Episodes

Rob Walling:
You’re listening to Startups For, the Rest, Of Us. My name is Rob Walling and I am your host this week and every week on the show today, I welcome back Derek Reimer and we talk through some really interesting listener questions, how to delegate as a perfectionist, how to organize and think about SaaS partnerships and planning your next quarter as a as super small team. We’ll jump into those questions in just a moment. If you haven’t checked out my new course, the SaaS launchpad, head to SaaS launchpad.co. This is the first course I have created in 14 years. It is incredibly in depth. It’s a video course with transcripts and worksheets and quizzes, and it’s all about early stage. It’s all about going from zero to one, going from finding ideas to vetting them, to getting them launched successfully. SaaS launchpad.co if you want to check it out. Now let’s dive in to listener questions. Derek Rimer, thanks for coming back on the show.  

Derrick Reimer:
Pleasure to be back.  

Rob Walling:
So I have some really good questions today. Continuing on this topic of more intermediate to advanced questions. The first one is from hello, it’s Ali on Twitter. Ali asks, we’re at $32,000. I’m going to assume that’s MRR and we’ve done it through long hours, endless experimentation and a lot of good luck, hard work, luck and skill. Sounds like. My question is, how should co-founders with perfectionist tendencies delegate work and what qualities should they look for when hiring? And then Ali actually goes on to ask two or three more questions, which we can take in due time. But as someone with perfectionist tendencies, we laugh because you and I are both that way in certain areas. So  

Derrick Reimer:
That’s the name of our band.  

Rob Walling:
That is my co-founders with perfectionist Tendencies. Tendencies, just perfectionist tendencies for short, what are we? Like a third wave ska band.  

Derrick Reimer:
Yeah, perfectionist.  

Rob Walling:
Yeah. No, I think that’s it. You can be the guy. You’re the guy just dancing on stage. I love to dance. Tuba, no drum, major drum major. You’re drum major drum  

Derrick Reimer:
Sax.  

Rob Walling:
Alright, and sacks. I forgot that everything’s in B flat people. We have to play it all in B flat. Okay, so back to Ollie’s insightful question, perfectionist tendencies, which I think a lot of founders, not all, but a good chunk of founders become founders because they really want control over things. They don’t like a day job because they’re ordered around and they work with people they don’t want to work with and they can’t hire and fire, but whatever. And I want to control because if I can control everything, it will be better. And oftentimes that’s true, but it doesn’t scale. You can’t run, I say Canton quotes, you can’t run a million dollar 2 million a or SaaS company with just you at some point you have to let some stuff go. So to that point, how do you think about hiring people to do that you’re a perfectionist about and what qualities do you look for?  

Derrick Reimer:
So I think there’s, as I was thinking this through, there’s kind of two buckets, two different kinds of delegation I think. So there’s the mindset or the task before you of I have some less skilled work that’s not worth spending my valuable founder time on and when I could be working on higher leverage things, so maybe bookkeeping or scraping some data to build a cold email list or even support, which is I think is something that a lot of founders hold on for way too long. So there’s kind of that bucket of things that’s like, okay, my time’s valuable and this stuff is potentially not worth my time. Then there’s the stuff that’s like the business needs certain expertise in order to keep moving forward. And though I want to hold onto this thing, actually I’m not the best person for the job. So then that’s delegating stuff that’s really not in your zone of genius. 

And a lot of times when you’re just starting out, depending on what your resources are, how much funding you may have or may not have, you just got to roll up your sleeves and do it. But I think that that ends up holding you back at a certain point if you’re just holding on too tightly onto something where it’s not actually in your zone of genius. So for that, it feels like an obvious answer, but it’s like, look for someone better than me at the job, someone who has that particular specialty. So I think about the initial branding for iCal. I did myself and it was fine. And then we came to the point of I feel like this is holding us back in certain ways with being able to really push our marketing forward. And I looked to someone who’s just this amazing kind of brand designer and has just a ton of skills on the aesthetic side of things where I just get a little bit limited. 

And it was so fun to work with someone who is actually an expertise in their field. So I feel like I don’t know this one, it takes a while to get to the place where you’re comfortable with it, but as soon as you embrace the fact that no, it really is a joy to work with people who are actually better at stuff than you and you get to be a collaborator with them, it’s not that you have to totally offload it and now you have no say ideally if you’re still the founder in the CEO driver seat or whatever, you are still collaborating on important things, but you’re not the bottleneck anymore on holding back that area of the business. Those are some initial rambling thoughts.  

Rob Walling:
I think it’s a key differentiator you’ve made between delegating things that you really shouldn’t be doing. I would include customer support in that. Now, in the early days, doing customer support is really helpful. As a founder you learn a ton as you transition. I believe I did email support with Drip for three months, four months, and then we brought Andy in to, he was doing part-time stuff, but he obviously is better at customer support than I am. And people say, well, I don’t want to lose touch with my customers. It’s like, yeah, Andy fed me all the feedback. Anything that was real feedback, we like, Ooh, this is coming up, you and I learned about it, you and I fixed it. So I would lump that in. But I like that differentiation of what starting to figure out what is your zone of genius? Because just because you’re a developer, not everyone listens to the show as a developer, but a lot, just because a developer doesn’t necessarily mean that development and or product are your zone of genius, you might find that you’re really good at left brainin marketing as folks like Ruben found out as folks. 

I found out, I’ve been writing codes since I was eight years old and I loved and I was a developer and I identified as a developer. It turns out I’m pretty good at building audiences and at coming up with educational frameworks that the stair step method and being an entrepreneur is making hard decisions with incomplete information and writing books. And I have this other thing that I’ve found in myself of almost like, I don’t know, it’s marketing, it’s copywriting, it’s whatever, brand building and stuff. So all that said, there are really only what six areas of a SaaS company. There’s product which is deciding what do we build next and how do we build it, how does it work? There’s design, which is obviously the visual aspect of that. There’s engineering, which is building right in the code, keeping things going. There’s marketing, there’s sales, there’s support and there’s success. And then there’s hr, legal and finance. But you should delegate all that. I mean you have to do it. Look on day one, you have to do all those. If you’re a single founder, if there’s two of you, you have to split up those six, seven things I just named. But what you said is exactly right, which is if you’re going to hire, you need to hire someone who’s better at it than you. And that’s something that I really didn’t realize until in the last 10 years.  

Derrick Reimer:
Yeah, I think that’s what a lot of us, when you put yourself in a position, maybe an artificially elevated position of I know best I started this company and I have the vision for it. And I mean I totally understand this pull to hold on tightly to everything. And I think sometimes that can lead you down a path of like, okay, I just need to find extra hands. I just need extra hands to delegate, to offload some of the stuff that I’m still going to hold on tightly to and own. And I remember when we required, drip was acquired and we joined Lead Pages and we brought on Brian Reed as our first designer. And I never fashioned myself as a graphic designer, but I think I’m a pretty good UI ux designer. But working with Brian definitely opened my eyes to like, okay, here’s somebody who has worked in companies where we need to actually start to scale a design department. 

And that is a different thing than having the expertise to take something from zero into something that customers love and use to then scale it into systems. So he started working on what’s our design system and it’s not, doesn’t necessarily mean spending a bunch of time working on something that’s not actually moving the product forward. A bunch of internal work. We did very lean on developing our design system so that we weren’t just spending a bunch of time spinning wheels, but he brought this experience on thinking about how do we scale this so that when we bring on more designers, they understand the system and we’re working in a coherent manner. So it’s like, yeah, I mean he had more expertise at that than me and it was really cool to work with someone then who brought that to the table and it was a really fun collaboration. So I think that’s the big word of encouragement here is to recognize that it doesn’t devalue what you bring to the table, but working with a subject matter expert on some of these disciplines is actually really fun. I think when you get used to it. Yeah,  

Rob Walling:
It is. And you can learn from them. When we were acquired, I was stressing to everyone about, oh my gosh, I have to go work for somebody. You have to go work for this company for a bit of time. And Ruben actually asked me, he said, what can you learn? How can you make this the best it can be? What can you learn? And we got in there and it’s like I had been running marketing for Drip, right? Working with Zach, who’s our junior marketing hire. And I was like, yeah, I’m pretty good. Drip’s growing obviously, so I must be good at it. Hey, I’m really hiring. Hey good marketer. Look at me. And we get in there and I’m like, oh, I don’t know shit about this. We figured it out, but I was not fine. I was middle of the road by the time we got in there. 

Just people who knew how to execute and like you said, build systems and just be better at it. So I was a perfectionist with every word, every word that was on that website I had written right? I wrote all the copy up till that point and I did want to let it go. I was just tired of having to, for me to write all the copy when I was trying to run this company. But what I realized was people came in and rewrote it and at first I was like, Ooh, that’s not mine. And then I was like, huh, that’s actually a lot better. So that’s the tough part, but it’s tough when you’re bootstrapping and you’re at 5K MRR. It’s like, can you hire someone who’s way better at you in these things? Maybe not. And that becomes the struggle of I start looking, I do start looking in cheaper locales. 

I say overseas being in the us, but really it could be South America, central America to find someone who is senior and who’s better at me than I am at that thing. And to maybe not give away my zone of genius. I wouldn’t hire someone to host the podcast and be high level strategy for MicroConf and TinySeed to be the face of the brand. You know what I mean? Those things. Those are kind of the things I need to keep doing. So in your SaaS in your company or if you’re a consultant or whatever, you’re listening to you, what are the things that you really need to do without the self-importance of I really need to do everything the best, but really get down to it? Most of us are good at one, maybe two things for you. I would say it’s product. It’s the ability to think of what to build, how to build it, how to elegantly incorporate it in, and then engineering the actual nuts and bolts of writing code and design is a third. I mean your full stack obviously. But to me design is kind of a third discipline, even though you’re very, very good at it. I think you’re actually genius level at the other two and you’re quite good at design. 

So those are things that you tend to hold onto with Cal.  

Derrick Reimer:
And I think just in general, this perfectionism quality that a lot of us have is it can be a really helpful inclination what allows you, drives you forward on performing your best work in certain areas. But I also think the blind spot that comes from that is especially early on, you’re talking about when you don’t have a lot of resources to go hire a world-class, fill in the blank, and you have to try to be a little bit more scrappy with bringing in extra hands. I think there is that phase where you just don’t have the luxury of being able to go find an all-star and then it’s an exercise in figuring out what stuff actually matters. And I think I’m still trying to grow in this area, to be honest. It’s a big struggle for me because I tend to think that a lot of things matter a ton, especially as I am, I’m competing on user experience. 

So all the details have to be on point, but the fact of the matter is you can get by with certain things. Just take for example, like an educational video that you send to a customer that explains how to do something right. My inclination is to want to either not do it or do it at a very, very high degree of execution. And really what matters most is that the customer understands how something works and that knowledge is transferred. And if it’s lacking that extra polish that would come from something that’s from a world class video producer or something, that’s okay in the early days, maybe you want to work to the place where everything you put out is at that atom wa and level of polish, but most of us don’t have just the resources to be able to do that and it’s not going to move the needle in that big of a way. So you need to just convince yourself about what things are really, really important and what stuff you, is it okay to just be good enough on?  

Rob Walling:
That’s exactly right. That is something that I’ve learned throughout my career and it took me a long time. Well, the first one was learning to just not do some things that seemed important that you just don’t do ’em all together and it doesn’t matter. The second thing is when I can phone it in, and that’s not, it’s do it quickly is really what it is. When can I do an unedited loom? This is like, Hey, I’m rob here, blah, blah, blah, and I kind of mess around, watch this on two x because it’s not great and send it to a customer most of the time, probably if it’s a one-off thing, you know what I mean? It’s like you can just crank on these things and then when to really polish it and when does it matter. And differentiating between those three levels is a skill that I think is very helpful to develop. 

We’ve actually answered one of Ollie’s later questions, which was how would you decide what to delegate and what to keep? We’ve kind of talked about that zone of genius. Are there things founders should never delegate? And I don’t say never, but certainly there are certain things that if you love doing a man, you’re really good at it and the business needs it. That’s kind of what you want to keep. Your role will change over time is gives you’re a million, 5 million, 10 million, you got to move more into strategy, blah, blah, blah. I would also say something we haven’t brought in is I have this very simple dichotomy of risk versus certainty. There are areas of your business where there’s just a bunch of, I don’t know, we don’t have marketing, we don’t have leads and I don’t really know how to close sales demos and there’s a bunch of uncertainty or risk there. 

And then there are things like customer support. We get the same 10 questions every day. We have a kb. I know that someone with knowledge of the product can do that. So that’s a certain thing In a lot of instances as your code base matures, not in the first month, but two, three years down the line, there’s a lot of certainty in writing code. Now you may have to spec it out, you may have to say, oh, it’s this feature and we’re going to hit all these. But you have a map in your head of like, I can code this or I can hand it to a developer who’s good and who I know will write high quality code and they can do it. And so that’s how I think about stuff in my businesses is where’s the risk or uncertainty? That’s what the founder should be working on. It is so easy and tantalizing and it’s like a big bowl of ice cream to work on certainty. It makes me feel good. It makes me feel like I’m good stuff. It is entrepreneurial procrastination, unfortunately, if you have any type of money to hire someone, go for the areas of certainty.  

Derrick Reimer:
Yeah, I think you just touched on this, but it sort of Jason Cohen’s joy, skill, need framework, which has been a really helpful framing for me to think about this. And I mean he’s sort of proven to be the master at reinventing his roles as now he’s gotten his companies to much later stages than a lot of us have. So he’s moved out of CEO into CTO and then into kind of a strategist. And so he’s very good at thinking about this and releasing the reins on control when he recognizes that he needs to reorient himself into the ideal zone. And I think a lot of us can’t necessarily be right in the middle of that joy skill, need Venn diagram because again, resource constraints. But I think if you recognize where you are in that, and I think a lot of makers are like joy and skill. 

We are very good at building products and we love doing it, but the business probably needs more marketing. I think that’s the story for maybe 90% of indie hackers and people who are come from the angle of developer founder, and maybe you have the resources to bring in marketing help. Maybe you have to roll up your sleeves and do it yourself, but even just being aware that okay, even if you don’t find it that joyful, joyous to do that work, it needs to be done. So you got to force yourself to do that. And maybe there’s, in the course of wearing many hats, maybe you do also spend some time doing the stuff that you really love. You should maybe, I don’t think you should give it all up. You might find yourself burned out and delegate when you can to bring in help so that you don’t feel like you’re just failing at marketing and not getting anywhere. But I think just being cognizant of the traps of focusing only on the stuff that you enjoy and that you’re skilled at, but not missing that key component of what does the business need.  

Rob Walling:
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And Ali’s, last question is, would you recommend several people across several marketing channels or finding a generalist? The answer is, it depends. Depends on budget really, and it depends on the stage. But here’s the biggest thing. There’s kind of three ways to structure a marketing department in SaaS. It’s the infinity budget plan, which is I have infinity dollars that I’ve raised from gie, they just keep depositing this in my bank account. Derek, it’s great. I would hire a high level marketing strategist slash project manager and then I would hire five independent, I’m sorry, individual contributors. They could be freelance or contracted or they could be W2, it doesn’t matter. But one is just expert copywriter and one is an expert AdWords and one is an expert Facebook and one is an expert. You get the idea. It’s like each marketing channel that just costs a load of money and so almost none of us can do it. 

So when I look at the TinySeed companies that are doing seven figures in a RR, I have this list that I keep this quite a few of ’em. Every single one of them, without exception, the founder has figured out enough about marketing or sales or lead gen driving new customers. They have not outsourced that for the start. Now some of them at a certain point get to 500 a million a year, 2 million. They do, they hire ahead of growth, but they already know the engines. The engines are already in place. I don’t know anyone, maybe there’s an exception here or there. So we can bring up who has just hired that out of like, cool, go find out how to find more customers. It’s much like doing sales demos like the founder. You just have to do it if you’re going to do it in the early days. 

So usually the model is one of the founders says, I’m going to learn marketing or lead gen because the reason I differentiate is marketing I tend to think of as inbound. And then outbound is not marketing that’s outbound. So I’m kind of lead gen. I’m combining two into that term lead gen, but they learn marketing well enough that then they, and they probably start as the ic, the individual contributor. I remember logging into the AdWords console and logging into the Facebook ads console and writing blog posts for seo. Like I did all of that. Am I the best in the world at it? No. Did I do it until we figured out, oh, this kind of works, and then I went and hired freelancers to take over. Yeah, there are some exceptions to this. If you have budget, obviously running ad platforms, LinkedIn, Facebook, AdWords, Instagram, obviously those do have experts that you can hire and are way better than you and they aren’t that expensive. 

So I would consider doing that from the start. But even to test, but almost everything else, it’s usually the founder being that strategist and then hiring ICS first, the founder doing the IC work and then hiring individual contributors to help out with that as you get budget. Because as marketing works, the company grows and as the company grows, you have more revenue and you take that revenue and you should invest that back in marketing. Usually it’s marketing and sales are the first things that you should be doing as you’re growing SaaS company. You have anything to add to that?  

Derrick Reimer:
Yeah, I mean, I think my own story is a little bit of an outlier case in part because I could find, because Corey Haynes was available who’s a very good generalist marketer, founder minded person. So a lot of times people have this type of person on their co-founding team and Corey happened to be available and is a collaborator for me to work with because I was at the time, didn’t have a developer, so I was just building product day and night, but also we were getting it off the ground and trying to do launches and figure out how do we get SEO engines rolling and how do we kind of working through the strategy. So we collaborated together on developing the strategy and it was just helpful to have an extra mind to think about these things. And then he did a lot of the sort of delegation of, okay, we want articles. We’re going to sub these out to a freelancer. And so he was in charge of, or a pool of freelancers, so he was in charge of building the spreadsheet of the keywords and it was all very collaborative between the two of us, but he was just basically in that role of the boots on the ground kind of project managing marketing stuff. And so that worked well for us. I don’t know how many generalist marketers are out there available to do that type of work as a contractor. So at the time I probably  

Rob Walling:
Almost no one.  

Derrick Reimer:
Yeah, yeah. I mean, I probably wouldn’t have been able to hire full-time a marketer. It perhaps would’ve been too expensive at the time. So  

Rob Walling:
You have a luxury of a marketer wants to work with you because of who you are and because of the beautiful products you build and they know that you’re going to execute quickly. The zero to one marketing is what kind we talk about. That’s the founder level marketing, trying to figure it out. And Corey Haynes can do that. Agent GIO can do that. Any founder who succeeds can usually do that. I mean, I can pretty much list all of the successful fast-growing companies within TinySeed or MicroConf, like, oh, the founder has some hand in the marketing or sales. So you’re right, you’re the exception. It doesn’t mean that’s where it’s like, it’s not always a never, but in general, pretty 80, 95, 8% of the time, that’s the pattern that I see. So thanks for those questions, Ali. Our thoughts were helpful. Next question comes from Tiago, his ex Twitter handle is WBE Tiago. 

He says, how do you manage partnerships with other SaaS or products in your industry? What do you look for? What partnering with other SaaS, how do you reach out to them? What are red flags? And I asked him, tell me more what you mean by partnering. And he said, I mean guest posts, integrations, giveaways, joint ventures, that kind of stuff. I wanted you to weigh in on this because Avi, you’ve done a lot, quite a few partnerships and I think some of them have resulted in good results. So I’m curious your thoughts and then obviously I have my own just from my own experience.  

Derrick Reimer:
Yeah, I mean I think just in general, these are a lot trickier in practice than they look. I think oftentimes, so many times I think partnerships are fraught with the dynamic of if someone is much larger than you, do they feel like you’re getting more of the benefit than them or vice versa, what do you both have to bring to the table? So early on in Savvy Cal, there was one particular partnership attempt with a company that was related and sort of made sense for us to explore building an integration at a deeper level than just our baseline integrations. And it ended up being a pretty big waste of time in the end because they felt like they were so much larger and ultimately they were kind of afraid to drive too much traffic to us. That felt out of balance. And so I think there’s going into any kind of partnership, it’s important to have a deep understanding of what’s the vision for how you’re actually better together, why bother doing anything at all? 

Because if there’s not a foundational story that we can all agree on, then these things are going to either quickly or very slowly crop up and kind of taint the whole endeavor. So sometimes it’s getting your product in the hands of their customers helps drive retention or fill in a gap in functionality where they’re losing sales because they can’t provide this thing and your product can fill in that gap. So it’s that question of how do you both win with whatever it is. And it could be as simple as like we’re going to build an integration and email our customers both about that. I mean, those are oftentimes pretty simple, especially if they have an API or you have an API, depending on the direction that the integration needs to go, a lot of times they can be pretty simple and the main benefit is it’s helpful for their customers. 

Maybe you get a back link from their website on their docs and there’s kind of a good little link together. And other times when it’s deeper, I think the big thing is looking for are they actually willing to invest in this or is it just sort of a transactional sort of thing. I’ve had outreach from larger companies that are almost like putting me through kind of a BDR process where they’re like, you can tell they’re reaching out to a lot of companies asking for integrations because they have some person, random person in their partnerships department who just is working the long tail of trying to get their service integrated with a bunch of other people. And those are not super high value. I don’t have any evidence that their customers actually want to use my product. They just are looking for another backlink and another notch on their list of integrations to be able to say we integrate with thousands of tools. So I think it’s trying to make sure, is there an actual case here? Have you actually heard demand from your customers for something like my product and vice versa, can we develop something meaningful here or is it kind of just this transactional, we’re hoping to get a quick win on some traffic.  

Rob Walling:
Yeah, I think that’s a really good way to think about it, to go up one level higher in terms of strategy, I think about integrations and partnerships as kind of the same thing, but an integration involves writing code, so a partnership, let’s just say it’s a JV partnership, joint venture partnership. This is what internet marketers used to do in the early two thousands where it’s like, I have a list. You have a list. Let’s cross promote our course to the other list. It’s free sales, and we can either do a one for one trade of we email without affiliate links, I email my list about yours, you email your list about mine, no affiliate links, or we can do the same thing and do affiliate deals, and that can happen. I did several of those with Hit Tail, which is a long tail SEO keyword tool. You remember Derek? We worked on it.  

Derrick Reimer:
Oh, yes.  

Rob Walling:
And I reached out to Rank Trackers. We did not have rank tracking, and I sent 10 emails and I got eight responses of like, absolutely, let’s do this. And what assets did I have? Well, we had however many thousand, I’m trying to even remember what the numbers were, but it was like a thousand customers and a marketing list of 10 or 15,000 maybe at the time. No, it was bigger than that actually, because maybe it was 20,000. And so I would reach out and say, let’s just do one for one emails. Just say, I want to use your rank tracker and then I want to recommend it and use Tail and recommend it, and that’s it. And we did that. Was it a massive flywheel that completely grew the business? No. But was it something that absolutely worked every time we did it? Yes, it would drive dozens of new customers. 

It would drive hundreds if not a thousand or 2000 of MRR if the list was big enough. So that’s a joint venture where you don’t have to write any code. You’re literally writing marketing copy. And then in integration, to your point, I see there’s integrations that you do for your customers. You integrate with Stripe because everyone wants you to integrate with Stripe. Stripe’s not going to promote you, PayPal’s not going to promote you. They may not even list you in their lab market, but you do it for your customers. Then there’s integrations you do for integration marketing, which is, remember with Drip, we integrated with Send, and we had 35 integrations, so I can’t remember them, but they were lesser known, even Gumroad at the time. We probably integrated with them in 2013 or 14. They were around, but they were not as known as they’re today. 

We integrated with them because our customers were asking, they were like, oh, I use Sendell, I use Gumroad. But also I approached them and I said, I want to integrate with you. We’re getting requests from customers. Here’s a screenshot of an email. Here’s things we can offer. We can publish a blog post. We can email our email list of, it’s probably by that time, 20, 25,000. We can post a tweet, we can write a knowledge based article. We can mention your company and app. We can host a webinar if you want. And so I would offer all that up and say, what can you reciprocate with? And whatever they could, we would just one for one those things. So if they could only do a blog post in a tweet, we did a blog post in a tweet, and if they said, you know what? This isn’t a fit. We can’t do it. I would seriously debate whether to do it to the integration if I was doing it more for marketing purposes. By the way, the whole list I just read is from the SaaS Playbook, page 97. If you want to know all the things that we used to do, I’ll tell you, the SaaS Playbook’s a great reference for me so that I remember these. You know what I mean? 

I don’t remember that list off the top of my head. So that’s how I think about it. I mean, you and I are definitely on the same page in terms of be cautious with just building things, thinking that it’s going to be promoted. I would get a commitment, I’ll say a verbal commit. It was in an email. This is what we’re going to do. What can you do? This is what we’re going to do back. So I had something in writing in case a product manager or a marketing manager switch things up later. I think that’s it. Oh, I guess Tiago asked how do you reach out to them? I mean, with Hit Tail, I did a bunch of cold email with Drip. It was a lot of warm network stuff as Drip became a brand, people knew it and it was easy to reach out and say, Hey, I’m the co-founder of Drip, and we want to do this. And what’s the other thing, Derek, going to events, going to MicroConf. There are a lot of people there at a MicroConf business software, even a bigger SaaS event. This is why I say build your network, not your audience. That network is so much more valuable than 10,000 people on X Twitter following you having five people that you can integrate with or co-promote or get in front of their audience is worth five times, 10 times the value of a social media following.  

Derrick Reimer:
Yeah, I think that’s the majority of, well, we have our integrations with the big players, but the smaller players that we integrate with, a lot of that is came from some degree of warm connection to the point where I could reach out, ping them and DM them or email them and make the case like you talked about, we’re hearing a lot of customers mention wanting to integrate our two products together. Here’s what we’re seeing. Are you guys seeing anything similar? And just start the discussion on have you heard anything? Oh, that’s interesting. You want to do a test? We get the ball rolling on conversation for good reason and not just be cold outreach  

Rob Walling:
To your point. And that’s something that didn’t use to happen. So if it’s happening to you now where you’re like, oh boy, I’m in a funnel, this is because marketers ruin everything. That’s exactly why. Our last question for the day was a question that was posted on a YouTube video from YouTube username and Derek Ddu, Plessy two 15, and I don’t remember what video was on, but the question is I would love a follow up to this episode on how you prioritize your Q3 or any quarter. So obviously building a SaaS versus what I do these days is different, but the question still applies. So I’m going to kick it over to you first. Derek Kremer, how do you plan for your quarter of Savvy Cal?  

Derrick Reimer:
Oh, yeah. There’s no notion of quarterly planning in my flow, and I think that’s probably the case for a lot. Same for me, for a lot of startups,  

Rob Walling:
Part of our biggest strength is that we are so nimble and can move so quickly, and frankly, 90 days in the life of a startup is like a year in the life of a big company. So trying to think of now, I don’t know, I’m going to be responding to customer inquiries and things as the market shifting. How can I move really fast? And so planning a quarter ahead would be, that’s just anathema to what you’re doing until you’re at, I don’t know, I don’t want 5 million, 10 million. When you have a bigger team, that’s when planning needs to happen. You got to get a bunch of departments on board and we’re going to launch this feature. So we need sales to learn about the feature, and we need support to know how to support the feature. We need success to know how to success the feature, and we need marketing to know how to market the feature. You know what I mean? That’s when you need quarterly planning. You can’t just come with a feature and say, Hey, we’re pushing this live tomorrow. That starts breaking things. So there’s a certain point at 2030 employees maybe where you need that. But today, so how do you do it? How far ahead do you plan?  

Derrick Reimer:
, I mean we generally have a sense for what the next four to six weeks looks like. I’m not a religious follower of Shape Up. I think that’s a pretty popular methodology from the Basecamp folks that people have latched onto as sort of a way to budget your time as a team and say, what are we going to? Let’s fix the time budget and then get done whatever we can on what we set out to do and flex the scope as needed. And I think that’s kind of generally, folks have coalesced around that as a good way to shape your work. And I think it scales down to pretty early stage as well. You might want to keep the cycle a little shorter. Six weeks feels long for super early stage, but when you get to a place of product maturity where you’re really just kind of incrementally improving it, I’ve seen that be a pretty helpful time range. And yeah, the goal there is to try to say, we’re going to build this thing and we’re going to build whatever version of it we can get done within our time constraints so that you don’t let projects just run away on you.  

Rob Walling:
Yeah, it depends on the stage and the super early stage. You and I would plan a day or two ahead. I mean, there were some features that took a week or whatever, and it’s like, all right, we’re going to plan for that. But we would shift pretty frequently when it was two or three of us because we could, and then it started being like, well, let’s do one to two weeks out. And one to two weeks was fairly locked in, although we would sometimes pivot of like, oh my gosh, there’s a huge opportunity here. But then what happens is, in my head, I kind of knew what two to four, two to six weeks was, but it was fuzzier. It was like, well, we do when we get there, but I kind of have an idea. And then as your code base matures, as your marketing matures, just your whole company matures. 

You hit 10, 20, 30 K, maybe 50 KMRR, that timeframe just slipped, not slips, but it moves out a bit. Like you’re saying you’re now at about four to six weeks of being more in focus, and I bet, but I bet still if I were to say, all right, so what are you going to do from six to 12 weeks? You have a fuzzy idea. You have a general idea. You’re not going to lock in and be like, oh, it’s this and that, but you kind of know, but once you get there, you’re then going to plan that far out.  

Derrick Reimer:
I wonder, have you seen, because I know the notion of quarters is very normative in sales in the realm of sales, sales organizations often think in terms of quarters, probably even more so than product development teams. But I wonder, do you have a sense of when does that normally kick in? Is it 20 to 30 team size ish, or when do sales teams need to start running on quarters basically?  

Rob Walling:
I don’t actually know. So sales team specifically, I don’t know, and obviously big Salesforce and these huge companies that have this Slack and all that, have these big sales teams run like that? Even if you were to ask me why do they do that? I have a guess. Oh, you have a deadline and your salespeople motivated by this and that, and maybe the commission’s paid quarterly, but I don’t actually know, so I’d be curious to get someone on the podcast, to be honest, a Jen Abel or a Matt Ock or someone else who really knows sales and said, why is that? Is it just because that’s how you’ve always done it? Is it, I mean, here’s something man, A friend of mine works at Intel and has, we both graduated college at the same time and he got a job and has worked at the same company the whole time, and I’m on my 23rd job, not literally, but close. Anyways, from the time he started, he would say, yeah, we’re doing our quarterly blah in the engineering department. They’re designing chips that are fabricated. You imagine the pipeline of that, the waterfall, this nature of that where it’s like 

You have to lock it in, you have to freeze this, and you put it’s in silicon and then it’s blah, blah, blah. So they did quarterly stuff and I was kind of like, why do you do that? And he’s like, well, that’s just how the company operates. And it does to me feel like an older school thing coming from that of Intel. But I also think you have to get people on a cadence of some kind, otherwise you’re just flailing around. Like we said, if you have six, seven departments and each department is five to 50 to a hundred people, obviously Intel’s bigger than that, but in a startup you got to have some type of cadence to get everybody on. This is the group of things that we’re going to do in each department during this quarter.  

Derrick Reimer:
I would venture to guess that, again, speaking a little bit from ignorance here, but that product teams, even when you’re 10, 20, $50 million company, I’m not convinced that a product development team should ever lock themselves into something that rigid, no, maybe sales. Maybe sales, but depending on when you bring in the adult supervision and people who know what they’re doing from large company sales orgs, maybe that’s the right way. But I would be very leery about ever of trying to apply that to a product development cycle.  

Rob Walling:
And I totally agree with that. And those are the companies where we eat their lunch as right, those are the companies. When you start moving my quarter by half a year on product development, no, good night. That’s when we’re going to demolish. You remember it? Was it Infusionsoft? They’re now named Keap. I thought they did one release a year and we were  

Derrick Reimer:
Pushing code, some kind of version thing, applied SaaS, which is like why  

Rob Walling:
Old school? And it was an old school mentality, and that’s not how you win in the market today, given how competitive it is. Awesome, man. Well, thanks so much again for joining me. Folks, want to follow you on X Twitter? You are Derek Reimer, and if they want to use the best scheduling link on the internet savvy cal.com. There it is. Thanks again, man. Thanks. Thanks again to Derek Rimer for joining me on the show. He’ll be back again in another month or two. If you enjoyed this episode, it’d be amazing to get a five star review in Apple podcasts or Google whatever they’re calling it these days. A thumbs up on YouTube or a like question mark plus thumbs up, something in Spotify. I don’t know how Spotify does if you’re listening to Spotify, look around to see if there’s a heart, but it’s great to have you here this week and every week, I’m Rob Walling signing off from episode 731. Well, hello, listener. You’ve stumbled upon our secret track, if you remember the track, endless nameless from Nirvana’s. Nevermind. That’s what you’re about to hear, except that was just a metaphor. I hope you picked up on that. Mr. Derek Rimer, I have questions for you. Oh boy. 

These are questions that I asked chat GPT to generate for me. My prompt was what are five intermediate level questions to evaluate a software developer’s understanding of Ruby on Rails? The first question, just so everybody knows, Derek has no idea what these questions are coming, and to be honest, I’m a little concerned. The answers might not be right. I don’t know. GBT give me questions and answers, so we’ll see. I’ll compare what you say to chat. Alright. First is, what are concerns in Rails and how do you use them to refactor an organized code?  

Derrick Reimer:
Okay, a concern in Rails, and this is funny too because my Rails knowledge is about five years outdated, so well boy. But I think a concern is basically a mix in, it’s a way to abstract some logic into a separate, my terminology is all messed up. I’ve been in functional land. It’s like a separate, it’s not a class. Is it a module? Do you have modules in Ruby? I think it’s a module. Great.  

Rob Walling:
I love this. Just so everyone knows, Derek wrote tens of thousands of lines of Ruby on Rails code for Drip, the entire big monolith written in Rails. So you had a decade of rail, you had a lot of years in Rails, but it’s funny how quick, like you said, it’s five years old and you’ve replaced a bunch of that knowledge with, is it Elixir Phoenix? Is that  

Derrick Reimer:
Basically, yeah, so it’s more like functional paradigms. I haven’t written object oriented code in a while. It was funny, I was doing a podcast episode with Ben Ornstein recently who was also a Ruby Rails expert back in the day. And I was trying to explain how something would work in Ruby Land, but I was using all the wrong names for the active record accessories. I was just so used to the naming conventions from Elixir,  

Rob Walling:
You recoded it. So in the early days when I was becoming a professional developer, meaning getting paid for it, I was a full-time employee of a dev shop. And so every project was a different language, and so it was like PHP, it was original active server pages before.net. There was ColdFusion. I learned Pearl this dates, it was 20, 24 years ago. But I rolled through ’em all and I remember being like, all right, I’m not great at any of these, but at least I had a big swath of it. Then at a certain point I went where the money was, which is.net, and I dove deep, deep, deep into net, and then I was 5, 6, 7 years into that, and the pay rates were great, but when I tried to then come back to anything to PHPI was like, I just can’t. The paradigms are so different. You have to unlearn it, and that’s where it’s tough. Totally.  

Speaker 3:
Yep.  

Rob Walling:
It’s good that I come prepared then, because I also asked no joke, Chad, GBT, what are five intermediate level elixir Phoenix questions? I did this on purpose, so let’s see if these are easier. We’ll just skip the rails one. We don’t have to do five. Let’s do a couple. First is  

Derrick Reimer:
Wait on the concerns. Was I right? What did Chad GT say?  

Rob Walling:
Actually didn’t say, it just said, this question tests their knowledge of code organization and how to keep their models and controllers clean and maintainable.  

Speaker 3:
Okay.  

Rob Walling:
So maybe someone can tweet us XX, Twitter us at Derek Reimer at Rob Walling and let us know, Hey, was Derek right? I’m guessing you’re right. That’s going to be my, alright. How does the Phoenix framework handle real-time communication? Explain the role of channels and presence in Phoenix?  

Derrick Reimer:
Ooh, yes. So this is actually one of the cool benefits of Elixir because it’s built on Erling, which has all of this very realtime capabilities built into it because it was built by Ericsson back in the day for running text message infrastructure. So think of all of these gazillions of processes and need to be running, and they’re all in parallel and they don’t necessarily need to affect each other. So it’s just designed inherently with that in mind of many, many processes that shouldn’t crash each other. And this works really well for web socket’s use cases where you have a bunch of people potentially on your site and you want to keep an open channel via web sockets to be able to stream data back and forth over a channel. So channels are the mechanism that Phoenix has for basically opening web socket connections and then sending data up and down that pipe instead of going through old school HTP requests, which are a little bit slower. And then the presence feature. This is actually a tricky computer science problem to solve when you’re active on a browser window and you want to show that that person is actually present there. Keeping that state synchronized with the server is kind of tricky and you just get that for free from sockets. So yeah.  

Rob Walling:
Yeah, I think that’s correct because once again, I said, here’s the problem. I asked Chad JPT for questions that I liked for an interview. It didn’t give me the answer. It just says what each question will test. So yes, correct. Derek ding,  

Derrick Reimer:
Am I hired?  

Rob Walling:
You’re hired. These are the questions. We never ask these questions. Remember in interviews or like, no. Do you have a take home test or we can look at some of your code,  

Derrick Reimer:
Right? Yeah, yeah. Explaining how a web request works.  

Rob Walling:
Yes, exactly. What is H-T-T-P-S? Alright, last one. What are gen servers in Elixir, GEN servers in Elixir and how would you use them in a Phoenix application?  

Derrick Reimer:
Yes. So gen servers, this is kind of hearkens back to that fundamental architecture I was just talking about, but basically it’s a way to manage state in an elixir application. And it’s a little bit quirky. This is kind of more in the advanced principles of Elixir that a lot of new elixir developers don’t even necessarily have to learn about in order to get started with it. But if you start peeling back the layers on how Phoenix works and then how to do certain tricky things that involve, you have this centralized state and you need to make calls to it or just either fetch, fetch data out of that state or just make a mutation call or something. And it’s like the shared state that’s shared across all the processes that might be running in an elixir application. So we use these as an example, like this cool little subsystem where we have to throttle how many requests we make to the Microsoft API. Like they don’t allow more than five simultaneous requests at a time to any given API token. And this is actually a pretty difficult problem to solve in a distributed system, but using a gen server, we can basically spin up a pool of threads, sort and these threads service requests. And if you get 10 coming in at the same time, they kind of line up in the pool and you can control concurrency. So that’s just one example of how you can use gen servers to help out.  

Rob Walling:
I love that you’re giving me really serious complete answers. It’s just that I’m like, wow, do you really know your, of course you do. And you’re taking this serious, it’s great. It’s great. So anyone listening, I’m trying to get hired. Here you are. I really need a gig, man. Alright, last question In Dungeons and Dragons fifth edition, what is Hunter’s Mark? So just so for context, Derek has played a, well, it’s a seventh level ranger now named Ford, Ford Ranger, and you have played this ranger for I believe, five years now. I think the first game was in late 2019 that we played five years Hunter’s. Mark is a critical key component of a ranger. So Derek, what does hunter’s mark do?  

Derrick Reimer:
Oh boy. Okay. I think it’s a spell right and it allows me to mark an opponent and when I do that, I gain some sort of advantage on attacks. I don’t remember what that advantage is.  

Rob Walling:
You gain extra damage.  

Derrick Reimer:
Extra damage.  

Rob Walling:
There we go. Yep. So it’s not technically advantage on attack. That would mean like 2D 20, you take the high one, but once you hit, you get an extra D six.  

Derrick Reimer:
Lowercase a advantage.  

Rob Walling:
Exactly. I’ll give you, yeah, credit on that.  

Derrick Reimer:
Okay. Alright,  

Rob Walling:
Well thank you for playing the startups For, the Rest Of Us pop quiz.  

Derrick Reimer:
Yes. I’ll just be waiting to hear from HR about that.  

Rob Walling:
Yep. We’ll be back in touch. Got that job. Okay, cool. Thanks. Let you know. Awesome.

Rob Walling:
I’m back with another episode of, Startups For the Rest of Us. Today’s episode is Hot Take Tuesday. Welcome back, Einar and Tracy, and we talk about topics relating to bootstrapping and growing your company, including how mostly bootstrap company, Gymdesk, sold for more than $32.5 million. In fact, after we recorded this episode, I recorded an interview with the founder of Gymdesk that will air on this very feed in the next couple of weeks, so stay tuned for that. Today we also talk about whether hiring is getting easier for bootstrappers, what changes in mindset might be present between founders at different MRR levels, how to identify what really moves the needle, and more Hot Take Tuesday topics. 

Before we dive into the episode, if you’re not on the email list for this show, you should head to startupsfortherestofus.com, enter your email. What you’ll receive from there is a weekly email with the show notes and a recap of every episode with timestamps. You can of course opt out of that and still receive the less frequent emails we send. But you’ll also receive two never-before-released episodes, Eight Things You Should Know Before Launching Your SaaS, and, 10 Things You Should Know as You Grow Your SaaS, as well as a PDF of the 5 PM Framework. 

In addition, I’m just wrapping up a book about selling your company. My wife, Dr. Sherry Walling and I, are in the final days of locking in that manuscript. If you get on the email list here, you will hear about that book when it goes live. So, with that, let’s dive in to Hot Take Tuesday. Welcome back to this Hot Take Tuesday Roundtable. My first guest is someone you know very well. Tracy Makes on Twitter, our very own Tracy Osborn. Hey, Tracy. Welcome.  

Tracy Osborn:
Excited to be back.  

Rob Walling:
It’s been a while since Hot Take Tuesday. Bit of travel, bit of not a lot of news. I mean even today, I like the docket today, but two or three of them are just questions that I think that-  

Tracy Osborn:
It’s the summer.  

Rob Walling:
Yeah.  

Tracy Osborn:
Yeah, things are chill.  

Rob Walling:
My other panelist is TinySeed’s very own, Einar Vollset. Welcome to the show.  

Einar Vollset:
Thanks for having me.  

Rob Walling:
Let’s dive right into our first story, and we will link this up in the show notes. It’s a PR Newswire article. It says, “Gymdesk announces a $32.5 million dollar strategic growth investment from Five Elms Capital.” Gymdesk of course being a TinySeed company.  

Tracy Osborn:
Yeah.  

Rob Walling:
So, we are stoked about this. I’m very happy for Eran, the founder. I think the question I want to toss to you first, Einar, is, does this prove or at least help to prove our thesis of TinySeed? Which is B2B SaaS companies are worth a lot of money, and even the little ones, even the TinySeeds and the MicroConfs, they don’t have to be unicorns to have enormous valuations. Obviously raising at 32.5 million means this company is extremely valuable now. So, talk us through your thinking.  

Einar Vollset:
Yeah. I mean, they didn’t raise at 32.5 million, they raised 32.5 million. The valuation was even higher than that. I think it’s a great story. As we know, even the majority of our successful companies don’t even necessarily raise any more money after us, but I think what this shows is that some of the TinySeed companies will grow into companies that will take this kind of money from growth private equity, where it’s like, there’s a lot… I actually think a lot of people don’t realize that these software private equity growth capital funds even exist. They think, okay. There’s VC and that’s it. But realistically, once you get past about a million in ARR, there are pretty deep pools of capital that are interested in investing in these kind of companies and taking them further and taking them to the next level. 

So, in that regard, it’s very exciting for us. It’s obviously very exciting for Eran and the team, and I think TinySeed, we sold some of our equity as part of the transaction, but we also rolled a substantial amount forward, and we expect them to just keep growing. The big player, so Gymdesk is obviously in the gym management fitness space. The big player in the space is publicly traded, Mindbody. Everyone in the space hates Mindbody, and I think there’s a path to where Gymdesk basically becomes the better version of Mindbody and potentially is public down the line. So, for us it’s very exciting.  

Rob Walling:
It’s great as a founder to enter a space with a big incumbent that everyone hates, and to be in a vertical. This is something I called back in January, my predictions for this year of vertical SaaS and orthogonal SaaS are the places where we see a lot of opportunity for founders, not only to get in and carve out a space for themselves, but I would argue, I would posit that exiting and evaluations can likely be higher than if you’re building a big horizontal thing.  

Einar Vollset:
I think that’s true. I mean, I think in general too, I see this in the Discretion Capital side. We see the appetite for M&A and outcomes is substantially higher for sticky vertical SaaS, where there’s high recurrence, low churn. Obviously they want growth, but they don’t need to have 500, 600% year-over-year growth to have a business that is backable or acquirable at that size. It’s also, it’s one of those things like, look. Gymdesk, they raised his money at a huge valuation, but the only other money they raised was from us. That was it.  

Rob Walling:
Right. I wonder if this means they’re no longer mostly bootstrapped because that’s a lot of money. It’s a lot of money. Just so people have an idea before I kick it to Tracy, Einar mentioned Discretion Capital, he is the founder of Discretion Capital, which is an M&A advisory for B2B SaaS companies doing two to 25 million ARR, and Discretion represented Eran and Gymdesk in this transaction.  

Einar Vollset:
Yes, indeed.  

Rob Walling:
Tracy, what’s your take on this whole deal?  

Tracy Osborn:
To repeat what Einar said, it was the whole private equity path. When I was a startup founder and when I first started TinySeed, I didn’t even realize that was an option. I’ve been seeing articles, I’ve been hearing Einar talk about this for the last few years, and then I’ve been seeing articles in the last few months about more people talking about the current economic climate when it comes to venture capital, and how private equity is becoming more of an option, or more of something where people want to go for. People are more aware of it and it’s more of a desirable option for a lot of companies that are wanting to exit. 

So, it’s really cool to see an example on this directly from TinySeed. I think this is a great example to other founders out there who might be struggling with traditional VC to look at this direction, because I think there’s some folks who are just like, “Uh, private equity.” I think there’s cases like this where you can see where private equity can position Gymdesk and give them resources they need to grow up against something like Mindbody.  

Einar Vollset:
Yeah. I think it’s true. I think fundamentally a lot of people have a view of private equity is from a Bruce Springsteen song. It’s like they came to town, they bought the factory, shut it down, and now my father’s an alcoholic, type thing. But what this proves, and look. Gymdesk isn’t the first company, TinySeed company that did this. We’ve had at least one or two more. We think, given the number of companies that we’re backing and how they’re growing, we’re expecting more and more companies to decide that they’ll get to a million or two or five or whatever, and decide that whatever got us here won’t get us there. Having more capital and in some cases advice and experience to go from say five to 50 million in ARR, is a viable path. 

I also think that there are more companies that started out on the IPO VC path, and have built substantial businesses that make sense. They’re doing two or five or 10 million or more, and they realized they’re not growing it. I think it was Gary Tan had put out some stat about 2023 as like, the medium growth rate you had to have to be a successful series A VC, raise a series A VC round in 2023, was 600% year-over-year growth, but-  

Rob Walling:
A lot of companies aren’t going to hit that.  

Einar Vollset:
That’s not the only path. Yeah, that’s not the only path. Look, there are companies out there, there are investors, certainly you probably have to be at a reasonable scale. The fundamental thing about private equity is they care more about downside protection than VC does. But the flip side is, if you can provide that downside protection by being at a certain scale, then the kind of outcome that they’re looking for, three to five X in three to five years, might be better and more aligned with what it is that you want to do with your life. It’s like the way that I put it in one of the projects that I’ve got going called, Next Catalyst, is do you want to be rich or do you want to be king? There are some people who basically the thing they care the most about is to be famous. They want to be known as the Elon Musk of the world. They want to be known as an amazing startup founder that succeeded and rang the bell at NASDAQ. Then there’s the rest of us who is like, “You know what? I’d rather just be rich.”  

Rob Walling:
Onto our next topic with layoffs and back to the office, in effect. Is it getting easier for bootstrappers to hire? Tracy, what is the word on the street? We have 171 investments across TinySeed, B2B SaaS, almost 300 founders now. What’s the word that you’re hearing in terms of hiring difficulty or ease compared to the last couple of years?  

Tracy Osborn:
That’s an interesting question. Actually, I’m not sure if I have specific stats on that. I have a lot of gut feelings. I mean, hiring is always hard, right?  

Rob Walling:
Gut feelings are fine.  

Tracy Osborn:
Yeah. Hiring is always going to be hard. With the folks who are used to working from home and they want to have those benefits of working at home, there’s pros and cons in all of this. Where these giant companies want people to go back to the office, and so they could be looking for… Might be easier to find these folks who are wanting to work from home, and might be easier to find those folks that work at those big companies. However, the other thing that I think I’ve heard about is also the mindset of these potential employees and whether they fit within a bootstrap company. 

Because a bootstrap company is not going to pay as well as one of these giant companies. There’s going to be a lot of benefits, like working from home and the flexibility that you would get that people might have got used to in this era of being able to work from home. But bootstrap companies are going to have to work a little bit differently. So, there’s some pros and cons there for the folks who are trying to find these workers. It might be easier to find people, but they might not have the right mindset.  

Rob Walling:
To give you some data, we just released a State of Independent SaaS Report for 2024. Folks can download that at stateofindiesaas.com. In it, let’s see, I’m on page 18, it says, “85% of companies we surveyed,” so we surveyed 700, almost 700 bootstrap, mostly bootstrap SaaS companies, all MicroConf, TinySeed type companies. “85% reported that the difficulty in hiring people is either the same or easier than last year.” That feels about right. Most people are saying it’s same or easier. In addition, this was I think the first year where we saw hiring, maybe it was the first time we surveyed because it was two years ago, but, “We see that 30% fewer companies are hired in 2023 compared to 2021.” 

Again, this is bootstrap companies. We know there was a big VC bubble and there was a lot of hiring and now there’s layoffs, but it certainly happens across our type of bootstrap companies as well. The plan to hire in the next 12 months was down 17%. So, even though it, to me, anecdotally and obviously from these numbers, it appears that it is easier for bootstrappers to hire. I think a lot due to what I already mentioned, which was like, there’s a bunch of layoffs and there’s a lot of back to the office, and that’s all… Being remote has always been a bootstrapper advantage. Einar Vollset, you have anything to add?  

Einar Vollset:
No. I think that’s pretty much it. I mean, I think certainly the return to work is part of it. I also think there’s less competition from the larger firms, who back in the boom days were just hoovering up every talent and not talent in the world. That’s not been happening and layoffs have been happening. So, people aren’t just like, “Why would I ever work for a bootstrap thing? Anyone can get a job paying crazy money at Big Co.” Those days are not there anymore. So, that might be part of it too.  

Rob Walling:
Our next topic is a question from Twitter, and I don’t know if I want to answer the exact question. So, the question is from @SunglassesFace, name is Orly. “What change in mindset do you notice between founders with 100 MRR, 1,000 MRR, 10,000 MRR or 100,000 MRR?” The reason I want to change the question is, we’ve watched dozens of founders hit all of those milestones and they’re the same founder. The mindset doesn’t shift that much. You look at a Ruben Gomez or a Ron Galperin or Gymdesk. It’s like, the mindset from the start was, do things really fast, ship a lot of… Be mostly correct. Be right most of the time, have a good gut feeling. You do that when you’re at 100 and you do that when you’re at 100,000 MRR. But I don’t think that’s what Orly @SunglassesFace is asking. I almost think the question is, how do the challenges that you face differ from 100 to 1,000, to 10,000, to 100,000 MRR?  

Tracy Osborn:
Well, I think it’s a misconception, because some folks, I think, when they’re at the early stage, it’s like, “Is my mindset wrong? Is the reason why I’m not growing, is it because of my mindset?” So, I think that question stems from this misconception and that’s what you’re trying to explain. I just wanted to harp on that thing, is that there’s a lot of things to do. It’s not necessarily just mindset, you have to have a growth mindset, but that growth mindset is going to be there at every stage.  

Rob Walling:
I agree. With that in mind, Einar, what do you think the changes are? We don’t even have to go through all four of these. But when someone’s at 100 MRR versus 10,000 MRR, let’s contrast those to start. What are the different challenges?  

Einar Vollset:
I don’t know. At that stage, I don’t know that there is a difference, because I think it’s not that different. There’s a right, I think, strongly opinionated, there’s a right mindset and it’s just, move fast and just do a lot of… Just when it’s working, keep doing more of the stuff that’s working. I think what I observe, and maybe it’s because of how I operate and what I do, I think there’s more of a break at above even these numbers of what he’s talking about. I think what we very commonly see is, I think a lot of people, whether they’re at 100 or 10,000 or whatever MRR, they have this view that, “Oh, once I get to a million in ARR,” 83.33 whatever it is in MRR, “Then everything will be great. That’s it. I’ve made it. I just need to do more of the thing that I’ve already proved, proven to make it.” 

Actually, Jason Cohen did a great piece on this, talking about, well, I think he called it the Elephant Curves or something like that. It’s basically the myth of continuous exponential growth. What he says is, I think he used the example of HubSpot. He says, “Look. It looks from the outside like it just is up and to the right graph, and that’s how they did it. They just did more of whatever it was that was working. But actually, if you look underneath the covers, it’s one growth curve stacked on top of the other. Where it’s basically, they launched a new product and then they added another channel, and then they launched another product, and another channel.” I think the biggest mindset change that I’ve observed repeatedly is, people, once they get past about a million in ARR, or two or three, they get to the stage they’re like, “Oh, my growth is stalling out now. What I was working, my market is saturated, my niche is saturated.” 

The mindset change becomes, “Okay. I’ve got to do something new again. Not just a thing that was working. I’ve got to go after another thing and another thing and another thing.” That, I think, is the biggest mindset change. The people who fail to do that, quite often they end up in a situation where, because all growth decays over time, they end up in a scenario where they have a great business that’s growing 100%, and then they have a great business growing 40%, and then they have a great business that’s growing 15%, and then they have a business that’s not really growing, and then it starts to decline and now they’re like, “Crap. I should have sold this a couple of years ago.” I think that happens a fair bit.  

Rob Walling:
Tracy, what do you think about these revenue MRR levels? Do you agree with Einar? He was saying 100 to 1,000, or 100 to 10,000 is similar. Because I think there’s a difference at 10,000, but I’m curious to hear what you think between these levels.  

Tracy Osborn:
Yeah. What I have in my notes was, early stage is finding product market fit, middle stage is pouring fuel on those areas at work, and then later stage is broadening out. So, disagreeing with what Einar says, and I’ve seen this as well, is that folks get to that certain level of one million in ARR and they’re like, “No. I don’t want to do it again.” It’s like, yeah. You have to figure out how to do it again, but in a different area. So, I guess that’s a mindset thing, is of just that growth mindset, being aware that you’re going to have this wonderful growth and the mindset of knowing that it will end, and therefore being able to react or prevent it and react appropriately before that down curve happens. That is something that we’ve seen a lot of folks run into that trap.  

Rob Walling:
Right. Looking ahead at your plateaus.  

Tracy Osborn:
Mm-hmm. Don’t wait till the plateau happens.  

Rob Walling:
Yeah. I talk about it in three phases, and there are more than this, but the first phase is building a product. Second phase is building a business, third phase is building a company. Usually I think of product as being zero up to usually about 10K MRR, to be honest. It’s like, “I have a product. I’m trying to figure out, does anybody want this? Can I sell it? What’s the pricing?” You’re just fumbling. You have almost no product market fit, or very weak product market fit. Between 10 and 20, I feel like, “Oh, now I have revenue, I’m probably going to have expenses. I have to start thinking about this as a real business a bit.” Then I think from that point up until somewhere in the 50 to 100K, that’s where you’re building the business. Then 50 to 100K, I think you’re building a company. That’s when it’s like, “I need really good people. I probably need to start thinking about hiring managers and delegating a lot more,” because usually in a SaaS company, you have a lot of folks on your team.  

Tracy Osborn:
Not going to be the first person on the ground anymore, relying on other people. A lot of things are going to change at that point. The mindset to be aware and ready for those changes too.  

Rob Walling:
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Our next topic is how to identify what really moves the needle. This is a question from SanderFish on X Twitter, and it was asked directly of me. I posted, I don’t know, it was about a month ago, and said, “Hey, ask some more intermediate and advanced questions.” I like this one. SanderFish says, “Often it feels like SaaS success is an accumulation of many small decisions and improvements over time.” Which I would 100% agree with. “How do you identify what really moves the needle?” Tracy Makes, how do you identify?  

Tracy Osborn:
I like that Einar brought up earlier in the last question, talking about founders constantly working on new things and getting things done. In that, folks also need to be… They don’t need to lose track of analyzing how well those things do. It doesn’t have to be that hard. As things are going through, make sure that you’re adding the right referral links or whatnot, so that as you’re setting up these marketing campaigns and working on three things at once, that later on you can spend 15 minutes going back and being like, “All right. Cool. I did these three things. Now I can track all these things that are happening.” 

Sometimes people can get into this thing where they’re like, “Got launch, launch, launch. Do things, do things, do things,” and it’s like what actually was working? What was actually worth the amount of time that you were spending on this? You have to remember to do maybe a monthly cadence of looking back at what you have done in that month and then analyze what things are happening. So, you actually can identify what’s moving that needle. That’s hard to do as a founder because you have to be constantly launch, launch, launch, and it’s really easy to forget to do that analyzing process.  

Rob Walling:
What do you think Einar? How do you identify what really moves the needle?  

Einar Vollset:
I think while important, it’s more important just to do more… Then if things are going well, then great. So, I think there’s two hurdles for most founders that I see, that I work with. The main problem isn’t trying to figure out what’s working, it’s doing enough experiments so that something is working. Look, if they do 25 things and then two or three of them are working, but they’re not totally sure which ones are working, but they’re just doing it, that’s much better than what most people do. Which is they overanalyze and do two things and neither of them work, or goes backwards. That being said, I do think it’s important, to Tracy’s point, once you have some stuff that is working, it’s got to be like, “Okay. What do I double down on? What is it that’s really working?” 

Because the other thing that, mistakes I see people make is, they’ll read the Traction book from Gabriel Weinberg, and they’ll try a bunch of things and something’s working, and then they figure out something’s working, but then they won’t really double down on it and try to squeeze everything out of it and really explore how big that success can be. Instead, they wander off and pick something else to do, and then another thing and another thing. It’s the point where, look. This was working, just double down on the thing and just make sure you squeeze the full growth out of it.  

Tracy Osborn:
It’s like shiny object syndrome, because it is really fun to launch a new marketing campaign. So, it’s just like, “Oh, how to set up this thing, how to learn a new thing and do this kind of thing,” and forgetting to really track on and follow up on those things.  

Einar Vollset:
I think sometimes people have this, once they have this working, I know that I do this sometimes, it’s like if they have something that’s working, they’re always like, “Great, it’s working. I always know that I can rely on that and do more of it if it’s working. So, I’m just not going to do that because I have it in my back pocket. Then I’m going to go do these other things and explore more so I have more things in my back pocket.” I think that’s a mistake most of the time. Particularly for growth channels and things like that, it’s like, no. This is working now, but you have no idea, does it work 50% more? Does it work 5,000 times more? You don’t know until you really try. So, I think that’s a mistake people make.  

Rob Walling:
Yeah, it’s funny. Tracy said, launching a new marketing campaign is fun, so is launching a new product. It was just building more, so is writing features. I think there are a lot of rules of thumb and a lot of frameworks and guidelines that I talk about on this show, we talk about in MicroConf and obviously to TinySeed companies that are in my book, whatever. You should probably listen to them in most cases, if you don’t know anything else. It’s like, this is a great start. It’s like, learn the rules, then master the rules so that you know when to break them. But if you never learn the rules, then you don’t know that you shouldn’t start a B2C two-sided marketplace with Freemium and launch seven products and blah, blah, blah, and try to do viral marketing on my social media following. 

I think I’m going to build some incredible business. It’s not impossible what I just said, but the odds are stacked dramatically against you. So, listen to those who have gone before you. When I think about trying to figure out what’s going to move the needle, usually I think, what has moved the needles for others? A million things I could do, but founders who have it working, what are they doing? Then try to generalize that. So, I look at the best, most successful founders. I mean, I was doing this as I was coming up and saying, “What’s Jason Cohen doing? What is Hetan Shah doing? What is these people who are building incredible businesses?” Einar, you have to discount it. They’re not Steve Jobs and they’re not Elon Musk. I am a bootstrapper. I can’t model myself after those people. I can’t even model myself after Basecamp, because I didn’t launch a SaaS in 2004 that gets… What did they say? 10,000 trials a month or something. 

It’s just, I’m not in that situation. They can do stuff, like not market, like not sell, because they’re in a luxurious position, and good for them. The luck and timing were one and two, Jason Fried told me that for their success. Unless I can replicate luck and timing, I can’t, then I need to look at folks who do it and grind it and figure it out, like Eran from Gymdesk, like Ruben from [inaudible 00:25:00]. There’s dozens and dozens of TinySeed founders that I would look at and try to model. That’s why I write the SaaS Playbook. You can buy it for $10 on Kindle, read through that. If I were to try to prioritize stuff, I would start with the stuff in that book, not the stuff that I see people yapping about on Twitter. 

The approach is where it’s like, build an audience. Yeah, great, that’s fun. But it’s not for your SaaS company. Build your network, not your audience. So, I don’t know. I prioritize things by first trying to have some type of framework to limit its infinity, things I could try, down to 20, 50. There’s only that many. Then I would, if I have a gut feel, a strong gut feel, I would do it myself. Otherwise, I would get people involved. I’d say, “Einar, what do you think I should do?” I’d say, “Tracy, Ruben, Eran, what do you think I should do?” People in my mastermind, advisors, whoever, “What do you think? I am down to this list of three now, which should I try first?” Get an outside counsel and then go for it.  

Tracy Osborn:
Yeah. It helps get you out of that tunnel vision and out of that, “Oh, I’m really excited about doing one thing because that’d be more fun,” versus the other thing that’ll actually move the needle.  

Rob Walling:
That’s the thing that… I talk about this all the time, where it’s the ice cream versus spinach. What’s really yummy is ice cream. I want to lose weight, but I want to eat ice cream and not spinach. Those two don’t go together. So, when someone tells me, “I want to grow a SaaS company.” “Great. Here’s my advice,” blah, blah, blah. They’re like, “Oh, but I want to do B2C and I want to launch seven products and see what sticks.” I’m like, “So you want to eat ice cream and think that you’re going to be…” That’s my analogy that I make. Implicit in this question, how do you identify what really moves the needle? 

Honestly, what moves the needle is often not ice cream. What moves the needle is often not what we want to do, unfortunately. There are examples of folks who did exactly what they want. It’s like the one person who built a social media following, and maybe there’s three. Built a social media following and also just writes a lot of code, and that works. We all want to do that as builders, but usually what moves a needle is not that.  

Einar Vollset:
Because I mean, the reason everyone’s heard of them is because it’s noteworthy.  

Rob Walling:
Exceptions.  

Einar Vollset:
It’s like, holy moly. Look at this guy. He’s on the beach in Thailand and he’s got seven products and they’re making $50,000 each, and it’s working really well. Everyone’s like, “Oh, I’ve got to follow this guy. Look at this.” Well, yeah. But for each one of those guys, there’s 500 people who are running a million ARR, or five million ARR, or 100 million ARR businesses that did nothing of that.  

Rob Walling:
Yeah. It’s a trip. It is a survivor bias. I’m not taking anything away from people who’ve made that work, but it really reminds me of a rock star or someone who gets into the NBA. Like there’s 500 NBA players, I believe, approximately. It’s like, how many people each year try to get into the NBA? That’s what this feels like. It’s that hit based, you’re decreasing your odds. Those are not the things you should be working on. The blocking and tackling of what we talk about on this podcast, and what we talk about at MicroConf and what I put in my books is-  

Einar Vollset:
Can you tackle in basketball? Is that allowed?  

Rob Walling:
I switched metaphors to sports ball, to football.  

Einar Vollset:
Sports ball.  

Tracy Osborn:
Nerd.  

Einar Vollset:
Blocking and tackling in basketball would be hilarious. We should do that.  

Rob Walling:
We should have full contact basketball.  

Einar Vollset:
There you go.  

Rob Walling:
On that note, we are going to wrap up today’s Hot Take Tuesday. Tracy Osborn, you Are Tracy Makes on Twitter, and also one of the folks behind the @TinySeedFund Twitter account, X, Twitter. This is what I’m calling it now, but…  

Tracy Osborn:
It actually works out pretty well when you say X Twitter, it’s like-  

Rob Walling:
Like E-X-Twitter.  

Tracy Osborn:
Exactly. Used to be. Company formerly known-  

Rob Walling:
Formally known. Yeah.  

Tracy Osborn:
Because when I say X, it’s like, what are you talking about? So, I keep saying X, Twitter. Einar Vollset, you are Einar Vollset on Twitter, mostly Tweeting about the San Francisco Giants.  

Einar Vollset:
San Francisco Giants. Who are playing really badly at the moment, but will turn it around.  

Rob Walling:
It’s possible. It could happen. Thanks you two. Thanks for joining me.  

Einar Vollset:
Thanks for having me.  

Tracy Osborn:
Thanks for having me.  

Rob Walling:
Thanks again to Tracy and Einar for joining me on the show this week. Thanks to you for listening to, Startups For the Rest of Us. Whether you’ve heard six episodes, 60 episodes, or 600, it’s great to have you back. I enjoy spending every week in your earbuds. This is Rob Walling, signing off from episode 727.

Rob Walling:
You’re listening to Startups for the Rest of Us. As always, I’m your host, Rob Walling. And in this week’s episode I’m flying solo to bring you a handful of topics that I think can provide you with some motivation or a framework or even a tactic or a strategy to help you grow your business faster. Most folks who listen to this podcast are bootstrapped or mostly bootstrapped founders. Many of them are starting SaaS companies, but there are also folks across many industries including info products, construction, legal, folks who just want to hear the stories, the guidance, the advice. Topics for today include an update on the The SaaS Playbook, sales numbers, and I have some interesting findings and takeaways from those. I’m not just going to rattle off a bunch of numbers, but give you percentages of what channel sold the most and some learnings that you might be able to take away from those numbers. 

I’ll be talking about having access to information versus motivation, and I’ll talk about making your first level last. Before I dive into my first topic, I want to encourage you to check out Discretion Capital. So if you’re a SaaS founder and you are approaching seven figures of ARR recurring revenue and you at some point have thought about selling your company, you should reach out to Einar, the founder of Discretion Capital. You’ve heard Einar on this podcast. He is also the co-founder of TinySeed. Discretion Capital is an M&A advisory for B2B, SaaS doing between two and 25 million ARR, and they get amazing multiples. This is what they do for a living is handle this process for you. And the reason I said if you’re approaching a million is usually even if you’re not at two, you want to start thinking about this 6 to 12 months before you sell. 

You want to get things in order and just understand what the process might be like. You can talk to Discretion. Einar is not a sales guy. He’s not going to push you on stuff. He’ll have a conversation. What is your B2B SaaS business worth? If you’re getting inbound offers already to buy your business, do you need someone who can help give you some advice on what you can do with those? And of course, finding the best buyer for your SaaS. This is where we talk about how once you’re doing 1 or 2 million, you switch from net profit multiples to revenue multiples, and that’s what Discretion Capital does. They are the best in the business at what they do. And of course, I wholeheartedly recommend them, discretioncapital.com, if you want to find out more and schedule a call with Einar. 

So to start with, this week as I’m recording this, I posted on X, Twitter. I said, well, SaaS Playbook has just sold its 29000th copy and I give thanks to everybody. And by the way, if you’ve purchased a copy or you’ve gifted or recommended it to a friend or you’ve given it a shout-out online, I’m super grateful because that is the number one reason the book continues to sell. And I totally appreciate any word of mouth. If you really think about it, across my audience of say it’s about 125,000 people across YouTube, podcast, email lists, whatever, and that’s trying to de-do. But if you just added them all together, it’s significantly more than that. But trying to actually get to a real number of folks that I can reach, I would figure that I would sell 6 or 7,000 copies of a book. And realistically, the Kickstarter sold somewhere around 3,500 copies I believe. 

There was another almost a thousand that was there. So it’s like four grand. And then the first month or two after the book was released, it sold another 2,500, 3000 copies. So it is in that range, that 6, 7, 8,000. The reason the book gets to 29,000 copies is because people talk about it. It really is people talking about it on Twitter, on Reddit. Probably a couple of times a week, maybe more I get an alert from all the monitoring that I have set up of someone mentioning it on a podcast again, on Twitter, on Quora, on Reddit, on other platforms. And that’s really what makes a book like this that is self-published and aside from my audience, there is no marketing engine behind it. I guess there’s a few ads on Amazon. You can buy ads there if you have a book or a product you’re selling. 

But realistically, the reason that it’s about to hit 30,000 is very much because of folks like you who read it, who like it, and who share it. And since we’re a bunch of data nerds, I want to give you this breakdown of copies sold by sales channel because a lot of folks who have never written or self-published a book would’ve no idea. So of all the copies of the SaaS Playbook sold 29,000, 35% of those, just over a third have sold through Amazon, and that’s split evenly, almost 50-50 paperback and Kindle. And realize that Kindle sell for 10 bucks and I get $7 from each of those sales. And then the paperback sells for what? 25 and the printing cost is only a few dollars. And then I think they also take 30% of that, so another 7.50. So I think I get maybe $15 per paperback copy sold. 

Next up in terms of sales volume is Audible with 26% of the volume. So keep in mind 35% on Amazon, 26% on Audible. Now Audible is brutal. They’re a monopoly and they keep 75% of each sale. So I get 25% for my audiobook that I wrote, produced, recorded, paid to edit. I own the copyright and they are literally just a marketplace where I’m listing it and they’re taking 75%. People complain about Apple’s 30% cut and nobody’s mentioning Audible’s 75% cut. Audible will only take, only in quotes, 60% if you give them exclusive rights to sell your audiobook. But I sell it directly on SaaSplaybook.com as well so you can have DRM free, MP3s and I also only pay 3% to Stripe. And so if you don’t make it exclusive, then they take 75%, which is again, just never ceases to amaze me, but that is what it is. 

Third in line, Amazon was 35%, Audible was 26, and my Kickstarter was a quarter of the copies, 25%. So I guess at the top of the episode when I said it was only 3, 4,000 copies, it was actually more than that. So you can do the math easily on 25% of 29,000. Next up is 11% have sold directly from SaaSplaybook.com. And if you’re going to buy the electronic version, PDF, EPUB or audio, it helps me out if you go to SaaSplaybook.com. Now, I don’t think of the books as a major revenue stream but it really does make a difference where when I pay Stripe 3% versus paying Audible 75. And finally 1% Apple Books. I question, I think it’s sold 1% of 29,000. So what is that? 250 copies or something? It’s actually less than that. I question if it was even worth the effort to put it up on Apple Books because it did need some specific conversion that I had to pay a designer to do and then posting it, managing it. It’s just kind of an eye roll. 

It’s kind of interesting how little, I guess Kindle just came in and ate their lunch. I guess that makes sense. So top line sales is best as I can estimate, because some of these platforms like Audible make it really difficult to understand how much you’ve actually sold. But top line revenue is just under 400,000, and my best estimate is paid to me as “royalties” or a percentage of the purchase, about 275,000. So again, I haven’t thought traditionally of books as being a revenue source, but obviously that’s a lot. And that’s a year. Yeah, less than a year since it’s been out. It won’t keep doing that every year, but obviously that is not a trivial amount of money. 

And finally, the breakdown across formats is 43% audiobook. That’s between Audible and selling from SaaSplaybook.com. So 43% audio, 29% print, that’s paperback and hardcover. And then 28% just below it, almost 50-50, 28% ebook, which is Kindle, PDF and EPUB. So yeah, some of the learnings here are Amazon, really Amazon and Audible, Amazon owns Audible. I mean they have accounted for 60% of the sales. And obviously some of those are from my audience who bought it once it came out, but realistically, they really have a stranglehold on the book industry. And I understand why now, if I was a publisher why I would be concerned because Amazon can throw their weight around it and they can de-list your book or they can put the rankings down if they don’t like you, or they can pull all types of pricing shenanigans. So that’s one learning. 

Another learning is that if you are going to write a book, obviously having an audience will sell some copies in the early days. And then what leads to recurring sales where every month you’re selling X amount of copies really is having a good book that people want to share. And that’s not something that each of us can snap our finger and make it magically happen, but there is certainly something to be learned about if you’re going to do this, make it really good, don’t half ass this. I see people who hire a ghostwriter to write a book that they pump at the start for a month or two and then it just falls off the face of the earth. And I ask myself, why did you do that? It feels like a huge waste of time. I guess it’s now a resume builder or something to put on LinkedIn or whatever it is. 

But if I were in your shoes, I would certainly give it my best effort to build something that hasn’t been written before and to make it so good that people want to share it. And a little update on my next book. So I know I’ve talked about the SaaS Launchpad a little bit, which is like the precursor to the SaaS Playbook and it’s early stage ideation, validation and all that. I’m putting that book on ice. It was 75, 80% done. And what we decided to do instead is turn it into a course through MicroConf. So there’s going to be a video course coming out called the SaaS Launchpad, and it’s everything that I know about coming up with ideas and validating them and pre-validating them and building a launch list and all that stuff. And it’s like, I don’t know, 26 videos. It’s very intense. We’re in the middle of editing those now and should be launching that in the fall. 

If you’re interested in that, be sure to either sign up for MicroConf.com’s email list or you can obviously go to this podcast website, startupsfortheresofus.com, enter your info there and you’ll get The 5 PM Framework, which is something I’ve talked about here as well as two never-before-released podcast episodes that you can only get by signing up for the Startups For the Rest of Us email list. But I am about to wrap, it’s about two weeks from when I’m recording this and we are basically doing a, I call it a code freeze, it’s a manuscript freeze on my next book, which I’m co-authoring with my wife, Dr. Sherry Walling and it is about the psychology and the mindset of selling your company. And it’s thinking through whether you should, the pros and cons. It’s dealing with a pressure cooker that is the process of selling your company. 

So the before, the during and then the after. I’ve sold, now what? How do I make sure I don’t implode during any of these times? How do I think through the pros and cons of making all these decisions and how do I come out the other side happy and not someone with 5 or 10 million dollars in the bank who is completely miserable? Obviously the content comes from my own experience, my experience counseling and advising founders for years through TinySeed, through MicroConf, and then Sherry’s experience working with hundreds of clients, many of whom have sold or have evaluated selling and have gone through the painful process. And so we have stories and quotes and our own expertise as well. And I hope to be doing some pre-sales for that later this year, maybe November if things work out really well. So stay tuned for more info on that. 

My next topic for today is a quote that I heard from a running coach. So on Netflix, there is a series called Sprint and it follows runners who are going to the Olympics. It’s 100 and 200 meter runners in the U.S. And both Sherry and I ran track. We actually met on the track in college. And so I love the sport, we both do. And Sprint is an awesome… It’s documentary style where they are following them as they go through the trials and the tribulations. And you can lose a race by two hundredths of a second or three hundredths of a second because your start wasn’t as good and you can be at the top of your game and the former Olympic champion and you can get third because you just don’t perform at the peak all the time. Really good show, highly recommended it. Even if you’re not into running, it’s just one of those things about competing and being exceptional and hard work, luck and skill all coming into play. 

But one of the most winningest track coaches of all time had this great quote in an episode and he said, at this level, you don’t teach them how to run fast. You teach them how to run fast better. And I like that as a metaphor because really this coach won’t take folks who don’t have the raw material and the sheer speed to be able to be a world champion or have the potential to be an Olympic champion. And similarly imagine if you are evaluating a founder to invest in them or you’re evaluating a potential team member. In a perfect world, you wouldn’t have to teach them how to do their job. You just want to teach them maybe how to do their job better, if that makes sense. Or have them teach you how they should do their job better at your organization. Because any of us can hire a super junior person, you could hire an intern and train them up, and then you do have to teach them how to run fast. 

And is that okay? Sure it is. But if you’re bootstrapping and you’re hiring your first 10, 15, 20 people and this person doesn’t already know how to do the job and you’re going to train them up from scratch, unless you really, really need to save on budget, that is a case where you are going to spend a lot, lot of time training them unless you have someone on staff who can train them. Again, if you get to 20 people and you have a bunch of senior folks and you hire a junior, yes, one of those senior folks can train them. But if you as a founder are training them on the nuts and bolts of running fast in their role, the basics of customer success, the basics of customer support, if they’re a successful support person, you’re making your job really hard. And this is one of the bigger mistakes that I made in the early days of Drip, is I hired really junior people and it was, I use the excuse that, well, this is all I have money for and I want people to be local. 

And really to be honest, in Fresno, California there weren’t that many people with the experience that I needed. And especially if I was going to be hiring them and they were a senior customer success person or whatever, probably working for a Bay Area company and making a lot of money. And so there just was no budget for it. But realistically it took a tremendous amount of mine and Derek’s time to train these folks up. And it’s like, do I have regrets about it? I don’t think so. But I think if I were to do it differently, I might’ve hired more remote folks or figured out a way. There are just other ways around it. I know that it was a tremendous amount of time investment at the early stages. And look, I actually love mentoring people. I mean, if you take anything away from me and what I do, there’s a reason I put out 52 podcast episodes a year and now 26 YouTube videos a year. 

And I’m writing it seems like a book every 18 months is that I do like teaching people. I like passing on what I know. And so doing that in a startup, it was very fulfilling to me. And so I actually did enjoy it but the problem was had jumped out of an airplane. And like Reid Hoffman said, we were putting the parachute together. We were building it as we were falling to the ground. And in that case, you don’t want to also be teaching the person next to you how to build a parachute. You just don’t really have the time. And so if I were to do it all over again, I would probably try to find people who already knew how to run fast so I could teach them how to run fast better. 

My next topic is having access to information versus the motivation to learn a topic. I think this was a guest on maybe This Week in Startups or it might’ve been the All In Podcast, I am just pretty sure Jason Calacanis was on it. But it was a guest and they were talking about learning to code and how everyone’s going to be able to code because of ChatGPT and developers won’t be needed anymore. And I just don’t believe that’s the case at all. I mean, we’ve seen the same thing with no-code. It’s like you can build some stuff, but we still need developers to build things. And I think for the foreseeable future, when I look out 5 years or 10 years, we will always need builders and makers and I think even beyond that, but of course it’s hard to predict 15, 20 years of what’s going to happen. But the idea here is that learning to code, the hard part used to be it was hard to find information. 

So when I was eight years old, my parents got me an Apple IIe, me and my brother, and there was one book we got with it and it was called How to Speak Basic to My Apple. And I had learned to speak basic to the Apple because I read through that book and it was painful. You typed in the programs, they called them back then and you made syntax errors and you learned from it. And that’s how I learned to code. And if I had lost that book or the book actually got beat up and lost some pages, it was very hard to find other resources to teach you how to code. But now it’s everywhere. It’s all over. I mean, you can go on a YouTube channel or you can go to any of these teaching platforms like Udemy and Skillshare and you can go to boot.dev, you can go anywhere and you can learn to code for free or for a very low cost, really high quality curriculum. 

So why hasn’t everyone learned to code? It’s because it’s not about access to information, it’s about the motivation and desire to learn it. And I’m not saying this to imply that, oh, people who don’t learn to code are somehow lesser or they’re not as smart, it is nothing about that. Or they’re unmotivated, nothing like that. I’m just saying each of us has a proclivity towards doing certain things and my mind has always worked mathematically. I love to read. I love to write. I’ve loved math and programming. And other people, they are built differently and can they learn to code? Of course. But do they really want to if you force them to learn the code? My kids are this great example actually where I’m like, no, learn to code. Really, you should learn to code. And here you can make video games and neither of them want to do it, and they just don’t have the desire or the motivation. 

And we can also say, what about no-code right? Well, no-code you can definitely get more done without grinding. You basically have kind of a prefab house where the walls are all built and the windows are all built and you’re just kind of pushing them in versus when you’re writing code, you’re crafting your own nails and you’re building your own hammer, and then you’re using that to nail in the nails. And when I asked myself, do I think AI is going to make coding so much easier that you don’t have to be motivated to learn? I just don’t think that will happen. I think we will rely on developers who can learn more easily because there’s content out there because AI can teach them. But to maintain the code and to tweak any of the code and to build something really elegant and maintainable, I guess to say that word again, that’s a skill. 

And some folks will want to do that. Some folks will have the motivation and the desire to do that and others will not. So really what I’m saying here is democratization of information or of training across any discipline, whether it’s code or anything else, does not imply that everyone in the world will soon be doing that. And when I hear folks saying it’s usually the hot take on social media, everyone’s going to learn to code. There will be no jobs, no-code’s going to do it. AI’s going to do it, I just don’t buy it. 

My next topic stems around a quote from John Romero who is the co-creator of id Software and co-creator of Doom and Quake, several other games. The best audiobook that you can listen to him or I guess there’s a physical copy of that somewhere I’m sure, there’s dead tree versions is called Masters of Doom, and I would highly recommend it. I think it’s certainly my top five audiobooks of all time and maybe my top three, just an amazing, amazing story. But John Romero also has an autobiography called Doom Guy. And while I like that one less, it’s still cool if you want to dive into the lore. But one quote that John Romero said in chapter 27 of Doom Guy is he said, “I always make my first level last.” I really like the sentiment of that. Basically he learns the aesthetic of the game, the feel of the game over time and it develops. And he wants to put his best foot forward by the time he’s getting towards the end of developing or designing the game, he has that all in his head and he knows what it feels like. 

He knows what the gestalt is, and he can put his best foot forward in that first level. Instead of you imagine building it first and it no longer aligning with things middle of the way down the line. Or you’re kind of rusty, you’re kind of getting the creeks out, and you don’t want that to be your first level because you want the first level to be a banger. And when I heard that, I thought instantly, yeah, this is why we always created our onboarding last when we build SaaS apps is like, I’m going to build the app. What does it need to do? Here are the pages. Even if it’s a very simple MVP or it’s a 1.0. And then we would think, what steps do people need to take to get on board and to get some value? It is a minimum path to awesome within this app. And that’s when we would then go back and architect the onboarding. 

And it’s the same sentiment here is we already knew how everything worked. We knew the gestalt to the product, the core of it, and we wanted to put our best foot forward. We had worked out the kinks and we wanted to put the tour, whatever we were building, kind of a walkthrough, a thing that prodded you to keep going and get your JavaScript installed and get your first email built and all that. And it really made sense once we had a full picture in our heads of the entire layout of what people needed to do. Now, the interesting thing is I was trying to equate this to marketing too, of like, ooh, write your marketing copy last. Build the app, you’re going to launch it, write the headline after that. I think that’s interesting, I think possibly. 

The other thing though that I think is really clever and it’s something I’ve done several times, which is we’re going to launch a product. I’m actually going to write the marketing copy first. I’m going to write the headline. I’m going to write all the features, and I’m going to bake that down into a long-form sales page. And write it first then go build that product. And that product might be code or it might be a MicroConf offering like Mastermind Matching or what have you. Then usually I will come back and revise that marketing copy. So in essence, am I writing the marketing copy last? Maybe not technically, but I’m definitely using the knowledge as I’ve worked the kinks out as I fully understand now the gestalt of the product we’re going to launch and I come back and optimize and refine that marketing and the sales copy. 

Similar to even sales language and sales conversations. If you’re going to be doing demos, obviously you’re going to develop those towards the end of the product development because you have to learn from that. And of course there’s a lot of iteration that has to happen there as well. That’s all we have the time for today. Thank you so much for joining me. If we are not connected on X, Twitter, find me. I’m @Rob Walling. And if you haven’t checked out The SaaS Playbook, head to SaaSplaybook.com. Thanks again for joining me. This is Rob Walling signing off from episode 726.

Rob Walling:
You’re listening to Startups For the Rest of Us. I am your host, Rob Walling, and in this week’s episode, I bring Ruben Gamez back on the show to answer Intermediate and advanced listener questions. I made a call for questions on the show and on X/Twitter a few weeks back and asked for questions that weren’t aimed at beginners, at people validating and pre validating and trying to find ideas, and received great questions about how to think through freemium, when should you start to really, really care about brand, revisiting your sales and marketing funnels, SEO in the age of AI, and I couldn’t think of a better person to bring on the show to hammer through these than Ruben Gamez, founder of SignWell. He’s a super knowledgeable, super successful, bootstrapped, and now mostly bootstrapped founder, and I think this episode turned out great. We dug deep into the questions that we answer today. 

Before we dive in to those questions, I have been hard at work on a video course called the SaaS Launchpad. It’s everything I know today about the early stages. So in contrast to the listener questions we’re going to answer today, this is about coming up with ideas, how to pre validate, how to validate, how to build a launch list, and all types of things that you’ll experience in the early stage. And this video course is going to go live here in the next couple of months, but if you want to get on the list and be the first to hear about it, as well as receive a bonus if you buy the course early, you can head to SaaSLaunchpad.co. 

I’m actually really stoked about this course, it’s everything I know about how to get those things done. And I’ve teased on the podcast a few times that I have a mostly written book on this topic, and basically have sidelined that. And I took all that content and turned it into this video course where I felt it is much more easily consumed and I think it will be more effective for folks. So SaaSLaunchpad.co, if you’re interested. And with that, let’s dive into listener questions. 

Ruben Gamez, welcome back to the show.  

Ruben Gamez:
Thanks for inviting me.  

Rob Walling:
Always great to have you, man. Really good listener questions today. I keep calling them … I’m trying to figure out the name. These are intermediate or later stage questions, because it’s not about idea validation and building an MVP. And the reason I wanted to have you on is there’s a bunch of questions I feel like are right in your wheelhouse, things like freemium, SEO. I don’t know, there’s a few others, so it’s a really good docket today. And our first question is from MicroConf attendee and man about Twitter, Val Sopi.  

Val Sopi:
Hey, Rob. Val Sopi here, founder of Blogstatic. Thanks so much for everything you do for us bootstrappers with your podcast, the MicroConf Conference, and now TinySeed. My question is about freemiums, as Blogstatic is a B2P product and I’m looking for ways to grow faster. After listening to episode 717 with Marie Martens of Tally and how they’ve succeeded with their freemium approach, I started to think about how freemium could work for Blogstatic. 

My biggest concern is fighting spam, as Blogstatic is a front-facing app and not something companies use internally. This means I have to comply with my hosting provider’s rules and having content on my service that doesn’t comply could get me in trouble. Yes, I can use AI, but I currently don’t have the time to re-engineer the sign-up flow as I’m fully focused on sales and outreach. 

The goal is to have a generous free plan, so it’s not just a gimmick, with premium features requiring an upgrade. By now I know which features trigger an upgrade, so I think I can create a useful free plan that doesn’t hinder growth. The purpose of this would not be to convert more free users, as they don’t convert as much, but to use the freemium model so more people talk about Blogstatic and it becomes known as the go-to solution for blogs. 

With all that said, my specific question is this, should I do it? And if so, what’s the best way to tackle this? The only way it would make sense is if it helps Blogstatic grow 10X from here, which means $200,000 ARR. Otherwise, it would be an added burden for me and the business. And when I say 10X growth, I don’t mean the freemium alone doing that, but hoping at least it would assist the other outreach efforts I’m currently undertaking such as social, SEO, paid ads, and direct outreach. 

It’s worth mentioning that Blogstatic is already a super low cost product starting at $19 per year, with a fully featured plan at $49 per year, which most customers buy. At the time of this recording, there are 430 active paid accounts bringing about $20,000 in ARR almost two years in come October. Year-over-year growth is at 200%. Visits to trial are 10%, and trial to pay are whopping 26%. Year-over-year retention is not that great at only 56%. Thanks again, Rob, and I look forward to hearing your thoughts on this.  

Rob Walling:
For those listening, Blogstatic is everything you need to run a professional blog, no code, fully customizable, SEO ready, this is his H1 and H2 obviously fast loading, fully featured, and as he said in the voicemail, it is a very low-priced tool. What do you think?  

Ruben Gamez:
I think we mostly think about this in the same way. Usually if you’re bootstrapping, it’s a tough way to go. I almost default to no freemium unless there’s an opportunity here. So I think … I was recently talking to a friend about this. There’s a side to where your business needs to be the right type of business where freemium can work, and the space, and we’ve talked a little bit about this before, to where if you have a high support app or a high cost app to serve customers, then it’s going to be really tough to do freemium. 

If you have an app to where it has some viral component or not even that, beyond that, if people using it in some way, shape or form make it better or easier for you to convert other people, whether they expose other people to the product or they create content and that content can get you more traffic or whatever it is, there’s something there that Brian Balfour talks a lot about growth loops, it creates a growth loop there. Then that has potential. It has to be big enough, the space needs to be usually big enough, if you’re doing true freemium. 

One of the things that I think a lot of people overlook when it comes to evaluating freemium is whether there’s an opportunity in the space for it. Meaning if everyone in the space or a lot of people in the space are offering freemium already and you’re just going to be one of those, then what makes yours different? What makes yours special? Why are people going to talk about it or promote it or anything, especially if you’re new coming in. So I think that’s one of the underrated things that people don’t look at. If no one is offering freemium and then you see at the low end there’s an opportunity there and there’s some sort of almost demand, then that’s potential, I think, in that situation. 

The other thing is not just creating freemium, you have to promote it too. You have to do something. It’s not just create the free plan and then you put it out there and that’s it, you’re done. It’s not going to get picked up because of it, just because you have something that’s free. So there are multiple things in here that I’d take a look at.  

Rob Walling:
Cool. So you’ve set the stage of freemium, and what I like is you have these criteria and it’s like if most or all of these are not present, it’s probably not worth it. Like you said, you default, I know, with bootstrappers because freemium kicks revenue down the line, and when you’re bootstrapping, revenue is just so critical because you need it to survive, you need it to market. If you had buckets of money in the bank, you raise half a million, $5 million, whatever, you can kick revenue down the line because you have that bucket of money. But when you’re bootstrapping, it’s riskier. 

And I like that you pointed out it’s not just “Go freemium,” and it just markets itself. Even we were talking about how Marie from Tally was on the show a couple of months ago, and how they had a free plan, but she sent thousands of DMs, cold DMs and warm DMs to get people to use it. How did you … I guess your freemium with SignWell, the marketing of it is the SEO engine you’ve built.  

Ruben Gamez:
Yeah, that’s a big part of it, but we’ve also been deliberate with certain segments that we have to where we’ve actually gone into communities and promoted the freemium plan and actually in some cases given a different version of the free plan to where we’re giving away more because we know it works in those communities and it just helps overall. 

So you have to be deliberate about it, you can also just run the math and know, okay, if you’re planning on saying that, “Because we have this powered buy or we have some other thing that’s going to expose people to our product and that’ll help create some of the word of mouth, some visits that will eventually convert,” things like that, then you could just run the math and see, “How many of these websites do we need? How many of those pages need to be out there?” and then “What, roughly speaking, will be the conversion rate? And then from those, how many of those will be free?” And you start to see that you need really big numbers, a lot of times, to make freemium work. It gets tricky in that when you just run the math.  

Rob Walling:
Absolutely. And you have big numbers, Tally had big numbers. It was 100 … I forget. It was a lot. And then the conversion rate was low. And same with Dropbox. Anybody who’s ever talked about this, it’s like 2% every year convert to paid and 3% … It’s some number I typically hear in that range, I’m sure it can be higher or lower. 

But something that Val’s asking about is he’s saying, “I’m not really looking to convert the free users. I’m trying to do this so word spreads so that more people talk about it so that it becomes the de facto.” I’m not sure how I feel about that. What do you think about it?  

Ruben Gamez:
So we did a little bit of that. I’m okay with that approach as long as you understand what you’re looking for. So you can’t say, “Well, in a year we’ll know whether this is working or not.” That’s just way too long. But there are things, especially a lot of times people just look at MRR or the number of people who converted to a paid plan or whatever, something that’s more of almost a lagging indicator in a lot of ways. And you can look at things that are early predictors of whether this is working. 

So one of the things that we looked at a lot the earlier days, for freemium, was our branded searches, “Are those increasing?” And even basics. The basics of, “Are people using the free plan?” If they’re not using the free plan, then it doesn’t matter how many sign-ups you’re getting, if the usage on it is low, if the repeat usage on it is low, then it’s probably not going to work. If you’re seeing … Even if you just have a form, on your sign-up form, if you have a field that says, “How did you hear about us?” and you start to collect a little bit of that and you’re like, “Oh, okay, we’re starting to see it pick up.” 

So something that I saw a long time ago that I really liked from Sean Ellis back in the day, remember when he bought KISS Insights from Heaton? And he renamed it Qualaroo. And it was already freemium, and I had a conversation with Sean at the time because we were from time to time talking about freemium, and he told me that he didn’t think the freemium was aggressive enough, so he wanted to test that. So then he took three months, and I really liked his approach. He said, “The next three months, I’m just going to open it up heavy.” He did that and then he just looked at not the conversion numbers or anything, but at other signals that told him that this is starting to work. Not that it worked, but, “This is actually starting to have the impact that I think.” And he didn’t see the impact that he wanted, and then after three months, he just went the other way. He stopped freemium completely and raised prices, just as I said, the other direction.  

Rob Walling:
I like what you’re saying here, which is, “Hey, you can’t wait a year to see if it’s going to work. You have to have these early signals, and do you know what signals you’re looking for?” Right?  

Ruben Gamez:
Exactly.  

Rob Walling:
And in Val’s case, I think something that’s … I’m a little worried about, is he said, “My goal is to have a generous free plan so it’s not just a gimmick, where any premium features require an upgrade.” So how much is this going to cannibalize … His existing revenue is not a ton. I think he said it’s $20,000 ARR, but if that cuts your MRR in half, this is what we’re talking about, it’s a struggle, with bootstrapping, if you need that revenue. 

What do you think? Separate from freemium, I don’t know, Val. Val and I, I met him at MicroConf Europe in Lisbon, so I feel like I’m talking to him directly, but what do you think of him just 5X-ing his pricing? Because right now it’s $20 a year, $50 a year, $100 a year. And I want to see $100, $250 and $500, or even $100, $500 and $1000, and just figuring out what you have to add to make that work. Just make the pricing change, see what happens to the business. Doesn’t sound like it’s growing like wildfire as it is. I know Val’s working on it, but will anyone sign up? 

If it cuts it to zero for a month or for two weeks, it’s like, “Okay, I did the experiment,” but then also, “What can I build to make this worth it?” And what other options are people using? Do I have to be this cheap because it’s a commodity space and there’s a bunch of other options and I really need some differentiator? But I almost personally … if he wants to kickstart growth, I think of going in that direction rather than freemium. What do you think?  

Ruben Gamez:
Right. If we’re talking about speeding up how quickly he’s growing, then we just know that companies that basically charge more money tend to grow the fastest. And you’ve mentioned this about TinySeed companies and the patterns that we’ve seen in the recent survey about SaaS as well, and just from founders that I know, the ones that charge more tend to grow much faster. So I do like that. But I think you’re right. It’s really easy just to say, “Well just raise prices,” and sometimes that works because so many founders under-price. But if you entered the market as a certain type of product and cost savings is a big part of it, or it being cheaper, it might not be that straightforward to just raise prices because we have a little bit of this problem as far as if we decided to kill freemium and raise our prices, there are a lot of references over on the internet and a lot of different places that basically push us as a really great free e-sign tool, a good alternative at 20% the price of DocuSign or whatever. 

So if we were to do that with SignWell, we’d have to account for that and have a strategy for it. I like how you paired, yes, raising prices, but also changing the product, maybe changing some of the positioning and accounting for some of that stuff, like the expectations of the existing traffic that you have coming in. And it’s easy to say, “Well, the price increases didn’t work,” and it might just be because the people who are coming into your website are expecting something and you’re not matching up with that. And that doesn’t mean you shouldn’t do it. It just means that if you’re going to do it, you’re also going to want to have a way to bring in the people that have the right types of expectation on the pricing side.  

Rob Walling:
Yeah, I think that makes a lot of sense. So to answer his ultimate question, if you were in his shoes, would you try freemium the way he’s proposing it?  

Ruben Gamez:
I would look to see if there was opportunity to feed the freemium engine. If I saw an opportunity and a way to get big numbers, then I would experiment three or six months like Sean did, and really look for some of those signals and then be decisive. If I’m not liking what I’m seeing, shut that down and then go in the other direction that we were just talking about and know that yes, if we position our product to where people that are coming in are expecting really low-priced products, then I’ll raise prices, but it’s also probably going to take time to correct that.  

Rob Walling:
And you were saying if there was a big volume of potential top of funnel, typically SEO, right?  

Ruben Gamez:
Right. Yep.  

Rob Walling:
You heard it here first, folks. That is Ruben’s recommendation for Val Sopi. So I think if you were to ask me, because you just know so much more about freemium than I do, having been doing it for the past several years. I have secondhand exposure to it through you and other TinySeed companies that do it, and other TinySeed companies that have shut it down because it’s not working or have had to adjust it. And my gut … I think I already made my recommendation. If I were in his shoes, I would do the price increase. And as you said, it comes with positioning. There’s a bunch of stuff that comes with that. It’s not just as simple as, “Oh, raise your prices,” and it fixes it magically. But that would be my own personal leaning. So thanks for that question, Val. Hope it was helpful. 

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Next question is from Josh Ho, he’s jlogic on Twitter/X. And I had asked a question. This is … I have a couple dozen really good mid-level, more advanced questions. And Josh responded to that and he says, “When do you start to really, really, really care about brand?” And I like this question because 12, 15 years ago, I would’ve said, “If I’m doing SaaS, I don’t really need to worry about brand because I build a tool that gets in the way of traffic of people who need the tool. And if the tool does the thing they need, like the long tail keyword tool or the invoicing tool or whatever, I have SEO, I have ads, I have whatever else, and that’s it. No one’s buying it because of my brand.” 

That was when I was a young wide-eyed early stage … it was someone who had a bunch of little six-figure businesses, some five-figure, and I didn’t really need brand. And then I started realizing, “Oh, Startups For the Rest of Us is a brand, MicroConf is a brand, Drip became a brand, TinySeed obviously is a brand. There’s the books, SaaS Playbook becomes a brand.” And I realized the power of that. And branding always turned me off because every book you read about branding, every example, it’s Colgate toothpaste and it’s Intuit. And I was just like, “Well, I’m not that. I don’t give a (beep) about this.” 

But what I’ve realized is that, even people in our space, is the bootstrappers that get to that, I don’t know where, sometimes it’s mid to high six-figures, sometimes it’s at low millions or whatever. But you do start to get a concept you introduced me to where Jason Lemkin calls it a mini brand, where you’re not a brand like Target or Colgate, I guess, but people know your name and people are talking about you on the internet, on Reddit, on Quora, in private Slack groups. 

And the moment that your product is being referenced by name, that’s when you start having a brand, because what are they saying about you? That is your brand. I like to think of brand being what people say about you when you’re not in the room. And by you, I mean your product. Like you were saying earlier, SignWell, in some forums, in certain spaces, it’s, “Oh, it’s a really great alternative and it’s a fifth of the price.” Well, that’s part of the brand. And whether you controlled that and did it intentionally or not, that just becomes part of the brand. 

So with that preamble, what are your thoughts on when should you really, really, really start caring about brand?  

Ruben Gamez:
Yeah, this super interesting topic, I think a lot of it depends on how you interpret the question and how you even interpret brand, really. I would normally … in the way that a lot of people talk about brand and interpreting the question to mean, “When do you spend a significant amount of money, time, energy on things that are not meant to directly convert customers?” I would in the past, a lot of times just say, “When you have no idea on how to spend your money.” More of a hot take, when you don’t know what you’re doing.  

Rob Walling:
Zing.  

Ruben Gamez:
Yeah. I like the examples that you brought up with TinySeed and MicroConf and things like that. I think those are way more practical, and I would really ask you, because I think of these as very significant brands, the brands in the spaces in which they’re operating in, but you didn’t do this with VC funding or anything like that. So from a very practical point of view, how much time, energy, and money did you spend on activities that had to do with the brand versus other things that got you in front of audiences, got you customers or the people that you were intending to get?  

Rob Walling:
It’s an interesting question because since it’s not SaaS … If I was running a SaaS company, you are focused on generating leads, closing deals, marketing funnels, and this and that. So the majority of your time, for me, it was always product or marketing, sales. MicroConf is a brand because we have 724 episodes of this podcast. And if you say, “Oh, it only took me an hour per episode,” so that’s 724 hours over the last 10 years. It’s been a lot more than that. I think it’s like building the audience built the brand, and this is what I recommend people don’t do. If you’re going to build a SaaS company, don’t build an audience, build your network and build marketing channels, not a brand.  

Ruben Gamez:
In a very similar way, I’ve talked about it before as far as brand, you build the brand as you build the business, as you build your customer base, as you get your email list and all this stuff, your brand is built. But that’s a very different thing than what some people refer to or think about when they’re thinking about investing in the brand.  

Rob Walling:
Like hiring an expensive designer and redoing the positioning and the copy and-  

Ruben Gamez:
And spending a whole bunch of time on that sort of thing.  

Rob Walling:
… media company, “I’m going to start a YouTube channel and a podcast because that’s what brands do,” that type of stuff? That’s not a good use of your time in the early days, there’s no chance. So I like what you just said. You build the business and the business builds the brand, and that is exactly what happened with MicroConf and with Drip and, well, TinySeed was able to piggyback on my existing brands, but think about each of these. MicroConf, the entire focus … MicroConf was just a landing page. Take a step back. You said earlier, is it brand building or is it direct response in it, direct conversion? Those are the two types of marketing most people throw around. 

MicroConf started as a landing page. I have a screenshot of this black background. Dark mode before dark mode was a thing, because it was 14 years ago, and it had some headshots of Heaton Shaw and Noah Kagan and myself and Mike Tabor, and it was an email capture form. And it said, “Come to this play in Vegas on this date,” that’s all it was. It was direct response. And then we tried to sell tickets to that email list and tried to sell enough tickets that we could then afford to pay for the venue. There was no brand building and in fact there was no logo. The MicroConf was some font and we just typed “Microconf” on a thing. 

We sold tickets to the event first. To me, that’s building the business. We ran an event, we showed up, we executed, we operated. None of that was brand building. You know what built the brand the most? Was running a really (bleep) good event. And we got lucky with that. We didn’t know what we were doing, but we just put … You remember. You remember how stressed I was, and I was putting … I was like, “This has to be the best event I’ve ever attended.” So I was stressed about it and it turns out it was a really good event. And I think that alone, that created word of mouth and that created the brand of, “Oh, Microconf is a new thing and it’s different than anything else.” 

So what does that mean for SaaS founders? What does that mean for them?  

Ruben Gamez:
Yeah. Well, I think there are a couple of times when you start to invest more in things that are less related to directly building the business and directly converting customers and things like that. And you might spend in areas to where it’s thought of as brand building or enhancing the brand or whatever. If you’re in a really commoditized space and brand is how you get customers, that is it. Or as you get more and more established with the brand, you went back and you redesigned things and all … Right? Once-  

Rob Walling:
Oh, yeah. Like MicroConf, all that stuff. But that was when we were doing almost a million dollars in revenue through the business and had tens of thousands of people on an email list. And to your point, we built the business and then went back and designed a logo. The videographer every year would say, “Oh, can you send me your logo so I can put it in the videos?” And we were like, “We don’t have a logo.” It is weird in retrospect. I probably should have gotten a logo design before-  

Ruben Gamez:
A little bit earlier than that?  

Rob Walling:
Six years, seven years in. But to our point, you can build a business. We didn’t spend time building Drip’s brand. We didn’t spend time. We had a Derek who’s a full stack developer who designed the first logo, and I did hire a designer to put the colors together, but it was nothing … It was just, “Let’s make it look neat. Let’s make it look nice and attractive and make the UX great.” And my whole goal was to get people into it because I guess reinforcing once again that … What I found is the more customers we had, the wider our brand got by default. Because again, I define it as, “Hey, people talking about you when you’re not in the room.” That’s not the definitive version of brand, but it’s a big part of it, I think. And the more people who used it who said, “Oh, this is so much better than the other tools,” “Oh and it’s less expensive and it’s better? Whoa!” That became part of the brand. 

Is that how you think about it too with SignWell? Because obviously you have tens of thousands of users.  

Ruben Gamez:
Yes, that’s exactly how I think about it. Building the brand is just getting known in a space, and the amount of time that we put into the brand is not that much, really. It’s really mostly because there’s just so much room. If you’re in a space where you have a lot of room to grow still in the market, there’s so many other things that we could spend that time, money, and energy on than brand, still. And I think a lot of SaaS products are in that space. 

Even Josh, he’s got a significant business, he’s super sharp, he’s in a space to where he’s at a good level of revenue and growth and all that, but there’s probably still a lot of space ahead of them to go. So the thing that we do, it’s always about, how are we best going to use the resources that we have, the money, time and energy? And mostly for most companies, it just makes more sense to invest on growing the business and building the brand that way, I feel like.  

Rob Walling:
I would agree, especially with SaaS. I can make not even a counter argument, but an auxiliary to that, of, but if you’re building a conference or a creator-type business where you’re creating video and you’re more, “We really are information marketer,” and you are more of a Rob Walling or a MicroConf or a TinySeed, none of those are SaaS companies, I would say the brand can be important. I think it’s more important, probably, for those, because people have to know and trust you to buy in, but SaaS is a tool solving a problem. And yes, brand can have an impact on that, but as you said, where do you rank that in terms of priority? And usually it’s going to be pretty low for me until I really feel the need. I think people use it as an excuse to start a “media company,” because brand is fun. I like printing T-shirts with my logo and witty slogans, and I want to be … It’s fun, but that doesn’t move the needle.  

Ruben Gamez:
And it’s not measurable, it’s not a lot of times. So it’s easy for people to spend time there and effort and just be like, “Oh, I’m doing something, you can’t measure everything.” They tend to have this attitude of, “It’s all or nothing,” but it’s not really all or nothing. And just because you’re building the business doesn’t mean you’re completely ignoring the brand, right?  

Rob Walling:
Right. And that’s the thing. And I’m the person who, the moment I start a new thing, I print T-shirts with logos on them, but I will 100% say to anyone I’m talking to, “This is not the best use of this energy right now, but it’s a luxury that I have and a thing I want to do”. And to me it’s like eating ice cream, and I’m going to eat ice cream sometimes. It is not necessarily that … I should eat spinach all the time, but sometimes I’m going to eat ice cream. To me, some branding is really fun for me. And I do remember, I will say when we launched TinySeed, the first website, not … there was a landing page that I threw together in a couple of weeks, but the first website, I invested some money into it because I wanted it to be really, really sharp. I want it to look really good and feel very professional and right in line. 

Now is your visual identity your brand? No, but it is a component of that. It’s a component of how people view it. Anything I would launch these days, I would want to look really, really good. And again, it’s not identical with brand, but the brand of the SaaS Playbook, the yellow cover with that design, it stands out. So I don’t want people to listen to this thinking that you and I don’t care about brand or think brand is unimportant because we both know that it is, but it’s that caution of, “Don’t get too stuck in it. Don’t do it too early.” It’s not the best use of most entrepreneurs’ time. So thanks for that question, Josh. Hope it was helpful. 

Next question is from Lane at Boot.dev. He is wagslane on X/Twitter. He says, “Which parts of your sales and marketing funnels do you revisit most often, and on what frequencies? For example, only myself and one other team member work on marketing stuff and we can only get around to landing pages, drip campaigns, onboarding, sequence copy, et cetera, every so often.” How do you think about this?  

Ruben Gamez:
So I guess I think about it in a different way. If I’m thinking about growth, I don’t tend to think about, “Okay, what are the parts of my sales funnels and marketing funnels, and is it time to revisit those?” I think about it more in terms of, “What type of growth are we looking to get? What are the bottlenecks? Where are the opportunities for that growth?” and then focus in those areas. So that could mean that there are certain parts of funnel that we just don’t look at very often or almost ever, because they’re not the bottleneck, they’re working really well in other areas. Again, it’s really about efficiently using the limited time and money that we have. And usually that means just going after the biggest opportunities and focusing there.  

Rob Walling:
I think of it the same way you do. I remember I would launch … We’re going to launch SaaS app and I’m like, “I’m going to do some stuff manually and then I know I need at least an email sequence for onboarding and I need a landing page and some copy,” and I would just crank out in a day all of that stuff. And it was very much V0.9. It was not great, but it was 75% of what it needed to be, and we would launch with that. Then I would at some point make the time to circle back. I would either see conversions were really low or I would see a flag in my funnel where I’m like, “I’m off here, so what’s happening?” And I would go back and I’d reinvest in it. But then I remember leaving the onboarding sequence alone for a year or 18 months, the email onboarding, and I’m sure it could … needed an update. I’m sure it was crafty by the time I got back to it, but it wasn’t the most pressing thing. It wasn’t a bottleneck. 

And conversion from onboarding and trial to paid were also high for us, that I just didn’t circle back to it even though it wasn’t the best and it got outdated and all this. So I think you and I think about it the same way where I’m trying to do the most pressing thing and rather than it being, “Oh, in a perfect world every three months I would revisit all this stuff and I would optimize it.” I don’t know that that’s the best way to do it, or at least in the way I work on things. I’m always thinking, “What’s the biggest bottleneck? What’s the most broken or will provide the most results?” And sometimes that’s revamping an old thing and sometimes it’s doing a new thing. Often it feels like it’s doing a new thing if I think it can work.  

Ruben Gamez:
Yeah. Especially the earlier you are, and the more you have to increase numbers, usually it’s not about optimizing existing things, it’s about just getting more into the funnel and often that means doing new stuff.  

Rob Walling:
So thanks for that question, Lane. I feel pretty good about that answer. We’ll move on to the next question from Anders.  

Anders:
Hi, Rob. My name is Anders and I’m the co-founder of ShopLevers, a data analysis and aggregation tool for business coaches who work with auto repair shop owners. Until now, we’ve grown primarily through outbound efforts and word of mouth. We are looking to expand our offering beyond coaches and sell directly to shop owners. As that market is much larger, I’ve thought about basing the top of my funnel around SEO and content. I don’t have much experience in digital marketing and I found myself hesitant to get started. It seems like AI could be changing the playbook that has worked well for others. Am I overthinking this? Do you foresee a moment in the not too distant future where people abandon their search habits? Are you adjusting any of your own marketing strategies for this new reality? Thanks for all you do, listening to your podcast is a highlight of my week.  

Rob Walling:
So this is another question where I really wanted to get your take on it. How are you thinking about it? Because you are one of the founders in the world I know who knows the most about SEO and who also has a lot to lose if SEO goes away, because it’s such a big component of SignWell’s success. So how are you thinking about this?  

Ruben Gamez:
It’s funny, I don’t think we’ve ever really talked about it, so I’m interested to hear your take as well. So I think in the near term future, yeah, it’s worth doing. SEO takes time, so it’ll take a few months, but I don’t see this going away in a few months, so there’s no real danger there. 

I think there was something that I saw recently on Twitter, this founder of an SEO agency that … I think Will Reynolds is his name. And he talked about … he said something like, he won’t write content nowadays. He won’t write content. And I think this is a little extreme, but the thinking is interesting and I think it’s in the right direction in some cases as far as where to put your time and energy when it comes to SEO and how to think about the future. 

It’s going to have an impact, it already is starting to have an impact, but the way that he put it was, if AI can write it, he won’t write it, basically is what he said. Which is, if you think about that, there are already a lot of things that you could just type in, “Write me this,” into an AI and it can create an article that just … the feel might be a little bit like, “Oh, this is written by AI,” in some cases or whatever, but it’s essentially the same information. It’s very close to what a lot of people are already putting out there. 

So if that’s the majority of your content, or somebody else, Ian Howells as well, he does a lot of stuff in the SEO space, Traffic Think Tank, he’s one of the founders there. I like the way that he’s put it in the past and it’s just more of the same, which is, if you can just hire writers, like an agency, like a generic writer, an SEO writer, a writer to create and just list out a bunch of topics and then have them without knowing anything about your space or without knowing anything about your business, just create those articles, shoot them out really quick, then you don’t really have anything that’s defensible or really that valuable there. 

The more you can move away from just content like that and tools, that’s why engineering as marketing, you still have to promote it, you still have to build tools, but things that people are searching for that are not just basic, especially “How to this,” or whatever, more and more of that stuff’s going to be answered by AI. It doesn’t mean you shouldn’t do it initially, just know maybe you invest less time on that sort of stuff if there’s an opportunity there and you can rank and you can get traffic in the near future, but then devote more of your time towards other more unique content or tools or resources.  

Rob Walling:
Yeah. I like that advice a lot. And I agree with you. In the near term, AI is not going to kill SEO, but if we look out years, is it going to have a major impact? It’s obviously going to have an impact. 

There’s another potential impact of AI on SEO, and it’s the thought that Google, when you go type a search term into it now, above the fold is an AI answer. There are not 10 blue links anymore. It’s a big wall of text for most things, then it’s all you’re sponsored … your AdWords, and then it’s organic. And I wonder if Anders is not referencing that, of, what if all the 10 blue links, what if you went to Google homepage and you type in a search and all it is an AI answer? There are no 10 blue links anymore, they’re completely gone.  

Ruben Gamez:
I think for some terms, it’s already … there are few terms that are basically like that already.  

Rob Walling:
So what does that do, then? So how do you survive in that case if you’re so reliant on being one of those links that people click through? My impression was that, how does Google create the answers? Well, they do it by scanning the top 10 blue links, probably. They do the whole internet, but you get the idea, and they’re giving answers from that material, but then you don’t get the click through. So is it stealing clicks from your site that could potentially convert? What do you think about it?  

Ruben Gamez:
I think this has already been going on. Really, they’ve had that. It wasn’t AI, but they’ve basically given you the answers, and they had-  

Rob Walling:
The zero click box at the top, right?  

Ruben Gamez:
Right. So for some content, that game’s been over for a while, for certain types of content. More and more, there are just a higher percentage of zero click searches that have been happening. 

But there are other types of content where that’s not enough. Just going back to where you focus your time, and I’m going to focus more of my time on those types of things. And that’s if we’re talking about things that people are searching for. So you still have paid, you can do AdWords still, and they need to make money. So in the short term, at least in the next couple of years, I don’t think they’re going to just instantly … they need a replacement for that. In some way, shape or form, they’re making a ton of money off of a lot of companies and people, and what would they be as a business if they just got rid of that? They give that ability for people to get in front of searchers by paying.  

Rob Walling:
Right, 78% of Google’s revenue is AdWords. That’s the whole company, basically. To your point that they’ll … So you were saying that SEO is going to change, but people will still search for stuff. This is what I was saying the other day. They’ll still search, so there’s still ads. You know what else? People are also going to search … they’re either going to search on Reddit or get redirected to Reddit. They’re going to search on Quora if that’s even still a thing. I always mention it, but it’s less important these days. They’re going to search in whatever private Slack groups, so that’s where word of mouth is a little more important. They’re going to find stuff in Stack Overflow or Stack Exchange type sites. 

It’s spreading, it’s getting towards maybe not so concentrated in Google. I know that when I search a lot of stuff that I search, the top result are Reddit threads, especially when I’m looking for … if I’m not using AI and I’m looking for answers around any type of hobby thing that I do, like tabletop games, Dungeons & Dragons, playing the guitar and that kind of stuff, Reddit’s up there. And there are Reddit ads and there are … whatever, there’s a bunch of approaches. 

So I think that piggybacks maybe on what you’re saying in that SEO is going to change, but there are still … it’s not like it’s going to go away overnight and AdWords, specifically, is still going to be around for quite some time and that there are other options there for you.  

Ruben Gamez:
Yeah. And showing up in those places, finding a way to show up in all those places that you mentioned is a good approach. Even if you’re creating … a lot of people treat SEO as like, “I have to create all the content myself, and I have to rank that content.” But a lot of times you get really good results by showing up in content, in places, communities, forums, other articles, whatever, that you didn’t create. And I think the more you can do that, the more likely it is also that you’ll show up in some of the AI-written answers because they’re picking it up from more references they see. You’re obviously meaningful in some way, so you’re worth mentioning as well.  

Rob Walling:
Right. If I would’ve typed, “Best email marketing tool for realtors,” and there’s probably going to be a bunch of top 5, top 10, top 20 posts, or it’ll be a Reddit thread or a Quora thread of what’s the best. And it’s like, “Well, how do I get in those?” That’s exactly what I was going to say, was AI is scraping those and using them for answers. So if you go to ChatGPT or Google’s equivalent, is it Gemini? Is that what Google’s-  

Ruben Gamez:
Gemini, yep.  

Rob Walling:
… AI thing is? And Baird is someone else’s? I haven’t kept up-  

Ruben Gamez:
Plexity, just the other day I looked up and in the last 30 days, we’ve gotten … not a ton, it was 40 or something like that, unique visitors from Perplexity, which was interesting.  

Rob Walling:
So that’s it, it’s what we’re saying. It’s crawling those, and then if I go into ChatGPT or any of these tools and say, “What is the best email service provider for realtors?” that’s where they’re getting the info. So it’s changing, and that means for incumbents who are getting a lot of traffic from it, they might see their business slowly get squeezed out. And for upstarts, there’s probably opportunity here because it’s shifting. When you have this type of paradigm shift, this is when you can figure out, you can be at the bleeding edge of it, of, “Well, how do you get mentioned in all these AI answers?”  

Ruben Gamez:
Yeah. I think it’s also harder to make SEO, and this game has also been over for a little while, making it the only way in which you grow your business. Not just your primary, it should be thought of more as supplementary. So in the affiliate space, they’re freaking out right now because a lot of sites have been hit and are doing poorly because they don’t really have a business model. There are no products. So it’s funny in a way, they’re going about it almost in the reverse way. They’re like, “Okay, now we have these sites that are content, they’re getting traffic. We need a product on here so that Google likes it so that it’s not just a content site or whatever.” 

So they’re trying to come up with products, but in what we do inherently, we sell products, and we have content tools or resources or whatever that help us get traffic. So we already have that problem solved, but it speaks to just that thinking about, it’s more of a supplementary thing and it’s not a bad idea to diversify a little bit. Not a ton, because in reality it’s going to be one channel or two channels that are going to work really best for you, and you can’t spread yourself out too thin. But it does pay to invest some time and money into something else and experiment with other stuff.  

Rob Walling:
So thanks for that question, Anders. I hope our answer was helpful. Ruben Gamez, it is always the utmost of pleasure to have you here on the show. If folks want to keep up with you on X/Twitter, you are earthlingworks, and of course SignWell if they want to use the best electronic signature app on the internet. Thanks again for joining me, man.  

Ruben Gamez:
Thank you.  

Rob Walling:
Thanks again to Ruben for joining me on the show today. I hope you enjoyed this episode. If you have a beginner, an intermediate, or an advanced question for me or for a guest, send it in to questions@startupsfortherestofus.com, or click Ask a Question at the top of our website. Thank you for joining me this week and every week. This is Rob Walling signing off from episode 725.

Rob Walling:
And so when you plateau, you’re not going to know why you plateaued because you got lucky because you threw 10, 6-sided dice against a wall. One landed as a six, you picked that one up and said, “Well, this is my thing,” and you don’t know why it worked. And that is the biggest issue is if you don’t gain the experience and the skill to actually build the business and grind through the hard parts to get to the good parts, then you don’t necessarily have that knowledge on how to fix the things that break. 

Welcome back to Startups For the Rest of Us. I’m your host, Rob Walling, and this is the podcast that is shipped every week since 2010 for 720 something episodes focused on helping folks who want to bootstrap and mostly bootstrap amazing companies. 

If you’re listening to this podcast, you probably want to change your life or the life of those around you, but you are not hell-bent on begging venture capitalists for money and trying to make a dent in the universe or change the world, at least not with your first effort and the effort that you’re probably focused on, if you’re listening to this podcast. 

Do the lessons on this podcast apply to folks building SaaS companies? Absolutely, and that is the main focus. Do they also apply to folks building media companies, content companies, info product, course companies, frankly construction companies, all types of businesses? Yeah, a lot of them do and I have folks who I meet in person or who write in and let me know that they have no plans of ever launching a SaaS startup, and yet, they listen to this podcast to get learnings and the thought process from myself and other successful entrepreneurs. So if you are here, you belong here. Thanks for joining me. 

This week, I am diving into listener questions. I made a request on X/Twitter for more advanced questions, and so I don’t want to call these late stage questions because they’re certainly not all focused on seven or eight-figure businesses, but I wanted to get away from just answering a lot of questions about validation, and how do I find an idea, and how do I pick an idea, and how do I build an MVP, and those are fine questions, but when that’s all that’s coming in, it gets a little tiring and it’s less helpful for folks who are further along. 

I really do want this podcast and all the content that I put out to help folks who are in early stages, but also in the medium and late stages, seven and eight-figure companies and it’s easy to get pulled in the direction of focusing on early stage because that is the majority of the audience in any entrepreneurial audience, 80%, 90% of the people are early stage. It’s just the way the numbers work out, but I want to continue to have this podcast focus across the lifecycle of building your company. 

So today, I’m answering some more, I don’t know, intermediate questions, I don’t know, intermediate, late stage, whatever we want to call them, from a handful of folks who sent in audio, video and then a couple written questions, and I still have a backlog after this of another, I think, 25 more advanced questions. And so, I’m really excited to dig into those in the coming months. 

Before we get into questions, I wanted to let you know that MicroConf Europe is almost sold out. This year, MicroConf Europe is in lovely and amazing Dubrovnik, Croatia, it’s October 6th through the 8th, and our pricing for tickets goes up again on August 15th. So get your ticket today to save $200. And with that, let’s dive into my first question. As a reminder, audio and video questions go to the top of the stack.  

Speaker 2:
Hey Rob, big fan of the show and also the Slack community. My question is about managing managers. I run a software company in Germany and we’re around 25 people now and just hired the first two managers. One person in marketing that has three to four people under her and another leader running a product line with two people under her, and I am no newbie to managing ICs, but managing managers or leadership team is new to me. 

So what’s something that you focus on to A, not undermine their authority, but B, still be on the pulse of what’s going on because especially in marketing and in product, I, of course, don’t want to lose touch with what’s happening and want to make sure that results are still being achieved? Would love your insights and thanks a ton.  

Rob Walling:
I really like this question because we are often taught how to supervise, how to manage people. I even talk a little bit about it in the SaaS playbook. It’s not focused on that, but talking about how to manage managers is a whole other experience, and there’s a couple things that I have kept in mind during my career as I have done this because I did it both at full-time jobs and of course, I do it today where with MicroConf and TinySeed, I manage people who manage other people. 

And the couple things that I like to keep in mind are number one, try to find a couple good go-to resources, even simple things like what are the top two or three books you know about management and leadership? And if you have to ask on X/Twitter or if you know what you read coming up that really set you straight and provided a lot of value and education for you, have those as easy references, A, when you hire someone or B, if you promote someone to start managing people, so that you can give them those resources and you may need to consume them again and talk them through the thought process. So that’s number one. 

Number two is I try to model how I manage and communicate that to my managers. We tend to hire nice people who get along with others. I tell them the hardest part you’re going to experience as a manager is you really have to give negative feedback at a certain point or constructive feedback, however we want to talk about it, and now is the hardest thing for a lot of folks that I know. It’s easy to tell everyone they’re doing a good job. It’s easy to post the confetti emoji in Slack and thank everybody for their hard work. It’s hard to give someone pointed constructive feedback and not feel bad about it. 

Some people do this really well, some people are jerks and do it all the time, and those are the folks you probably tend to not hire, right? They take it too far. They “tell it like it is,” which usually means they’re an asshole, but folks who are nice and get along and view harmony as a positive thing and they want to get it done and they love working with their teammates, can often find it hard to give negative feedback. 

So that is one thing that I try to really address early on about you are going to want to get into the habit of giving constructive feedback because if you don’t, it’ll come as this huge surprise six months down the line. If you have five direct reports and you just never do it and then all of a sudden you do, it’s a big deal, but look at it as something that your team members, your direct reports really want. You’re actually helping them improve. 

That’s the thing that I started learning about myself was that that’s how I learned to couch it in my own head of I’m helping someone improve by telling them, “Hey, I think you could do better on this,” or “Hey, I think we messed up on this. How can we do better next time?” Usually, the best people, already know they messed up on things and you barely need to tell them, but that’s the second thing that I think about. 

The third thing that I think about is I do implement some light key performance indicators, KPIs. I hate the acronym stuff and the rocks and that I’m just not a big process person, but I do find it helpful to define pretty concretely some numbers that should move in a direction and sometimes this is as lame as NPS. Other times, you can just make up your own satisfaction score. How satisfied are X users? Oftentimes, it’s if they’re in charge of marketing, how many leads are coming through, how fast is growth. If they’re in charge of sales, how many deals are closing, their, customer success, how low is churn? 

There’s some other things you can add in there, customer support, how fast are we responding and what are the ratings, do we have high ratings of our responses. So getting something in place that’s pretty concrete so that your managers know what they’re managing too can be helpful and it doesn’t have to be super complicated. 

You can have one, two, three numbers that you agree with, that you collaborate with to decide which are the priorities for the business, and having that means you can talk about those week to week, month to month, and you may need to change them. What you may do is set two or three key performance indicators that you want to go up into [inaudible 00:08:38] and realize, “You know what, these aren’t quite right and we need to adjust them.” 

But the last thing that I’ll touch on is I do what’s called skip level meetings, and this is where you do maybe a quarterly meeting with the folks who report to your managers to have a conversation, ask them how it’s going, try to suss out, “Hey, is everything good? How are you feeling about things? How is it working with so-and-so?” You may not be able to ask them directly, but you’re just trying to get a sense of how things are going. 

And I often will ask about what do you want to do next? Where are you headed in terms of self-improvement, professional development? What things excite you about this job? What things do you like the least? What do you want to get better at? What do you want to do next year that you aren’t doing now? What will make you better? And I will ask them, “Have you talked to your manager about this?” I won’t say your manager. I’ll name him by name, but obviously, I would say, “Have you talked to Tracy about this at TinySeed?” 

And if they haven’t, then I will make it a point. I’ll either say, “Well, do you feel comfortable talking to her about it,” or “I will have a conversation with Tracy and let’s make sure we get you what you need. So it’s obviously more to be said on this topic, but that hopefully gives you a few recommendations for how I would approach it. My next question comes from Sean about attending conferences without overselling.  

Sean Matthews:
Hey, Sean Matthews from Left Hook here. We currently work as a services company trying to bootstrap our way into a software product. We also have built a open source framework to help develop and deliver user-facing B2B software integrations, so that would be anything you find inside your integrations page. We’ve built a framework that helps build those quickly and has all the infrastructure in place, so leverages a lot of the best of breeded or new packages and concepts architecturally out there. 

Long story short, our target market, our ideal customer profile are typically partner leaders, product people, sometimes the developers that are being asked to go build those things, CEOs, C-suite, oftentimes startup, but sometimes all the way up to enterprise SaaS. We find ourselves often going to events and thinking about attending events where we, as our own aspiring B2B SaaS founders, attend and actually be part of the conference because we have questions about how do you set up your marketing and what’s the right pricing strategy, et cetera. 

At the same time, we are around a target rich environment. Everyone is potential customer for us. Aside from, and we’ve done this before is sponsoring, so we’ve sponsored some conferences and that kind of fits fairly nicely, but when we’re not sponsoring, if we go to MicroConf, how do we approach people and just show up while actually being able to sell to them and not feel like we’re selling? 

And that’s maybe a question of just be yourself, but figured I would ask that because you probably get people that lurk around conferences that really they’re just there to sell as opposed to be a part of the conference. So just curious as your thoughts on that.  

Rob Walling:
Thanks for that question, Sean. I appreciate it. Yeah, so with MicroConf, some folks attend MicroConf where their audience or their customer, their ICP, ideal customer profile, are the attendees, and usually, it’s pretty obvious the ones that are selling and overselling and they’re annoying. People don’t like them, people avoid them, they pretty quickly find themselves not in the good graces of most of the people there. 

I think that if you are mindful of this, it’s easy not to oversell. Does that make sense? It’s easy to just be cool, just be cool. Like Samuel Jackson said in Pulp Fiction, “Just hang out.” Wow, quite the reference there, but the idea is people are going to ask you what you do, what company you’re with. You’re going to say, “Oh, I’m with Left Hook and we build software that helps B2B software integrations,” and see if they ask more. They might say, “I don’t have any interest,” and they change the subject or they might say, “Oh, so are you like Zapier?” And you’re like, “Well no, we allow you,” da-da-da-da. 

It’s a question and you play the conversation, but you don’t go around pitching. You don’t hand people business cards for crying out loud, not at a MicroConf especially, unless I ask for it, right? But the idea is you’re just having a conversation with another founder and you’re a founder and that’s it, and at a certain point, if they show enough interest, you might ask, “Hey, do you want something,” whatever it is. Do you want to try out the software? You have interest in it. You can ask them, but don’t make it high pressure, because it’s not a sales demo that they opted into. 

The other thing to think about, obviously sponsoring is a great one because if you’re sponsoring, you have a little sponsor tag on your badge, then of course, people are coming up to you because they know what you do and they want to hear that. So it’s kind of an open door for you to communicate that and for you to talk about what you’re doing. 

The other thing to think about is to apply for attendee talks or lightning talks. A lot of conferences have the opportunity that if you’re already an attendee with a ticket, you can name a topic that you want to talk about that gets you up on stage like at a MicroConf, say it’s 10 or 12 minutes and you don’t want to sell your product, but you might say things we’ve learned integrating with 100 different APIs. And then you say, “I’m the founder of this and this is what we’ve learned and [inaudible 00:14:02] if you’re interested in what we’re doing, it’s very light on sales and very heavy on actionable tactical advice. 

If you do come to MicroConf for another conference and you are not a sponsor and you start selling pretty heavily, it will get back to the organizers and they will remember your name because we have had folks do that. So I think you’re asking yourself the right question here, how do I do this well. 

The other thing is to gauge. If you go to SaaStr, everyone’s there to sell their stuff to everyone else. It just is. Everyone’s trying to put deals together, everyone’s trying to put meetings together. That is kind of the point of SaaStr. A lot of people ignore the content because trying to sell. If you go to MicroConf, it’s not like that. 

And so, you also want to know the audience and know the type of event that it is, and if you don’t know, ask a prior attendee and ask them what the vibe is or you can frankly ask on X/Twitter, I’m really going to struggle to call it X because when I say X, I know that you kind of know what I mean, but it’s tough. So thanks for that question, Sean. Hope it was helpful. 

My next question comes from the post I made on X and Bankster Life asks, “There are a lot of SaaS companies stuck in the 20 to 30 KMRR range. How do you break out or is it not possible due to market size?” So here’s the thing, I don’t necessarily disagree with there are a lot of SaaS companies stuck in the 20 to 30K market size. I know. I don’t disagree with that, but it’s not as if that’s some magical place where a bunch of SaaS plateaus. 

If you look at the State of Independent SaaS report, which stateofindiesaas.com, you can download the 2024 report. It just came out a couple of weeks ago. You’ll see we asked what’s your MRR? We surveyed almost 700 B2B SaaS companies. And you’ll see, if you imagine on the left-hand side, it’s like one KMRR and on the right-hand side, it’s, I don’t know, more than 5 million or more than 10 million or whatever, and the left-hand side is the tallest and it’s almost, it’s just a curve down and to the right. 

It’s just the way these funnels work. It’s the 80/20 rule. It’s like a sales funnel. If you think about, well, 100 people come to my website and 80 people stay longer than five seconds and 50 people click this button and get to the pricing page, it just decreases and decrease. It’s the same thing with MRR. The fact that a bunch of people churn at 20 to 30K is like, “Yeah, but a bunch of people churn at 1K as well and 5K and 10K, and it’s just fewer and fewer make it further and further.” 

So I want to kind of dispel the notion that there’s some magical 20 to 30K plateau point that is any more magical than any of the other revenue markers, but what I will say is I was going to write a talk about plateaus and it turns out, it just wasn’t going to be a very good talk, but I have this, it’s not even an outline, it’s just a list. I’ve tried to think of every possible reason that a SaaS company would plateau and I came up with 10 of them, okay? 

So there’s three that are weak product market fit. I don’t like to say pre-product market fit, that implies you suddenly cross this finish line and you have product market fit, but let’s say early or weak product market fit and there’s three of them. Cause number one is churn is too high because you haven’t built something people want. Cause number two is churn is decent so far, but you’re not driving enough traffic. Cause number three is you’ve built a one-time use product rather than building something people want to subscribe to, which is not a recurring product. 

And then, there are seven when you have stronger product market fit later plateaus. So there are reasons like number one, top of funnel is too small. Cause number two, subpar funnel conversion rates. Cause number three, your churn is too high. Cause number four, a competitor starts eating your lunch, whether on the product or on the marketing front. Cause number five, you’ve tapped out the market, et cetera, et cetera. 

So you get the idea that you can’t just ask, how do I break through a plateau if you don’t know why you’re in that plateau and someday, obviously, I’m going to put these in something, I don’t know if I’ll do a podcast episode about all of them and talk them through or if I’ll put them in a talk or what have you, but that’s not really the point of this. 

The idea is, like Bankster Life said in the tweet, how do you work out or is it not possible due to market size? Well, it just depends on your market. If you built an ESP and the market is tens of billions of dollars for sure, it might be larger than that, then no, it’s not due to market size, but if you have targeted an incredibly small niche, then yeah, that’s the reason. And then, you have to decide, do I expand into other verticals? Do I build a second product? That’s the thing, the thinking. 

This is why general advice when you ask on Twitter, someone will say, “I plateaued and people are telling me that you need to do this or that.” It’s like, well, if they don’t understand or you don’t understand why you’ve plateaued, then how are you going to fix it? And this is my biggest issue, I think, with the whole launch one thing a month and see what sticks because you are not going to know why you’re growing. 

And so, when you plateau, you’re not going to know why you plateaued because you kind of got lucky because you threw 10, six-sided dice against a wall, one landed as a six, you picked that one up and said, “Well, this is my thing,” and you don’t know why it worked, and that is the biggest issue is if you don’t gain the experience and the skill to actually build the business and grind through the hard parts to get to the good parts, then you don’t necessarily have that knowledge on how to fix the things that break. 

So thanks for that question, Bankster. I hope my answer was helpful. I know it wasn’t a direct, I mean, it wasn’t a direct answer. The answer is it depends, but hopefully, I’ve given you the full framework of what it depends on or at least a taste of the full list, which again, at some point, I will publish in some form or fashion. It’s just not there yet. It’s not publication ready. Trust me. 

I know someone’s going to email me and ask me for it, and it’s just a bunch of bullets and then it’s like how to fix it and it’s things like the causes, you don’t have enough top of funnel traffic and it says how to fix, drive more traffic. It’s not. It’s not a tactic of how to do it, it’s just the obvious answer to these things. So I’m just not sure how helpful it actually is in the form that it currently is. 

My next question is from Adam Denver Co is the username, but it’s Adam Wright on X, “What happens when you’re building a SaaS machine, which is what you want, but it becomes an agency or a more hands-on business?” And so, I responded to Adam and said, “Is your question exactly as you’ve asked it or is it more of a question of how do you not let it become that?” And he responded, “It’s more of a whoops, this happened. What now? I started a job board, jschimp.com, but it’s turning into a hands-on recruiting agency for immediate money. How do I balance the lucrative agency work with my original self-serve vision?” 

I think for me the answer is if you really don’t want to do the consulting, just don’t do it in the first place or if you’re doing it now and you don’t want to do it, just stop. The downside of that is, oh no, I have this very lucrative agency work that is actually funding the self-serve vision. 

Then, you need to balance the two, and this is the classic agency trying to turn into a SaaS conundrum and frankly, most agencies don’t make that pivot, because they are so addicted to the amazing money to the 150, $250 an hour that they can bill versus how do I justify building this thing that’s doing a few hundred dollars a month and may never make more than a few hundred dollars a month? It’s risk versus reward, right? 

You have to think about it as asymmetric upside. If JS Chimp actually succeeds wildly, what is the upside of that versus continuing to do the agency work? I think funding your SaaS, or in this case, it’s a job board, with agency work or freelance work is a great way to do it. I mean, I did that. I did it on the side where Craig Hewitt had a productized service. We have seen some folks do it, but the adjustment to productizing or to getting the product built, can be a difficult one. 

The way I think about it is either do the lucrative agency work 40 hours a week and then focus on the job board nights and weekends, a self-serve aspect, or set aside one day a week where you do not, or two days or three days, whatever makes sense, set aside a certain amount of time where you absolutely do not let agency work interfere. Maybe that’s two hours a day, maybe it’s one day a week, but be super disciplined about it. 

The other thing you can do is depending on what has to happen to push JS Chimp forward, can you hire that out to someone who is less expensive than you with the money you get from the lucrative agency work? I used to do this where I was billing 100 to $150 an hour as a software engineer. 

I was a freelancer contractor and I was billing 40 to 50 hours a week doing that, so I was banking the extra money that I could because we didn’t need all that to live on, and then, I would hire folks at the time, it was in the Philippines, sometimes in India, but these days, depending on your time zone, you can, I don’t necessarily want to recommend those countries at this point, but the idea is that you can hire someone, whether it’s a developer, whether it’s a marketer, whether it’s a whatever needs to get done and do this geo arbitrage, you’ve been hearing about this for years, so then you’re kind of managing one or two individuals to get stuff done and push it forward while you do the more lucrative work. 

It’s a hard road and most aren’t able to make the shift, and I do think, I mean, I hate to say it’s a lack of discipline, but I kind of think that’s what it is. It’s that you have this thing that is just so much a bird in the hand and it’s hard. It takes real fortitude to not just do more and more and more of that and look, maybe you should just do more and more and more of that. It’s really making you a ton of money and maybe the long-term, self-serve vision isn’t worth it if you can make boatloads of money and hire a team and build a small agency to do the recruiting. 

We’ve seen remote first recruiting do an amazing job and build incredible seven-figure business on that, and they still have the job board, but I don’t think they regret building the agency around that job board. So I appreciate this question, Adam. I hope my thoughts were helpful. 

My last question for today is from podcast guest and longtime listener and MicroConf speaker Christopher Gimmer. He’s @cgimmer on Twitter. Give him a follow, “While you are running Drip, I’m curious as to how you structured team meetings and whether you followed any sort of management framework like Traction or EOS,” and he doesn’t say it here, but there’s scaling up, which I think is for later stage folks, “Specifically, I’d love to hear what things looked like when it was just you, Derrick, and a handful of employees versus how you ran things at the point Drip was acquired?” 

This is a good question and what I will say is I lead and manage a certain way and other folks have different opinions. If you go back and listen to old episodes of Craig Hewitt and Andy Baldacci’s podcast called Seeking Scale, you’ll hear a lot of talk about frameworks and management, and that’s probably if you want to go down that road, I would start there. Craig is very knowledgeable about this stuff. 

I am not. I know a bit about it. I know the basics, the rocks and the KPIs and this and that, and that’s about all I use. I’m a pretty light framework or light process person in general, and that includes, that extends to when I’m managing people and managing a team. So I did not use any sort of management framework and really have never done that aside from having numbers that we’re shooting for these. 

Again, I’ll say KPIs, because everyone knows what that means. It just kind of pains me, but it’s just goals for certain things. It’s like I want MRR to go up by this. We need this many leads to do it. This many, we should have a sales conversion rate to demo to close of X, Y, Z percent or above. And so, team meetings were a lot of me leading them and saying, “This is where we’re going. How does everyone feel about it? What are the status updates? What’s working and what’s not? Here are the new things we’re going to try. Here’s a new person we’re going to hire and what’s breaking where so we can figure out how to not let it break?” 

After we got acquired, we expanded pretty significantly. So the Drip team itself, by the time I left, was 125 people. I was no longer CEO though. I wasn’t running all of that. I was running maybe it was about 20 people between engineering and product that were under me and it was two teams plus products. It was kind of like three different teams. We had two different engineering teams for infrastructure and more like app features and stuff, and then, product folks. 

I still ran those without rigorous frameworks, although product meetings, once I hired a product manager, he used some, I don’t know, it wasn’t Traction or EOS because it wasn’t about rocks, but there were definitely prioritization frameworks that he brought into it as a more academic and experienced product person, but for better or worse, I do tend to go about this stuff pretty intuitively. 

I have found that some folks who lean so far into the frameworks do so to their detriment, that the frameworks are a bit like having exact detailed instructions on how to cook a hamburger or a steak that don’t always take into account all the details or all the nuances of cooking a hamburger or a steak, and I feel like if you have some natural inclination of how to borrow just some really minor pieces of Traction, EOS, Scaling Up whatever you want to borrow, but that it fits with your personality to manage in a more intuitive way, I guess what I’ll say is it works for me. 

It worked at Drip, it was 10. It worked once I was managing 20 and it works at TinySeed MicroConf today. No one could argue that I don’t manage a huge org. I wasn’t running or I don’t run an org that’s say 125 people where I have managers who manage managers, who manage individual contributors. And so, maybe at that point I would need more of a framework. 

I do know that the CEO who took over, so Clay Collins was CEO when they bought us, and then, another CEO who’s very much more kind of an MBA spreadsheet thinker, and I don’t mean that in a detrimental way. He’s a great operator. He had frameworks, but they were not Traction or EOS. It was kind of his stuff. He learned it in business school and he had seen it in other SaaS companies he’d been involved in and the venture capitalist kind of lean on stuff. 

So he had his own just self homebrew framework that I think works well for him. It’s a certain style of pushing things forward. It’s a very operational focused versus I tend to be more creative and product focus, so less operational, but all that said, I think there’s a lot of different approaches that can work, and I think as long as you’re not strapped to the dogma, and you don’t get hung up too much on the details of a framework, and be really careful about taking one of these frameworks and just implementing it too early. 

I like to have the absolute minimum amount of process as long as possible until we need more process, and then I don’t go from 1 to 10, I go from 1 to 2, add a little bit more just sprinkle a little bit on, and then you sprinkle a little bit on as things start to break or as you’re like, “Yeah, we do need more process.” Things are getting complicated, communications, breaking down and we’re not getting stuff done. People don’t know what they should be doing. 

Then, I’m ratcheted up from two to two and a half, two to three. You get the idea? That is my personality, that’s how I work, and it works for me, and I think the idea is it’s best for you to know yourself and develop your skills that lean into your personal giftings. And so, if frameworks, and I’ll say just more left brain thinking about it works for you, then think about how can I adapt this framework to the size of my team because again, I don’t think EOS is great at five people. 

I think there’s too much process and I don’t know exactly the number where it’s a perfect fit, but I personally would be concerned. I would really strip it down and I guess these days, I kind of do run an extremely stripped down version of one of these. It’s basically just, “Here are the goals. Let’s go. Let’s update and work great as a team.” And there’s a bit more to it than that, but you get the idea. I feel like I’ve covered this point. I really do appreciate your question on this, Christopher. I hope that was helpful. 

If you have a question for this show, I’m going to be moving even text questions as you heard in this episode, that are a bit more advanced, intermediate to advanced. Later stage text questions are going to go to the top of the stack along with audio and video questions. I hope you enjoy this focus of thinking more about what do folks who are already managing managers think about and other topics that’ll be more applicable to that stage. Thanks for joining me this week and every week. This is Rob Walling, signing off from episode 724.

Rob Walling:
Welcome back to Startups For The Rest of Us. I’m your host, Rob Walling, and this week I speak with Pulitzer Prize winning journalist, Charles Duhigg. Charles writes for the New York Times and New Yorker magazine and has written three books including The Power of Habit, Smarter Faster Better, and most recently, Super Communicators. I wanted to have Charles on the show not to cover material from the book per se, but to figure out how to translate that into why being a better communicator should matter to you as a bootstrapper. Whether you’re having conversations at your day job, while you’re doing your side hustle, whether you’re doing sales demos, whether you are talking to folks that you have hired, contractors or full-time employees, or even communicating with your spouse or significant other as you try to navigate the frothy waters of building your company. Charles is extremely well-spoken and has a deep, deep understanding of this topic, so it was a pleasure to have him on the show. Let’s dive into our conversation. 

Charles Duhigg, thanks for joining me on the show.  

Charles Duhigg:
Thanks for having me on.  

Rob Walling:
It’s great to find to meet you. We were talking offline and I realized I’ve read at least two, maybe three of your books, but I hadn’t put together … Sometimes you just don’t put together that the author has written all these books. So Power of Habit, a lot of folks have probably heard of, as well as Smarter Faster Better, and most recently Super Communicators, and that’s what we’re here to talk about today. How to unlock the secret language of connection. And I know there’s a lot of listeners probably listening to this thinking, “You know what? I’m a software developer. I’m going to go indie hack my way and build a solo empire.” But you always need to know how to communicate with people, and that’s why I wanted to have you on the show today.  

Charles Duhigg:
Yes. Even if you are building a solo empire, you probably have a spouse or a significant other at home, and if you’re not communicating well with them, it does not matter how big your solo empire becomes. Communication is at the heart of what humans do, and it’s critical.  

Rob Walling:
Yep. And I used to be a not great communicator, and I’ve had to develop that over the past 10 or 15 years. I grew up left brain, introvert, developer, and so I would almost gravitate towards roles where it’s like, well, I just don’t need to communicate with people. Again, I’m going to be that solo person just doing my thing. And I’ve learned that the better I’ve got at communication … Partially through doing this podcast, to be honest. You talk for 720 episodes, you get a little better at it. But also dealing with the hard things of life, starting companies. As you said, working with my spouse on those. I think to get us started, there are super communicators, which the book is about, which are folks that are much, much better at communicating than what normies, we might call Muggles, as they call them in Harry Potter. But just define the term for us to set the stage.  

Charles Duhigg:
Sure. Absolutely. And it’s worth noting that all of us are super communicators at one time or another. So here’s a great way of demonstrating it. If you were having a bad day and you came home after this long day and you’re feeling lousy and you’re like, “You know what, I’m going to call someone I know calling this person will make me feel better.” Do you know who you would call? Does that person pop into your mind?  

Rob Walling:
Yep.  

Charles Duhigg:
Who is that?  

Rob Walling:
It’s a friend of mine named Brendan.  

Charles Duhigg:
Okay, Brendan. So for you, Brendan is a super communicator and you’re probably a super communicator back to him. And I’m guessing … And tell me if I’m getting this wrong, I’m guessing that one of the reasons why you love talking to Brendan is he knows what questions to ask you, and he proves to you that he’s listening and he shares things about himself. He doesn’t try and steal the spotlight, but he’ll share things about himself. And so it just feels really good to talk to him. So there are some people who can do this with anyone. There are some people who can be consistent super communicators. And the reason why is because they’ve recognized the skills that Brendan brings to his conversation with you and the skills that you almost unconsciously use in talking to Brendan, those are fungible skills. Those are skills that you can use with anyone once you recognize it’s a skill. It’s just like learning how to read. If you learn to read on nonfiction, that doesn’t mean you can’t read fiction or you can’t read a cookbook. It’s a completely fungible skill. Communication we’ve discovered is exactly the same, and so anyone can become a super communicator. It’s just a matter of understanding that there’s this handful of skills that you need to recognize the skills, and once you do, you can practice them until they become habits and use them with anyone.  

Rob Walling:
Got it. Well, let’s dive right in then. What are the skills? If someone’s thinking to themselves, I want to be able to communicate better, have hard conversations. And maybe it’s having hard conversations about firing someone. Maybe it’s having hard conversations about saying, “Hey, you’re not cutting it. I want to try to train you up, but I have to give you hard feedback.” Right?  

Charles Duhigg:
Totally.  

Rob Walling:
You can be an employee and have these conversations. You can be in your own company and have employees, but how do you get better at being a communicator?  

Charles Duhigg:
Yeah. There’s a handful of them. The first one is to understand what kind of conversation you’re having. This book really started when I fell into this bad pattern with my wife, which literally anyone in a relationship will recognize, which is I would come home from work after a long day, I’d start complaining about my day, and my wife very reasonably would suggest some practical solutions. She’d be like, “Oh, you should just take your boss out to lunch and you guys will get to know each other a little bit better.” And instead of being able to hear what she was saying, I would get even more upset. And I’d be like, “Why aren’t you supporting me? You’re supposed to be on my side. You’re supposed to be outraged on my behalf.” She would get upset because I was attacking her for giving me good advice. 

And so I went to these researchers and I was like, “What’s going on here? I’m a professional communicator. Why do I, and everyone I know fall into this pattern?” And they were like, “Well, actually, we’re living through a golden age of understanding communication because of advances in neuroimaging and data collection. We really know what’s happening inside people’s brains for the first time.” And they said, “One of the things that we’ve learned is that when you have a discussion, you assume that discussion is about one thing. You’re talking about your day or you’re talking about your kid’s grades, or where to go on vacation. But actually every discussion is made up of different kinds of conversations.” And in general, these conversations, they tend to fall into one of three buckets. There’s practical conversations where we’re solving problems together or we’re making plans, but then there’s also emotional conversations where I might tell you what I’m feeling and I don’t want you to solve my feelings, I want you to empathize. 

And then there’s social conversations, which is about how we relate to each other and to society. And they said, “What we’ve learned is if you’re having different kinds of conversations at the same moment, it’s really hard to hear each other. It’s really hard to connect.” Which is of course what was happening with me. I was coming home and having an emotional conversation. My wife was responding with a practical conversation, and as a result, we really couldn’t hear each other. And so the first thing that super communicators do really well is they just take a step back and they just asked themselves what kind of conversation does it seem like we’re having right now? Are we having an emotional conversation, a practical conversation, a social conversation? And there’s ways to flush that out and help you figure out what kind of conversation you’re having. But once they know, then they lean into it. They try and match the other person or invite them to match themselves. And within psychology, that’s known as the matching principle, that successful communication requires having the same kind of conversation at the same moment.  

Rob Walling:
As you’re saying this, I know a super communicator. It’s my wife, Dr. Sherry Walling. Folks who listens to the podcast will know. A, she’s a psychologist, so she’s trained, but B, she has empathy, and also she’s now a professional. She’s a CEO and founder coach. She’s an entrepreneur herself and just deals with a lot of entrepreneurs. Anyone who’s talked to her, who’s listening to this knows that she picks up on where you are and then goes with it. So that’s fascinating. I think that’s helpful for listeners who are listening right now, think of the person … There’s got to be someone in your life who is just amazing at this. And what is it? Is it that they pick up on the speaker, the other person where they are and meets them there? Do they also sometimes transition? You said there are three types but-  

Charles Duhigg:
Yeah. Absolutely. Absolutely. It’s both of it. So let’s talk about how we figure out what kind of conversation we’re having. One thing we know about consistent super communicators is that they ask more questions than the average person. They ask 10 to 20 times as many questions as the average person. And some of those questions are very special questions that are known as deep questions. And a deep question is something that asks me about my values or my beliefs or my experiences. And that can sound intimidating. It sounds like that’s a big question, but it’s actually as simple as if you meet someone and you’re like, “What do you do for a living?”, and they say, “I’m a doctor.”, it’s natural to say like, “Oh, where do you practice medicine?” But a better question, a deep question is to say like, “Oh, what made you decide to go to medical school?” Because when I’m asking that question, what I’m really asking you is tell me about who you are. Tell me about your experiences, your values, the things that shaped you. 

And it’s an invitation. It’s not a mandate, it’s an invitation. But what tends to happen is that when you ask a deep question, when you ask someone how they feel about their life, instead of the facts of their life, they tend to tell you what kind of mindset they’re in. So the same person, that doctor, depending on the situation, depending on how they’re feeling that day, they may answer that question one of two ways. They might say something like, “Oh, I wanted a steady job, and I knew that medicine would always be a steady job.” Okay. They’re in a practical mindset right now. But that same person, if they’re feeling more vulnerable, they might say something like, “When I was a kid, I saw my dad get sick, and I saw the doctors and the nurses help him, and I wanted to be one of those people.” That person’s in a much more emotional mindset. 

And so once I know what kind of mindset you’re in, then I can match you. And I can say, “Oh, it’s so interesting you mentioned that. I’m a lawyer and I became a lawyer because I saw my uncle get arrested when I was a kid.” And I can also invite you to match me. For instance, when I come home and I’m talking to my wife and she listens to me complain and she emotes with me, at some point she can say, “I understand how you’re feeling. Do you want to talk about solutions? Because I think that there’s a way to solve this problem.” So what super communicators do is they ask deep questions to try and figure out what kind of conversation is happening, and then they match the other person and invite them to match themselves. And that can sound hard, but it’s actually very, very easy and very natural and graceful because our brain makes asking deep questions and matching into a habit very quickly.  

Rob Walling:
You’re so on point, and it reminds me of … I don’t know if you’ve seen it on Instagram, but there’s a text where a guy’s girlfriend texts him and says, “I just bought an ice cream cone, and the scoop fell off onto the sidewalk.” And he says, “Are we in a feeling and empathy mode, or would you like to hear solutions?” Total tone-deaf, but it totally links into what you’re saying, right?  

Charles Duhigg:
And yet what’s interesting is from the outside that seems totally tone-deaf, but when I come home and I’m having a bad day and my wife says to me, “Okay. Do you want to talk about solutions or do you just need to complain and get this off your chest?”, I actually really appreciate it. Because I’m like, “No, no, no. This isn’t a big deal. I just want to vent for a couple of minutes.” So asking maybe over a text is not the best way of doing it. There might be a little slightly more graceful way. But when you’re in that conversation, it actually feels good to have someone ask you, “What can I do to help you? What are you looking for in this conversation?” That’s not something that feels ungraceful, that feels actually very welcoming.  

Rob Walling:
Do you have any advice on how to transition from one type of conversation to another? And I want to give you a specific examples, so let’s say that I’m in a weekly or monthly one-on-one with someone who reports to me. And there’s often … Well, early, there’s chitchat, and then we get in like, “How are you doing?” There’s the emotional like, “How are things going over the past month? Is there anything we need to address in terms of your happiness here at the company?” And at a certain point, maybe you do need to transition that to being more practical, maybe giving feedback or whatever. But how does one do that elegantly?  

Charles Duhigg:
Honestly, the best way to do it … And there’s two things to do here. Let’s talk about a conflict situation and a non-conflict situation. In a non-conflict situation, if you’re like, “How are you doing here?”, and they’re saying, “Oh, I’m frustrated with this one thing, and my wife thinks I’m not home enough.” Listen. Say, “I’ve had that similar experience myself.” And at some point you can literally just say, “Look, we’ve been talking about how we feel. Is it okay if I propose a solution to you, if I make a suggestion?” What you’re really saying is, can I move this conversation from an emotional conversation to a practical conversation? Now, the fact that you’re asking permission to do it, almost inevitably the other person says yes, but it also feels like instead of you mandating that they have to have a different kind of conversation, you’re inviting them to match you in return. So that’s very elegant, it’s very graceful. It doesn’t feel weird. 

But let’s talk about a conflict situation where it’s hard to do that. So in a conflict situation, what’s really important is that we prove that we’re listening to the other person. And by conflict situation, I mean even if we just disagree about something. We’re talking about something where we just see things a little bit differently. So maybe it’s not a fight, maybe it’s not that hard a conversation, but it’s something where there’s a little bit of a difference. It’s really important to prove that we’re listening. And there’s actually a technique for doing this that they teach at Harvard and Stanford and all these other fancy schools that’s known as looping for understanding. And the reason it’s important to prove that we’re listening is because in many conversations in the back of our mind, we suspect that the other person is not listening, they’re just waiting their turn to speak. 

So that situation you described before where they’re complaining and you want to get a practical, if you just jump in with a practical, it seems to the other person, they’re like, “Oh, he basically sat there while I complained but now we’re talking about the thing he wants to talk about.” But if we prove that we’re listening, we overcome that suspicion that the other person’s just waiting their turn to speak. And what looping for understanding does is it has these three steps. Step one is ask a question, preferably a deep question. Step two is after the person has answered the question, repeat back what they said to you in your own words. And the key here is not mimicry. It’s to prove to them you’re paying attention. And more importantly, to prove to them that you’re processing what they’re saying. 

And then step three, and this is the one we usually forget, ask if you got it right. Because one of two things will happen. The first thing is they’ll say like, “No, I don’t think you understood what I was saying.” Which is really useful to know. The second thing is that they’ll say, “Yeah, I think you understood what I was saying.” And what we actually did in that moment is we asked them for permission to acknowledge that we were listening. And when they acknowledge that we were listening, they become more likely to listen to us in return. So when you’re in that conversation and you’re trying to transition to something, or when you’re in a tough conversation and you’re trying to move it from criticism to solution finding, if you prove to the other person that you’re listening to them, they become much, much more willing to match you, to join you in having a more productive conversation.  

Rob Walling:
Got it. You were saying that was more of a conflict approach, so that could be applied with a spouse, significant other, that could be applied at work. Yeah.  

Charles Duhigg:
Yeah. When we go in and we give someone some performance feedback that’s not overwhelmingly positive, when we have a partner and we disagree about how to move forward and we have to come to a consensus, if we prove to each other that we’re listening as our first and primary goal, that conversation is going to go much, much better.  

Rob Walling:
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I want to switch it up a little bit because we’ve been talking about close relationships, people you work with, significant others, life partners and such. There’s another element to communication, and I want to give you another scenario. So we host an event called MicroConf. We host it twice a year where a bunch of entrepreneurs, a couple of hundred entrepreneurs get together. And one of the most valuable parts of the event is what we call the hallway track, which is not the main track, it’s where you go out in the hallway and you’re talking to other entrepreneurs. So there’s a lot of introverted folks who want to connect with other founders, and they maybe are not sure, how do I do this well? How do I not ask the same three questions? How do I not stay on the surface? How do I make connections with those who I want to connect with? Do you have any advice for those folks?  

Charles Duhigg:
Yeah. Absolutely. There’s been a lot of experiments on this. And it’s interesting because I think the people who are introverts, they think that they’re at a disadvantage to being a super communicator, and it’s actually not true at all. In fact, one of the things that we know is it doesn’t matter if you’re an introvert or extrovert. Because these are skills, really, they’re skills that can be learned by anyone. Moreover, what we know is that people who are real super communicators consistently, if you ask them, were you always good at communication, they often say no. They say things like, “I had trouble making friends in high school, and so I really had to study how kids talk to each other.” Or, “My parents got divorced and I had to be the peacemaker between them.” And it’s the act of thinking about communication that makes someone a super communicator. 

This is what super communicators do, is they think a little bit more about just what’s going on here. So here’s the thing that I would say. There was this experiment that was done at Harvard Business School where they brought a bunch of students into a room and they said, “Look, you’re about to have a conversation with a stranger.” Telling someone you have to have a conversation with a stranger is one of the most anxiety producing things you can do for anyone. And they said, “But before you have this conversation, here’s what we want you to do. Take out a piece of paper. Just write down three topics or questions you might want to talk about. Stupid stuff like are you going to the party this weekend? I just saw Dune two and I thought it was terrible. What do you think about it? Just write down three things.” 

And so they did. They stuck them in their pocket, then they went and they had the conversations. And afterwards they asked everyone how’d those conversations go? And the participant said, “Interestingly, the three things I wrote down, they never came up, but I felt so much more confident and calm during that conversation. I felt like I could really focus on the other person so much better because I knew that if there was going to be that awkward silence, I knew what I was going to say. I knew what I had in my back pocket.” And for introverts in particular, but this is true for everyone, the thing that makes conversations hard is not the conversation itself, it’s our anxiety about the conversation. We’re thinking like, “I’m going to go into this hallway. I’m going to have to talk to five people I’ve never talked to before. It’s going to be exhausting. There’s going to be weird, awkward silences.” And so when we can remove that anxiety, it allows us to tap into our natural communication and listening and speaking instincts much more easily. So simply just writing down three things that you might want to talk about, that can change things entirely. And what’s important to realize is that the reason why this is so powerful is because communication is Homo sapiens superpower. It’s the reason our species has been so successful. 

So as a result, our brains have evolved to be really, really good at communication. Like an introvert’s brain and an extrovert’s brain, and someone who’s somewhere on the spectrum, their brain, all of our brains are really good at communication. And oftentimes what we need to do is we need to allow our brains to do what they’re good at. And when we’re anxious or when we’re uptight, or when we’re like, okay, my goal is I have 30 seconds with this person and I want to impress them how smart I am, that’s when we get in the way of our instincts. But the more we allow ourselves to just do what feels natural, the better those conversations are going to go.  

Rob Walling:
It reminds me of the first time you give a talk in front of a bunch of people and you know the material pat. You know it forwards and backwards, and then you get up in front and you freeze, and the blood rushes to your head and the hair stands up on the back of your neck, and you become just a … presenter. And you watch it back later and it’s like, ah, it wasn’t as bad as I thought, but it’s the anxiety. It’s not your ability to communicate because when you gave it to yourself in the bathroom mirror with no anxiety, it was a great … presentation. But when you get up in front of people …  

Charles Duhigg:
And in the 30th time you give that speech when you’re bored by it, so you have zero anxiety because you’re like, I know exactly what I’m doing. When all of a sudden on the stage you start doing these flourishes and these little charismatic things. It’s because you’re not thinking about giving the speech. You’re just giving the speech. And that frees your brain up to let all those instincts come out to be like, oh, here’s a fun joke. It’s never occurred to me before, but I’ll just try this joke out. And that’s why it’s so important that these are skills. Is because our brains are designed that when we identify these skills and we practice them, our brain makes them into habits very, very quickly. And once they’re habits, we don’t have to think about them. We get to just relax and let the habit take over.  

Rob Walling:
I mentioned to you offline that I listened to your book last week as I was driving around Iceland, and it was super enjoyable to hear about it. One thing that struck me … And I don’t know that you phrased it in this way, but I was thinking, man, I can get really good at unquote small talk based on some things you said in the book, even beyond the example we just used at a conference. But if you’re a salesperson, usually you want to build rapport in the first two to three minutes as you’re doing a sales demo. I interview hundreds of startup founders every year or two to get into the accelerator. There’s just a lot of times when I find a meeting someone new for the first time, I have a 20-minute call, I need to get rapport very quickly. And usually small talk is just garbage. It’s like, “Oh, where are you from? What’s the weather?” This and that. But you had examples of, here’s a question that most people ask, here’s how to ask it in a way that is much more effective. Can you talk us through that?  

Charles Duhigg:
Absolutely. Absolutely. So in the book, there’s all these stories. There’s the story of a CIA officer who asked to recruit an overseas agent that’s just terrible at it, or the Big Bang Theory. Why the writers of the Big Bang Theory were able to make it work. And at the core of a lot of those is just a reframing of what’s going on in a conversation. So let’s say it’s small talk. Let’s say you meet someone you’re trying … You don’t know anything about them. You’re trying to get to know them. And you say like, “Oh, what part of town do you live in?” And they say, “I live in the Heights.” That’s a dead end. But if your next question is, “Oh man, the Heights, that’s really interesting. What do you like about it up there? Why did you guys decide to move up there?” That’s a deep question. And what that person is going to say is they’re going to say something like, “Oh, my kids’ schools are near there and so we just wanted to be close to it. And there’s also this great community. We used to live in the valley and we didn’t know any of our neighbors, and now we live up in the Heights and we know all of our neighbors.” 

So at that moment, what you can do is you can reciprocate and you can say … Because what you just told me is you told me you have family, community is important to you. You’ve been in this town for a little while, long enough to at least live in two different places. I’ve learned so much about you just by asking, “What do you like about the Heights?” And at that point, I can reciprocate and I can say, “Oh, it’s so interesting. I have two kids also, and actually, we live over in a different part of town in Midtown. But it’s similarly, the reason I love it is because we just know our neighborhood and it’s such a diverse neighborhood. There’s all these people from different socioeconomic backgrounds. It’s just really interesting.” Now we’re actually communicating with each other. Now we’re actually bonding a little bit. And that doesn’t mean we’re going to be best friends, but it definitely means that we are making a connection. We feel like we know something about each other. And all it took to do that was just to ask you a question about how you feel about something and then to reciprocate what I’m hearing.  

Rob Walling:
And is that something that you yourself do if you go to a dinner party?  

Charles Duhigg:
Oh, I do it all the time.  

Rob Walling:
Yeah.  

Charles Duhigg:
Oh, yeah. Yeah. I do it literally all the time. I mean, there’s this guy named Nick Epley at the University of Chicago. He plays this game where he’ll get on a bus, and his goal within three questions of sitting down next to a stranger is to get them talking about their hopes and dreams. And he says usually it takes two questions because he’ll sit down next to someone and he’ll be like, “Hey, what do you do for a living?” And they’re like, “I’m an accountant.” And he is like, “Oh, did you always want to be an accountant? Was that your dream when you were a kid?” And they’re like, “No, of course not. Who has a dream to be an accountant as a kid? No, I wanted to be an astronaut.” And then they’re off to the races. They’re talking about their dreams when they were young. I do it all the time. Again, once you practice it once or twice, it becomes a habit and it’s so easy. It’s so easy to connect with other people simply by just asking them what seems like a fairly benign question.  

Rob Walling:
Yeah. And that’s fascinating because it’s, when I first read the summary of Super Communicators before I listened to the book, I thought it was going to be about … I don’t know if you’ve read the book Crucial Conversations.  

Charles Duhigg:
Yeah.  

Rob Walling:
It’s about having hard conversations or being able to communicate complex things or whatever. But it really runs the gamut because you and I, just in this 20-minute conversation, have talked about small talk, we’ve talked about dealing with a significant other spouse, a life partner. We’ve talked about dealing with direct reports. We’ve talked about being at a conference, which I guess is small talk, but it’s different. The super communicator moniker that you’re talking about and that you describe in the book really does cover the gamut of person-to-person interactions.  

Charles Duhigg:
Oh, absolutely. And if you think about it, what do we consistently spend most of our time doing? We all eat once or twice a day or three times a day or more. We all sleep every single night. But if you were to actually log most of the minutes, you spend certainly in the top three, if not, the top one would be communicating with other people. It’s like asking your kids, how are you doing, you’re getting to school today, ordering a coffee, talking to the barista to give her your order, calling the person you’re working on some project with. Communication is at the core of what we do. And so you’re exactly right. Being a super communicator, it’s not about hard conversations, it’s about all conversations.  

Rob Walling:
And that actually brings me to an interesting question, and you may have addressed this in the book. I definitely was daydreaming a bit, staring at the volcanoes in the mountains as I was driving through Iceland. So something that occurred to me is a lot of my communication is via email and DM and Slack. It’s not verbal. You and I on this, again, in the last 20 minutes, we talked a lot about verbal. Does it change? Is it different when you’re typing?  

Charles Duhigg:
The same principles apply, but the important thing is to recognize that each form of communication has slightly different rules. So one of my favorite examples of this, just to put it in context, is about a hundred years ago when telephones were first becoming popular, there were all these articles that appeared that said no one will ever have a real conversation over telephone. Because think about it, up to that moment, all conversations that happened basically face-to-face. And they said, “Look, if you can’t see the other person, you’re not going to be able to understand what they’re feeling. You’re going to miss all their facial expressions, their gestures.” What’s interesting is that at the time, they were exactly right. So if you listen to early phone conversations or transcripts of early phone conversations, what you see is that people basically use them as telegrams. They would call up and give someone a grocery list or a stock order, but they didn’t know how to have a back-and-forth. 

Now, by the time you and I were in middle school, we could talk for seven hours a night on the phone, and they were the most meaningful conversations of our lives, and that’s because we learned the rules for talking on phones. One of the rules … And you still live by it, I live by it. We all do it subconscious without even realizing it. When we’re talking to someone on the phone and we can’t see them, we over enunciate our words by about 15 or 20%. We put about a third more emotion into our voice because we know the other person can’t see our facial expressions. We do that without even thinking about it. Now, the thing is that there are slightly different rules for phone conversations than face-to-face conversations. The same thing is true of DMS and texting and sending a messages with emojis and sending an email versus having a Zoom call. 

When we get into trouble is when we forget the rules. Or it’s not even like we forget the rules, we just don’t pay attention to them. So I know that if I’m going to send you something hard, if I can do it over voice, that’d be great, and if I can’t, it’s definitely better to do it over email than it is over text. That’s not a huge discovery. But when we’re moving really fast and we’re just thinking about ourselves and we’re just thinking about getting the information across, we forget to remind ourselves what are the rules of texting versus DMs versus something else? That’s when we suddenly send that text that the other person reads, and they get pissed off because they took it out of context. So the only real difference … All the same principles apply, the difference is that there are slightly different rules and slightly different strengths or weaknesses for each channel of communication and we have to remind ourselves of that.  

Rob Walling:
And if folks want to dig in deeper, they can buy Super Communicators wherever greater books are sold. Amazon. I got mine on Audible, of course. And folks who want to keep up with you. They can head to charlescuhigg.com. That’s D-U-H-I-G-G. Or you’re also C. Duhigg on Twitter/X. Charles, thanks so much for joining me today.  

Charles Duhigg:
Thank you for having me. This has been so much fun.  

Rob Walling:
Thanks again to Charles for joining me on Startups for the Rest of us. Hope you enjoyed this episode. Obviously a little different than some episodes of this podcast, but I like to broaden my own horizons, as you can tell, from … I think I’m at 904 audiobooks in my Audible account, and sometimes I like to share topics that may not be in the direct focused wheelhouse that you might experience week to week on this show. But know that if you come back to this podcast again next week, it will continue to have content, information, insights, and hopefully inspiration to motivate you to continue building your company. My mission is to multiply the world’s population of independent self-sustaining startups, and that’s why I record this podcast each week. That’s why it focuses on building incredible businesses that may not change the world, but they can change your life and the life of those around you. Thanks so much for joining me this week and every week. This is Rob Walling signing off from episode 723.

Rob Walling:
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It is another episode of Startups For the Rest of Us. I am your host, Rob Walling, and today I talk with James Mooring, the co-founder of Astalty. James and his co-founder have a pretty incredible story of bootstrapping a vertical SaaS app to seven figures in ARR in 18 months. A lot of things went right for them, but it’s obvious that James and his co-founder are very smart and executed exceptionally well. I know that sometimes it’s helpful to hear founder stories of people failing, making mistakes, picking themselves back up, and sometimes it’s inspiring and you can learn a lot from the tactics, the strategies, and the approaches that someone used to achieve relatively fast success and quick growth. As James and his co-founder have done, they’ve built an enviable business by all measures. One thing I like about this conversation is it’s not just the headline of how they bootstrapped the seven-figure business in 18 months, but James is very thoughtful about how they did it. 

Sometimes when you talk to folks, they don’t really know how they did it. They lucked into it and they claim it was all word-of-mouth and virality. These things that it’s like, “Well, A, that’s not helpful to me if I want to grow a business and, B, I don’t actually think that’s what happened.” With James, he’s given it a lot of thought. I think directionally, he’s pretty correct with why they were successful, which is even more helpful for you listening to this podcast because, now, you can potentially take some of the learnings from his journey and apply them to yours. With that, let’s dive into my conversation. 

James, welcome to Startups For the Rest of Us.  

James Mooring:
Perfect. Good morning. Thanks for having me.  

Rob Walling:
It’s nice to have you on, sir. So your company is Astalty and your H1 is, “Simplify your NDIS business operations. Ready to take your NDIS business to the next level? Try Astalty, the most straightforward NDIS software with the most advanced features.” 

What is NDIS? I’ve never heard of this. Literally, I had to Google it before this. So if someone does not live in Australia, describe what NDIS is and then what your software does.  

James Mooring:
I think some people that do live in Australia still probably don’t know. The NDIS is the National Disability Insurance Scheme, so it’s essentially a government-funded scheme that provides funding to people that have a disability to go and access supports from service providers for a range of different things. It could be accessing the community, it could be accommodation, it could be assistance at home with self-care, things like that. Our software provides a platform for businesses that provide those supports to those people with a disability to run their business.  

Rob Walling:
Got it. Let’s say Gymdesk is a TinySeed company and their software is like the operating system for a gym. Your entire business runs on it, people check in and out with a key fob to get in the thing and it tracks that they’re there and it does invoicing and billing and subscriptions. Just imagine everything that a gym or a [foreign language 00:03:50] or a yoga studio, a fitness studio needs. So it’s kind of the OS, the operating system of that? Jim, is that what Astalty does for these, they’re not affiliates, NDIS providers?  

James Mooring:
NDIS providers, yeah, NDIS service providers. Yeah. The term CRM is very common here for what we do, but essentially how you’ve described it is exactly what it does. Most businesses will subscribe to Astalty, an accounting software like Xero or similar and then they’ll have their Microsoft or Google to power their email, and ideally that’d be all they need.  

Rob Walling:
And talk to me about where the business stands today.  

James Mooring:
So now, we’re a team of five. We’re doing seven-figures ARR and still growing significantly every month, so it’s in a really good spot.  

Rob Walling:
And this has happened very quickly. It probably doesn’t feel that way. I know your timeline… Timeline always feels really long, but when I actually read through it, because you were very generous to send me the entire timeline which is what we’re going to work off for here, it seems like from actual paid launch until seven-figure ARR was less than two years.  

James Mooring:
I think, around 18 months, we worked it out to be.  

Rob Walling:
Unbelievable. That is so fast.  

James Mooring:
From when we launched our first paid offering to when we hit the seven figures.  

Rob Walling:
Unbelievable. So one thing before we dive in, because… Here’s what I want to cover for someone listening to this, it’s to figure out how you got here this quickly and then to pull out things that you and your co-founder did really well where you were smart and then potentially where there were things where maybe you got lucky, as you and I saw in Atlanta, because you were at MicroConf Atlanta, which is how we met, where potentially… As Ben Chestnut said, they Forrest Gumped their way in. They kind of stumbled. They got a little lucky, and that’s okay too. It’s not 100% luck. It’s that, along the way, sometimes you do things and they turn out really well. Before we dive into that though, Astalty, you told me, stands for a solution that actually listens to you. Is it a dad joke? It’s like it’s not a good acronym. What’s the deal with it?  

James Mooring:
I think when we came up with it, we had much, much worse business ideas. And a lot of businesses in the space had care or health or these types of words in their business name, and we didn’t want to be that. The whole premise behind Astalty was that we felt that software was built by people that have no idea about the actual business problems that they were solving. At the time, we thought, “Why not try an acronym?” and this kind of came out and then it stuck. We don’t put that acronym everywhere, but it’s a very sticky business name and people remember it, but it does actually drive a lot of our, I guess, culture around how we invest time with our customers and build features, I suppose.  

Rob Walling:
And astalty.com.au, if folks want to check out your website. 

You touched on something right there that I want to dig a little deeper into. You talked about how in… Well, let me just say this. In deep verticals, where there’s a lot of subject matter expertise required to build a good tool, we see one of two mistakes usually. We see a software developer who comes into it and doesn’t actually understand the business problems. So then they build, it can be good software, but it doesn’t do the business any justice. It doesn’t actually solve the problem. Or, vice versa… We see subject matter experts who are like, “I’m in roofing construction and I’m going to hire a developer,” but they’re not a product person. So they have the subject matter expertise of what it should do, but the product sucks. 

You and your co-founder are a developer and a subject matter expert, and that combination is in the top three co-founder combos that we see, right? I’ve invested 191 to companies and the top three, in no particular order, it’s kind of all tied for one in my head, is a developer plus a marketer or a developer plus a salesperson, depending on if it’s a hired low touch funnel, and developer plus subject matter experts, as long as that subject matter expert is willing to do the sales or the marketing. So you and your co-founder… You’re the developer, right? And your co-founder was in the NDIS system. Does he have a consultancy or a software company in there?  

James Mooring:
He has an NDIS service provider business. So, he actually is one of… His business uses our software and we’d been talking about the NDIS for early days. My job was to try and decode what he was saying and think, “How can we solve these processes using software?” And I think that kind of unique position is part of the reason why we built such a good product.  

Rob Walling:
Yeah, that makes sense. In a space like this, you would need… I don’t know that you would need a co-founder. It sure help, but you would really want what we call a patient zero, a customer zero who really is on board with being able to advise you, or you’d need an advisor or an advisory board, two or three people, who all had NDIS. You could have done it different ways, but this to me is one of the ideal ways because then he has so much skin in the game, right?  

James Mooring:
Yeah.  

Rob Walling:
And if he was willing to help with sales and marketing as well, something that… If we rolled the calendar back three years to… We’re recording this in June of ’24. We roll back to June of ’21, you talked about development work on Astalty starting slowly and that you were going to try to do everything that a CRM in the space had to do, but then you realized that you would probably do that quite poorly. So, you instead streamlined to just focusing on support coordination. This is, I think, a lesson that a lot of developers screw up is they don’t want to build an MVP with limited functionality or they don’t want to focus the thing down thinking they didn’t solve a big enough problem. So, I guess it sounds like that was the right choice for you. And how did you come to that? How’d you come to that conclusion?  

James Mooring:
Yeah, absolutely. So I think Jona, my co-founder, when he was explaining everything, I was thinking, “This is fine. We can do this.” And then we started and we’re like, “We need this thing, and that means we need this thing.” And then the waterfall just got so big. And then we wanted to get to market quickly. So what we did is we really said, “Well, where’s the gap?” and we focused on that. And then I’m really glad we did it back then because if we came to that realization 12 months later, it would’ve been an absolute mess. It’s kind of funny because through that process of really focusing on a niche, within a niche, you could say, “We actually built 90% of the functionality that we need to serve the whole NDIS space.” It’s just that there’s one kind of scheduling piece, and that’s what we’re working on building now. So it was just interesting that by niching down, we were still able to build functionality that would help us serve the customers that we wanted to serve initially, if that makes sense.  

Rob Walling:
It does. It does. So your co-founder, you and he are talking through NDIS and he’s probably saying, “There’s no good software on the market.” He’s saying, “There’s a huge gap.” What was his company using before you built Astalty?  

James Mooring:
They were using another software that they actually still use because it does the functionality that Astalty doesn’t quite do. So, they use both at the moment. Yeah, there was just no innovation in the space that we felt, so we came out and surprised… You put a really nice easy-to-use interface on something, you speak the language that your customers speak and you make the product easy to use, which sounds so simple, right? But it’s funny how far that could actually go.  

Rob Walling:
How many NDIS providers are there in Australia?  

James Mooring:
I think probably a few, a couple hundred thousand. Yeah, there’s heaps, and they range from sole traders… They could be sole traders up to the top 10, which might have a few thousand employees. There’s a really wide range of sizes of businesses.  

Rob Walling:
That’s a big market to not have a really well-built tool. When I think of any market in the US that has a couple hundred thousand businesses that would be willing to pay, there are a lot of tools available for them. Many of which are decent, some of which are reviled. But I’m kind of surprised by that. Why do you think that that vertical… There are probably listeners right now, salivating, thinking, “Oh, my gosh, I wish I could…” Only two years ago, there was a market this big that didn’t have software. Why is that the case? Why has no one attacked this?  

James Mooring:
I think there’s certainly a software that exists, but it was built 10 years ago, 6 years ago. They got into the space and they probably solved the problem that existed six years ago and thought, “Great. We’ve solved it.” I mean, this is my opinion anyway. And then I think they said, “Great. We’ve solved it. Let’s just stay here,” and that’s fine. But at the pace that the technology moves, at the pace that NDIS itself moves, you need to be able to iterate fast and change and listen and pivot, and I think that is another huge factor to our success. So there’s certainly a software that existed, but just not up to speed, I suppose.  

Rob Walling:
So as you’re building the… You start in June of ’21 writing the code. Six, seven months later, you’re in January 2022 and you launch a free Chrome extension, which… You talk about NDIS has a price guide and the Chrome extension allows you to search the price guide in real time, I guess, in Chrome.  

James Mooring:
Yeah.  

Rob Walling:
My question for this one… I have a note next to it, and it says, “Smart or lucky,” because a lot of engineers want to do engineering as marketing because we are builders. If I can write code instead of marketing or if I can write code as marketing, I’m going to do that, right? So what I wonder is if… Were you pretty calculated about this? Like, “Yeah, I’m all in. I’m in on this. It’s a lead gen. I’m going to build this thing. It’s going to do it,” and you were confident? Or was it kind of like, “Well, might as well throw this thing together. Maybe it’ll work, maybe it won’t.”  

James Mooring:
It came about because Jona and I were actually… Because we had to have some of this price guide functionality in Astalty to kind of get your business set up. I think we were looking at the price guide and we were like, “Man, this sucks. I can’t believe we have to search through this.” And then somehow, we got onto the concept of extensions, and I’ve never built one. I thought, “I wonder how hard it would be just to throw this in the browser,” because we use quite a few extensions and they’re just so handy. 

And then, I guess, we were calculated in the sense that we could use it as a lead gen, get our name out there. We were calculated in that way. Did we think it would have the uptake that it did? No. But when we built it and when other people started using it, everyone was thinking, “Why doesn’t this exist already?” So we were kind of first doing that and then we’ve seen a couple of others come along. But yeah, I would say maybe a combination of, “We know what we wanted to do. Did we know exactly what the pathway would be?” Probably, not. No.  

Rob Walling:
Right, so a combination, a lot of things. And then the next month, February ’22, you launched Astalty Lite, which, as you said, is a free-to-use CRM that would hopefully get customers engaged and on the platform. By August of that year, you had 450 users to the free platform and you specifically said, and I like this data point, “Of those, a few dozen were engaging us and providing feedback about the platform,” because that usually what happens. You get hundreds or thousands of free users and there’s 2%, 3% that are likely to upgrade. So similar with this one, you kind of went freemium or free… I guess the first question is, is that still a free plan on Astalty? Or is that just kind of a preview, so you do still have a free plan?  

James Mooring:
We do. It’s not very utilized because it doesn’t have your invoicing, which is such a core time saver that Astalty gives you. We do still have it.  

Rob Walling:
Similar with that, were you smart there to be like, “Oh, if we get this, we get the buzz and we get people in it”? Or did you kind of get lucky because, I’ll just say, most free offerings don’t work. Most people don’t know how to do it and they kind of backfire and you devalue your product and then you have a bunch of… on and on and on. But it seems like it worked… I guess the question is, did it work for you and was it intentional or was a little lucky in that one?  

James Mooring:
Astalty Lite was very calculated, absolutely. So when we were building, we were thinking… I think, by that time, we were thinking we would have our paid offering out, and that just didn’t happen. I think by the time we got to Astalty Lite being launched, we wanted to have our paid offering out and we wanted to get to the market early and we thought, “The best way to do that is to give people the functionality because we also needed feedback from our potential customers.” So it was a way to provide value, which was good for our engagement, getting a brand awareness, and also good to get people using the product. Did we know that people would actually use it? Probably, not. But even though it wasn’t, I guess, validation, which is something that I didn’t even know at the time or we didn’t know at the time, the fact that people were actually engaging and giving us feedback even though they weren’t buying, for us, was a very good signal that people are enjoying what we’re building. Some of those customers now pay us every month, so it’s great.  

Rob Walling:
What would the signal have been? Let’s say barely anyone signed up for Astalty Lite, because I almost view it as a nice MVP or a validation signal where you were kind of still like, “Well, are people using it?” And when they are, you’re like, “Oh, this raises my motivation,” because that’s what you need as a bootstrap founder is motivation, right? You’re not running out of money, but you’re like, “Ah, should I keep building this?” or, “Is this the right thing?” or whatever. So, it sounds like it was pretty motivating. What would you have done if 10 people signed up and no one used it? Would it have been bail on the idea, “This isn’t going to work”?  

James Mooring:
No, absolutely not. And this is a pretty important point, I guess, for me because I put my whole other software development company on hold and we were going to make Astalty work, period. There was no second option. So if that didn’t work, we would’ve pivoted, we would’ve reached out to people, we would’ve done whatever it took to make that work. I think in your book or on a podcast, you talk about roadblocks versus speed bumps, and this is something that we try and really put into practice that we would’ve just changed. We would’ve pivoted, got more feedback, changed the product, and go from there.  

Rob Walling:
So, that was February of ’22. So then, in August, you essentially launched a paid plan, Astalty Pro, Astalty Professional, 50 bucks a month per user, and you gave a discount at launch. 50 bucks a month per user, that’s decent pricing. Again, a lot of startups when they launch, I’m like, “Oh, they’re 10% of the price. They should be 10x below or 5x below. But at 50 per seat, I’m imagining… You said there are teams of thousands literally. But even if a team of 10, right? You’re talking $500 average revenue per account on that. Did you look at competition? How did you come to that price? Because it seems like you’re pretty smart on it.  

James Mooring:
Lots and lots of hours. People think building software is hard. Pricing is the hardest part of-  

Rob Walling:
Tell me about it.  

James Mooring:
It was extremely, extremely difficult. And I think we did the discount because we thought, “Oh, well, if we launch at a 30% discount and 49 is too expensive, then at least we can kind of revert down to that 30% off.” We did look at some of our competitors and we were cheaper than some and more expensive than some. I guess what was really interesting is the fact that we stayed at 49 and we probably tripled the number, the functionality that you could do through the platform. And our customers, I guess, had that trust in us that we were going to deliver on what we said that we were going to deliver. We got it right, I think, in the end. But yeah, it was lots and lots of time on the phone talking about it.  

Rob Walling:
Obviously, I’ve been thinking about your business for approximately 25 minutes or something. I don’t know it that well, but it feels directionally correct of like, “50 bucks a seat, that’s a pretty good price.” To get a full picture, obviously I’d want to look at all your competition and… There’s a bunch of other stuff, but it certainly doesn’t seem too terribly low. I guess it started paying off, right? Because by December of that year, you launched in August, you’re five months, six months later, is that even… or four or five months later, you’re at almost 9,000 MRR, which is a kind of a Cinderella story, right? I mean, how many people are listening to this podcast thinking, “I’ve been working on this… I’ve been launched for two or three years and I’m not at 9K MRR.” 

Aside from getting the things right that you got that we’ve already covered, was there something else? Are you a good marketer? Is your co-founder doing a lot of marketing? How is there so much interest and fast growth? I mean, you got a couple hundred paying users in that five months. What was the key there?  

James Mooring:
I think the biggest key is that the product was so good, and that’s a combination of Jona, my co-founder, having such a good understanding of the NDIS and being able to translate that into software and the fact that the businesses that use our software essentially charge $100 an hour for their service. So, we only had to save our customers half an hour a month per user to see the value. And our invoicing alone was saving businesses, in some cases, two whole days, a fortnight. So it becomes very easy, I think, for our customers to justify the cost. 

In the early days, we just did everything. We were both doing the demos, we were getting on calls with the smallest users. If it was a five, we would literally be building features to get customers in that it was missing. So, we were just doing everything we had to do to get these customers on board. Like I said, my business partner have such a good understanding of the NDIS. I think we were able to leverage his network and his knowledge of what people are really looking for.  

Rob Walling:
Got it. Yeah, you’ll hear me say is, if you listen to the podcast, “Build your network, not your audience.” So, it sounds like he… You guys didn’t have an audience of NDIS folks, but he did have a network of folks who would be willing to try it to give feedback to potentially spread the word.  

James Mooring:
Yeah, exactly. If you can go to a business and say, “Hey, pay us 50 bucks a month for a sole trader,” for example, “and we’ll save you 10 hours a month,” it’s kind of hard to say no to.  

Rob Walling:
That raises the question, do you feel like you might be underpriced? Could you charge $100 a seat or 150? What is the place where that breaks? Usually, it’s if there’s a replacement, it’s they can either do it with a clipboard, Excel spreadsheet, or there’s other software where they’re just like, “Forget it, I’m not… Even though this is the best tool, there’s an alternative that is good enough.”  

James Mooring:
The pricing scales well for all sizes of businesses we feel. So, we didn’t want to make our pricing complicated, “You have one user, you’d pay this. You have five users, you pay that.” I just wanted the billing to be super straightforward. So I feel like our price point, maybe we could charge more for smaller businesses. But then if you have say 20 users or 30 users, it does start to get quite expensive each month. So we charge the same for all sizes of businesses at the moment, and we’re comfortable with that. Could we charge more? Maybe, but I guess you don’t know until you actually try it, right?  

Rob Walling:
So you end 2022 at just under 9K, you end 2023 at almost 60K MRR, so the story continues. Did anything change? Did you do anything differently during ’23 to get to that? I mean, you’re 6x, you’re approaching a million already. Was it more the same? Or was there anything during that year that just lit a fire under the growth?  

James Mooring:
I think because we had such good word-of-mouth, our reach was kind of exponential. The more users we had, the more people that were talking about our product, the more people that would see that. So, it was kind of like a self-fulfilling hamster wheel in the sense that we just got more people really enjoying using the product and they would tell two people and then they would tell two people each. So that kind of grew, our user base, quite quickly. 

We also did some offers, three months free, we did a Black Friday sale, so that stuff sort of drove our growth. And we always ask ourselves, “Would they have joined even if we didn’t do those offers?” I’m not sure. It doesn’t really matter now. Funnily enough, we only made our first hire in October of that year. I think more people were just talking about the product and, of course, we were adding more and more functionality that we needed as well. So, we were kind of growing the market that we could sell to.  

Rob Walling:
And this is something I want to call out to someone listening. This is the reason that, at the beginning of this year when I made predictions for 2024, I said vertical SaaS and, later added, orthogonal SaaS, which is like role-based or title-based, will continue to be incredible places for bootstrappers. We’ve kind of been seeing that over the past few years but even more, and there’s reasons for this and you’ve pretty much enumerated all of them. One is that word-of-mouth in small verticals is like wildfire, way more than… The examples I always bring about horizontal SaaS are like SignWell and SavvyCal, right? Word-of-mouth can be fine, but it’s not wildfire in those spaces, versus Gymdesk and Astalty where it travels real quick. 

The other thing is the folks in these verticals hang out in the same spaces. They’re in the Slack groups, they’re in the Facebook groups, they’re at the same in-person events. If they have a trade publication, a magazine or something, it goes to 50,000 to 100,000 people. It’s very small in the scheme of things. It’s not so big. In addition, marketing in these spaces usually is either not that expensive or not very well done. You’re not competing against Google, Microsoft, Facebook and Netflix. Netflix [inaudible 00:24:21] an example. But these other companies, if you were building a Google Docs competitor for example, not only does your product have to be incredible because these horizontal products are usually pretty good or have a lot of features at least, but your marketing has to be that. Astalty’s in the NDIS provider space, the space I had never heard of, before looking at your H1. 

And then pricing’s the other one is usually you can just charge a lot more. If I’m buying Microsoft Word or competing against Google Sheets, you know that the price goes to zero. If I build Microsoft Word for academics who write in Hebrew or whatever, I should charge 10, 20 times Microsoft Word at least. You, in this space of like, “Well, couldn’t someone use Basecamp or Salesforce to do their NDIS?” You know what I mean? It’s like, “Aren’t there horizontal tools?” Yeah, probably, but you should be able to charge… For a specialized tool, you have pricing power because you’re not a commodity. Whether you can charge more or not is one part of the question. But the other one is that you do in fact… Your pricing is not going to zero.  

James Mooring:
Yeah, and there’s two really important things that we did that you just mentioned. So the first one is that we actually go to in-person events, which is probably an important piece that I missed. We were aware of these events and, essentially, the person… It’s kind of like a speed dating setup. You sit down, there’s a circle on the other side of the table and they all rotate. You give five minutes to sell your thing. The customers on the other side were kind of like 80% our ideal customer, and we were thinking, hopefully they’re not listening, “Why none of our competitors going to these things?” So we started going and they have been fantastic because we could actually demo the product right in front of them and our product was the best marketing that we had. So, that was another key to our success. 

And the other thing was around Facebook groups. So, a lot of these businesses do hang out in Facebook groups. I really remember in the early days, people would go into these Facebook groups and we’d search for the keyword software and we’d think, “I wonder if anyone’s asking what software to use.” So many people would be, “What CRM are you using? What software are you using? How do you handle your invoicing?” and they’d be saying all these different companies. And Jona and I said, “Wouldn’t it be nice if that was Astalty getting talked about there?” 

This happens fairly frequently now. Three days ago, somebody asked, “What software should we use?” And I think there was 22 comments, and 20 out of the 22 were Astalty. And not just Astalty but, “Astalty is great. I wish I went to Astalty earlier. I talked to Astalty, the support is amazing.” So all of our reviews are actually more… And if you look at Google as well, all the reviews are really in depth. They take the time, and I feel like that’s a very good indicator that people enjoy being here and just being part of the Astalty community and network.  

Rob Walling:
Yeah, and that’s great to have that. Here’s the assessment I asked Jason Fried years ago on MicroConf like, “Why did Basecamp work?” And he said, “Luck and timing were one and two, but we also did a lot of things right.” I don’t think luck and timing were one and two for you actually. I think the fact that you had a co-founder who really was deep in the space and that you’re obviously a gifted product person we’re probably one and two and I think you did a bunch. And there’s luck somewhere in there, and then I think you also did a lot of things right. That’s one of them of you said your support is lightning fast. I think your average response time is 45 minutes or something. You’ve obviously really cared a lot about your customers. 

Someone can listen to this and, any of these things individually, you can’t cherry pick these. You can’t say, “Well, I’m just going to do that one, and I’m just going to do that one and it’s going to succeed.” It’s like you need a lot of these in the same direction. And in yours case, we could pull some of these off and you still would’ve been successful. If your support was not amazing, you’d probably still be winning because I think your incumbents are just not great. I having never used them, I know what type of software that is. So I think some of these you could have left, but I think the combination of all of them is what makes a big difference.  

James Mooring:
I was just going to say on that point, in the early days, these all feel like one percenters and they feel like, “This is making no difference.” When a customer signs up and I call them, that’s not going to make a difference at all. But when you kind of compound that effort over months and years, then you see the payoff, and it’s not that hard to do. While you need to duck out, go to the grocery store, pick up the kids from daycare, jot down a customer’s number and just call them. How many times have you signed up to a software platform and got a phone call, not from a sales person, but just from somebody saying, “Hey, welcome to ABC product. If there’s anything I can do, just sing out.” I honestly can’t remember the last time, if any time, that’s happened to me. And that’s something that we do. 

So a lot of these things, people were just so refreshed because a lot of our competitors don’t have phone support. In the early days, we’re thinking, “This is going to be painful, but let’s do it anyway,” and they are painful in the early days and they feel like they’re not making a difference. But if you stick with it, eventually, if you invest time into your customers, they’ll give it back to you 10x, 100x in some cases.  

Rob Walling:
Before I move on to what I think will be my last question for you, I did want to call back to… You and I were just talking about in-person events and you were mentioning how valuable they were, and that would have been my guess actually. I don’t think it was in the timeline. You and I hadn’t talked about it, but I would’ve guessed for this business, negative churn, which you have, and in-person events. So I have these things, I call them the big five, B2B, SaaS marketing approaches and its content, SEO, cold outreach, integrations, partnerships as one, and ads. So I haven’t written on this thing, I refer to it all the time. But my next five depend on the type of business and it depends on the lifetime value and all this stuff. My next five are in-person events, free tools, so like engineering and marketing, podcast tour, affiliates, and Capterra or G2, and I separate those from ads even though they’re kind of same thing. 

The events one, when it works, it really works and it works usually in tight verticals and you need a high enough annual contract value to make it work. So, it definitely fits my kind of mind map of your type of business, of this vertical with a 50, $60 per seat price point with all that. It’s not surprising to me at all how valuable the in-person events have been for you.  

James Mooring:
Jona, my co-founder, he’s actually working really hard. We’ve just launched a partners and affiliates program as well. So we have a lot of consultants in the space, as you can imagine, being a complicated area. So now, we’re engaging with consultants and other businesses that have similar customer base and trying to partner with them. And we’ve got an affiliate program, refer a friend, we’ve got ongoing commissions where we’re kind of doing all these things now, which is again just kind of compounding on everything else that we’re doing, which is fantastic.  

Rob Walling:
I want to leave us on this high note of you did a very clever price increase, and I don’t even know if you would call it a price increase. The way you described it to me was I was like, “I don’t know that I’ve ever heard anyone do it this way.” I want to bring it up so that someone listening might think about doing it the same way. So we talked about how you had Astalty Pro or Professional, you still do, that is a tier of the software, $49 a month, and that’s how you’ve been for two years. 

So just a couple of months ago, in February of ’24, you launched Astalty Premium that was an early access, new price point, $64 per user per month, and you had built a bunch of functionality. You didn’t just want to throw it in the 49, so you built Premium. So not only did you get a bunch of people upgrading from Astalty Pro, but you said… If you go to the pricing page right now, it’s kind of hidden, it’s that you say, “We kind of hide Professional,” so you must be able to click a link and get to it or something so that actually most people are signing up at $64 a month and getting full functionality. Did I summarize that correctly?  

James Mooring:
Yep. Yeah, exactly. Exactly, and I think when we launched… Within the first week, 30% of our existing customers upgraded straight away.  

Rob Walling:
Interesting. So if you had gone in and just said, “Hey…” This is the hack, this is the cleverness, is you could have put all those features and all that functionality into Pro and then said, “By the way, we’re raising your price to 64 because we launched this stuff,” and guess what? Some people would’ve been cool with it and some people would’ve been really pissed, but you actually launched a separate plan that’s too close. $15 is too close. If you told me I was going to do 49, 64 as my price points, I’ve been like, “No, no, no. Move them far apart,” but you were kind of going for a incognito price increase. This sounds like it was pretty deliberate.  

James Mooring:
Yep, and the price difference was also very deliberate. We wanted it to be a no-brainer and Professional’s actually now $59 a month for new customers, so it’s only $5 extra, and we gave everybody on Professional a four-week trial. The Premium features are pretty sticky. You can generate contracts, you can send things for e-signing, you can track documentation. There’s a lot of things that are built in that are super, super valuable. And we said, “Well, let’s just give everybody four weeks to give this a go.” It’s kind of like once you get a taste of it, you don’t want to not have it. And then we kind of changed our pricing page. I think 98 or 95% of new customers signed up to the $64-a-month plan, which is fantastic. So, yeah, we kind of did a price increase without doing a price increase.  

Rob Walling:
End of this year, are you doing 79, 79 a month for Astalty Gold? Is that where we go next? Astalty Platinum?  

James Mooring:
79 was actually going to be the price point of premium and we thought, “Let’s bring it down and try and go for more volume,” and I’m very glad with did because I think 79 would’ve been a little bit too… Once you kind get up around the 7s, 8s, 9s, those numbers start to look a lot bigger, especially for bigger teams. When we launch the kind of next functionality, which is scheduling and rostering, we will actually have a cheaper price point for that because the user type is different. They’re only going to be on the platform a few hours a week, things like that. But it’s all about for us trying to make Astalty, not just the software, but through our partners, through our resources, through the software itself, through the support, just a place that you want to be. 

I use this analogy of not choosing the least worst option, and I think about tools like Slack as one of those. You choose Slack as the least worst option to solve that problem for you, right? And then, I don’t know if you know a tool called Linear, which is an issue tracking kind of like Jira. Whenever I use Linear, I think, “I enjoy using this software, I want to use this software,” and we want people to feel the same way about our software. And you can’t do that just through product or support or resources. You kind of have to have everything, “Come to us and we’ll look after you, whatever you need. If we can’t do it, we’ll let you know about somebody who can.” So, we’re just about providing value and I think people really appreciate that. It’s quite refreshing as well.  

Rob Walling:
Yeah. James, big congratulations on you and your co-founder’s success. You’ve built a heck of a business. I hope, as listeners have heard this, that they take a bunch of things away that you did a lot of things right and that you and your co-founder made smart choices. There was probably some luck involved in a few of them, but I think you would’ve succeeded with almost minimal luck because of all the things that were in place, like your founding team construction, I already talked about, developer plus subject matter expert. You backed off on building an entire CRM and instead you built just the support coordination piece of it. You limited the scope you marketed before you were coding, right? You built the Chrome extension. You built Astalty Lite as marketing. You picked what sounds like a market with kind of a big hole in it. You built vertical SaaS. You increased your prices multiple times. You priced well from the sell. You did a lot of things right.  

James Mooring:
I just want to kind of point out the other thing about doing things right. If you’re not (beep) things up along the way, you’re not going to get there. It’s more about being able to not be afraid of being wrong. If you get it wrong, change fast. And the speed of being able to iterate is super, super important. The quicker you can eliminate the wrong things to do, the faster you’ll arrive at the right things to do. So I think it’s kind of nice that we get to this point and everyone’s like, “Well, you did all these things right.” Now, sure. But when you’re going through that process, you do do a lot of things wrong, and that’s absolutely fine. If you’re not doing things wrong… That’s where you learn what’s not going to work. So, I think that’s just an important point.  

Rob Walling:
I like that a lot. That’s something Einar and I tell to our TinySeed companies all the time of like, “You got to move fast. You’re going to make some bad decisions, you’re going to make some wrong decisions, but you need to do a lot of things such that you work mostly on the right things.”  

James Mooring:
Like Ben Chestnut says, “Stab in the dark, but stab very fast.”  

Rob Walling:
Exactly. Super impressive, man. It’s a great business you built. If folks want to see what you’re up to, they can go to astalty.com.au. And is there anywhere else online that you hang out, to look for? I don’t think you have a Twitter account, but is there anything that… Is it LinkedIn where people could maybe keep up with you?  

James Mooring:
Yeah, LinkedIn is probably the best place. I’m kind of on Twitter, but not super active there, but certainly on LinkedIn.  

Rob Walling:
So folks who want to find you on LinkedIn, you are James Mooring, M-O-O-R-I-N-G, and you live in Australia. I don’t know how… On LinkedIn, what if there’s 25 James Moorings? How are they going to know it’s you? Oh, Astalty, right? That’s going to be the… You need one more piece. When I search for people’s names in Google and I’m like, “James Mooring Twitter,” and there’s like 20 of them, so then I usually throw in the company name and that gets me there. 

So James, once again, thank you so much for joining me on the show today.  

James Mooring:
Not a problem. Thanks. Really appreciate it.  

Rob Walling:
Thanks again to James for joining me on the show, and thanks to you for joining me this week and every week. I did a call for more advanced questions because obviously a lot of the questions that I get on the show are from folks looking to validate ideas, are just very early stage, and that’s fine. But I know that there are a lot of listeners to the show that are doing 10k, 100k, 300k a month or more. There are folks out there right now thinking, “Yeah, I’m doing a lot more than that.” And I don’t want to give the impression that this show is only for new folks just getting started. There’s so many people doing seven and eight figures in the MicroConf community, in the TinySeed community, and even in the Startups For the Rest of Us audience. 

So if you saw my question on Twitter, thank you for responding. I’ve got 10, 15 really good questions that are for folks who are building great businesses and not just about early stage stuff. And of course, I will continue to accept those and answer them in future episodes. You can always submit questions by going to startupsfortherestofus.com. Hit Ask a Question in the top and ask them there, or you can respond to me on Twitter. Thanks so much. This is Rob Walling signing off from episode 722.