it doesn’t matter how much money you have in the bank, if you’ve got low energy, life sucks. It doesn’t matter that you can push a button on your phone and have a plane come pick you up somewhere. If you’re not at looking forward to the day and you’re not looking forward to what you’re doing, your energy’s low. Life sucks. And if your energy’s high, it, maybe I’m working on a home repair project or something, if my energy’s good, life is good. So that’s the new scoreboard because it’s not money anymore.  

Rob Walling:
And that is a big mental shift that I think some people make and some people don’t. And so I want to wrap the interview and give folks a few calls to action. You have several different things that you’re working on. You already mentioned beyond the finish line, which is btl.org, and as you said, if someone is post economic, they can hit up there. In addition, you are at retired founder on Twitter and retired founder.com, and I wanted to read not your H one. Your H one is Hello fellow founder, and you talk about your exit, but the second paragraph down is this is not a pitch for anything. I have nothing to sell you. I have enough money, so I love that I have enough money, so I promise this is not an intro to my coaching service, paid subscription or anything else. My only goal is to help founders. And so you have a contact page there if folks want to reach out, and what do you want them to reach out about? What typically do people want advice from you about?  

Jeff:
Yeah, so let me start with the negative response on that, which is the real generic ones I can’t help with. What kind of business should I start those? I try to write, and I’ll need to spruce up my website before this publishes, but I’ll try to write a very basic applies to everyone, answer to a very basic, applies to everyone, question the ones that are useful or people that have a particular situation or problem that I can help with. If someone does business to consumer or they’re trying to open up a market in Asia or something, I can’t help, but I’ve had, I dunno how many calls and this brings me energy, so I’m so happy to do it, which is why I don’t need money. I don’t have a coaching service, I don’t have anything else. It just gives me energy. I’ve been, I think, an authentic ear for the people who are going through it. 

And that’s where I think I can provide some good in the world from people who can’t make payroll, from people who are thinking about a big partnership, thinking about selling. Their spouse is telling them to get a real job. I talked to a guy whose co-founder committed suicide in their apartment. I’ve talked to people who are in the process of making mistakes that I’ve made. And I think it’s really a relief for a founder to be able to talk to someone who’s been through it and can say, yeah, me too. You’re not alone and it’s going to be okay while not having to secretly pitch me for an investment. I make no investments. No investments in anything. That’s the trade. I’ll not write a check, but I’ll not ask you. I don’t want any shares, warrants, options, nothing. I want nothing.  

Rob Walling:
And they don’t need to pay you. You don’t charge per hour. You don’t have a product. Yeah, very cool. All right, so that’s retired founder.com if folks want to reach out. In addition, you mentioned to me that you are interested in doing more podcast YouTube videos. So if someone’s listening to this and they feel like Jeff might be a good guest on their show, you can obviously ask him. He’s very open about a lot of stuff. He could dig more into the transaction. There’s a lot more that we could talk about, but due to time we won’t. So feel free to contact Jeff, either DM on Twitter or head to retired founder.com. Jeff, thanks so much for joining me on the show.  

Jeff:
Thanks for having me, Rob. I really appreciate and enjoy your work. Nice to be in touch with you.  

Rob Walling:
Thanks so much to Jeff for joining me on this week’s episode of Startups For, the Rest, Of Us. And if you think Jeff’s story was interesting and that he’s knowledgeable, after our conversation on this episode, I asked him if he would be a TinySeed mentor and he accepted. So this is how we’ve built at TinySeed. What I believe is the best mentor network in the world for B2B SaaS companies is finding people who are not the headline name, who have had their name splashed all over everything that we all know. It’s people who have been grinding in the trenches and built an incredible knowledge base and experience, put in the hard work, learned the skills, maybe got a little lucky, maybe it doesn’t matter. It doesn’t matter how lucky you get if you sell for that amount of money. I really appreciated Jeff’s transparency and him sharing his knowledge. And as I said, he’s now a TinySeed mentor. So that gives you an idea of the types of quality and experience that we’re looking for in that role. Thank you for listening to this episode and every episode. This is Rob Walling signing off from episode 732.