Episodes

Rob Walling:
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Welcome back to Startups for the Rest of Us. I’m Rob Walling and I am your host for this momentous 700th episode of this podcast. Today I want to talk about playing the long game. And what’s interesting is it’s a thought that I had three, four weeks ago that I threw into a topics Trello board that I maintain, and it hadn’t occurred to me that episode 700 was so close. But instead of having my friends send audio into the podcast, having my son interview me, which I actually think someone suggested and I think I’m going to do that, couldn’t pull it together for episode 700 or any of the other stunt episodes. If you go back and listen to episode 100, 200, 300 of this podcast, we did a lot of those things and they were really fun. 

For this one, I just wanted to do a Rob solo adventure and talk a bit about playing the long game. Before we dive into that, applications for TinySeed are opening on February 12th and close on February 25th. If you’re not familiar with TinySeed, it’s the accelerator I run for ambitious, mostly bootstrapped B2B SaaS founders. Even if you’re interested in applying outside of the window of February 12th to February 25th, you can join our mailing list to be notified when applications open. Again, visit tinyseed.com/apply to get on the mailing list or to apply. 

I’m going to admit I’ve actually struggled to sit down and record this episode. Normally for these solo adventures, I make a couple bulleted points and I just go. I riff. This one, I’ve struggled with… I’ve actually outlined it quite a bit, and so this episode 700, I can do it just as a normal Rob solo adventure, but there’s something that I want to convey in this episode that holds perhaps more weight than that, and it’s about this concept of playing long ball, or playing the long game. As I came up as an entrepreneur, I learned direct response marketing, and back in the old days, they talked about two types of marketers, brand marketers, which is like Coca-Cola, Procter& Gamble, Crest Toothpaste and Dove Soap, and how those marketers could spend a kajillion dollars on a Super Bowl ad just to get the exposure, whereas direct response marketers needed to have a measurable return on their investment. 

So if they took out ads for 100 dollars, they needed to make 110 or 150 or $200 on those ads, and be able to measure that to stay in business or to convince themselves they were making money because they didn’t have infinite runway. And as a bootstrapper I, of course, without infinite runway, quickly became a fan of this direct response marketing, not the brand marketing that folks seem to have been talking. I mean, this is early 2000s, and in the startup space, everyone was talking about building a brand and having Kid Rock at your launch party and literally taking out Super Bowl ads. And I just couldn’t afford any of that. I needed to make $2 for every dollar I put into the machine. And so what that does for you is it gives you a short-term mindset, and that can be both good and bad, right? 

It’s good because it motivates you to build a viable business and a business that generates revenue and profit from the start. That is a superpower of bootstrapping. But it’s bad because it teaches you to think in the short term. And for me, I rarely looked out more than a few months in my entrepreneurial journey. I never looked out 10 years and said, where might I be? Where might want to be? I always looked ahead and said, what’s the payback on these ads that I’m running right now? Can I make my money back in two months or three months? When will the SEO traffic that I’m going for justify all the time I’m investing or when will I make it to 10K a month? I think it was 8K a month actually, so I can quit my day job. And if I’ve learned anything over the past, whatever, a couple decades of being an entrepreneur, it’s to hold two things in tension, that both things can be true at the same time, right? 

It’s to get away from my programmer mindset, very left brain, on or off, binary ones and zeros, and to think, you know what? I kind of need to do both. I need to think in the short term, because I need to make enough money that I can quit the day job or that I can justify all this effort I’m putting into it, not hanging out with my friends, perhaps not hanging out with my family, working nights, being tired around a day job. I have to think in the short term, I need to accelerate revenue so that I can quit that day job or do whatever the other goal is. And also now, and again, I should take a step back and think about what is the next six months, 12 months, 12 years look like? When I talk about playing the long game, I do think about it as a fractal. 

So if you’re familiar with the fractal, if you go to a tiny, tiny piece of the California coastline and you look at it from 100 feet up and then you go to 1000 feet, 10,000 feet, 30,000 feet, the idea of a fractal is that a small piece of it repeating can start to look the same. From 30,000 feet, it can look the same as at 100 feet. It’s a different perspective, but it’s essentially a never-ending pattern. And the idea is that fractals are infinitely complex patterns that are… I’m reading a definition now, self-similar across different scales. Self-similar is interesting. But you get the idea at 100 feet, 1000 feet, 10,000 feet, 30,000 feet, a piece of the California coastline can look different. I feel that way about playing the long game. And what I mean by that is up close, the long game might be a year spent getting your SEO efforts in order. 

Maybe it’s two, and that can be the long game in the short term. But then the long game might be a decade or two, as your whole career unfolds, and you realize as you go that there’s a single thread tying everything that you do together. And looking at that thread and being deliberate about saying, what do I like about this and what do I want to lean into? What am I good at? What skills do I have? What do I enjoy? And doubling down on that when you have the opportunity, you don’t always have the opportunity if you’re working for someone else, you may not, but as you have the opportunity to guide your own career, I think that that’s a higher altitude fractal looking at a decade or two versus a year or two. And one example I want to give in terms of SEO is Ruben Gomez with Seinwell. 

He’s an often requested guest on the show, and a year or two before he launched Seinwell, which is an electronic signature app, he started his SEO efforts. He didn’t have a product, he put up a landing page, he put up a small website, he started working his SEO Magic. There’s secret sauce in there, so I’m not saying everyone could do this, but if you’re just starting out, you don’t go after electronic signature, you don’t go after electronic documents, you go after a smaller niche. That’s why I talk about it and start small. Stay small. You find a niche where you can compete as you’re learning. My first SEO efforts were with Dot-Net Invoice, and it was invoicing software, so I was trying to compete for those terms, but also it was for Windows servers, it was for vb.net, C#. There were all these kind of long tail terms that no one was competing for, and I didn’t need to make a million dollars a month. 

At the time, making three or $4,000 a month was absolutely life-changing. It was a few hours a month I was spending, and while I couldn’t have won for electronic signature, I certainly could rank for the Dot-Net invoicing software or asp.net invoicing application or any of those long tail terms. And so I’m saying this because what I see a lot on social media, Eye Roll, Exhale is a folks bragging about how quickly their success came, probably not telling the full story when they do, but then other folks trying to model that and wanting to seek that. And nothing is wrong with that. I was once an opportunistic young founder as well, and I wanted the success next week or next month. But in most cases, that’s not the way it goes. In most cases, you’re going to put a year or two in just to get enough SEO rankings that when you launch your electronic signature or .net invoice app, it wouldn’t have taken two years to do that. 

But when you launch that app, you have looked ahead and you’ve planned ahead to set yourself up for success. Another example is from season two of TinySeed Tales where Gather, which was focusing on one in two person architecture and interior design firms, they went up market and they wanted to go to five to 20-person teams. And we talked about it and they knew it was going to take months and their estimate, I don’t remember time, I think it was six months or nine months, took them 18 months to get there. And it was a harrowing 18 months. If you go back and listen to that show and then the follow-up, they almost ran out of money a couple times because they thought that they would start to accelerate and grow faster than they did. And playing the long game is leaning into that and saying, “We are going to make it. We are making progress, and there is something up ahead.” 

Now, again, at a certain point, there’s a chance it just wouldn’t have worked, right? When should they give up? Well, we would’ve evaluated. I would’ve asked them, do you have any more ideas? Do you have any more cash in the bank? Do you have any? What are the alternatives? And at a certain point, you have no options, and that’s usually when you quit or when you give up. In the fractal, those are the 100-foot view, right? 1000 foot view where you’re down and you’re looking at a year or two. I think about things that I had no idea how long they would take. But one of them took seven or eight years, and that was an angel investment, my first angel investment I ever made, which was into WP Engine. And frankly, any angel investment, you should think, I’m not going to… it’s probably going to go to zero, and if I get anything back, it’s going to be 10 years. 

That just seems to be the thing. And I didn’t really realize that in 2010, 2011, when I scraped together a couple… 20 grand I think, which was an enormous amount of money for me at the time to write Jason Cohen a check, and I was honored to be part of it, and it paid out a tremendous payout for me. And it’s probably the third most lucrative asset I have ever owned. Maybe I’ll record another podcast about… I have them in order in my head, but angel investing specifically in WP Engine is probably the thing that made me the third most money. The first one, of course, is building and selling software companies. I bet you don’t know what the second one is. But I’ll be honest, I didn’t know it was going to take seven, eight, nine years. I did assume that when I wrote the check, it was going to go to zero. 

And the interesting thing is Sherry and I wrote a lot of angel checks around there. I think we I think it’s 20 or 21 private investments that we’ve made, and most of them are made between 2010 or ’11 and 2014/15. And it’s such a trip now to see those either shutting down or providing returns. I just had no idea, but it really did take that eight to 10 to… well, it’s almost 14 years now, isn’t it? Yeah, it’s incredible. It’s incredible just putting in the time and how things compound. But that leads me to the question of another long ball. Why did Jason Cohen reach out to me? It was a closed round. And if Jason Cohen approached you and said, “Hey, you want to invest my next startup?” Your answer is yes. You figure out how to get the money. Again, I had never made an investment. 

I didn’t really have the money to invest, but I just figured this was going to work. But how did I know him at all? Well, I’d been blogging since 2005, and this is what, six years in, because I wrote Start Small, Stay Small, and he ordered a copy of that book and read it. And when he emailed me about investing, we didn’t know each other. This is, again, 2011, this is before the first MicroConf. He had never spoken at MicroConf. We had never met, I don’t even know if we’d emailed. And he said, “I’ve been reading your blog,” which of course I was reading his at the time, and he said a lot about virtual assistants, “You know about bootstrapping. I’d love to have you in the round, it’s closed round, whatever.” You can scrape together. So how did I know him? Well, he knew me because I was putting in the work. 

I was playing long ball. I was blogging and writing books. How do I know Darmas Shah of HubSpot? Because today, if I emailed Darmas Shah and he didn’t know me, he’d be like… he wouldn’t respond, right? He has so much going on that if you didn’t know him from the old days, he’s not going to respond. This is the same, Ben Chestnut from MailChimp, why do I know him? Eric Reese, Patio 11. Sam Parr of My First Million. Why do I know any of these people? And it’s because I’ve been doing things for 15 or 20 years, and enough of them in public. That’s the key. Now, I’m not saying that you need to go build an audience, start a podcast, start a conference, write books. I’m not saying it’s any of those things. There are people like a Ruben Gomez, like Sean Ellis, Brian Balfour, who they aren’t the audience building folks. 

I know Brian Balfour now has a podcast, but that’s not how they got famous. They got famous by being internet famous in our circles, by being really good at what they do and talking just enough about it that we realized these people are really smart. They did conference talks where we would catch a bunch of new ideas, because they were thinking outside the box. We hear him on podcasts. There’s other ways to do stuff in public. Ruben is another example. Even like Derek Reimer of course was on the Art of Product podcast. Before that, people still kind of knew who he was because he built Drip. And now he doesn’t have Art of Product anymore, and people still know who he is. He’s not doing a bunch of blogging. He’s on Twitter, but you wouldn’t say he’s trying to build an audience, but people learn no and respect you by the things that you ship into this world, and that can be content, but it doesn’t have to be. 

And here’s the thing with doing all of this; you are putting value out into the world, especially if you’re teaching educating. And please don’t be obnoxious and start teaching and educating from day one and saying, “I’ve done this and this is how everyone should do that.” Like, “Oh, I tried freemium and it doesn’t work, therefore freemium doesn’t work.” And it’s like, come on, this topic, there is prior art. Can you at least read some of the prior art and not try something once and then write it off, or not try something once and then say, this is the only way to do it? Because it’s just obnoxious and annoying. However, coming at it from a beginner’s mind and saying, “Ooh, I tried this experiment and this is what worked. What do y’all think about it?” Or, “I tried this experiment and this is what didn’t work and I’m learning and I’m on my journey.” 

There are ways to couch this and talk about it, that as you do become an expert, you can then talk like an expert. But you don’t need to fake it till you make it. You need to fake it till you make it internally to feel confident, but you don’t need to fake it… I hate people when they fake it online, and I know it’s like that person doesn’t know what they’re doing and they’re acting like it, right? So all that said, I think doing some stuff in public, and it doesn’t just have to be content is beneficial for you in the long term. And you might be wondering; Rob, did you know that when you started blogging, blogging in 2005 podcasting in 2010, MicroConf, 2011, TinySeed 2018 and Drip was in the midst there too and hit tail. There’s all these other overlapping things. 

Did I know that the 2005 start of my blog that it would lead me to write four books, put out 700 podcast episodes, start micro comp, all that? No, absolutely not. And I didn’t know what this podcast would turn into when we started it 14 years ago. Almost. I think by the time this comes out, it’ll be within a month of our 14-year anniversary. And no, I didn’t, but I realized along the way that I was onto something. That’s the thing is there’s this book about a startup founder. I don’t remember the name, and the book wasn’t very good, so even if… I remember it not being great, but he built and sold a startup really quickly, and this is probably written in the early 2000s. And it might be even be called Lucky or Smart, that might be the title of the book. 

But in it, he has a quote that I’ve remembered forever. This is 20 years old, and his quote was, “People ask me, were you lucky or were you smart?” And his conclusion was, “I was smart enough to know that I was getting lucky.” I’ve always loved that. That’s how I feel about my career. That’s how I feel a bit about playing long ball is you’re going to wander, you’re going to put in hard work, 700 episodes of a podcast, four books, whatever you want to call it. All these events, 30, 40 in-person events we’ve run. It’s been hard work. Has it required skill to market and building on it? Yes, Of course. Have I gotten a little lucky? Absolutely. And along that way, I’d like to think that I eventually became smart enough to know that I was getting lucky. I’m going to admit Mike and I did… 

I don’t think we realized what we had with MicroConf for the first seven years. We started in 2011. It wasn’t until 2018 that it really hit me what we had built and how hard it is to build a community like that and how you unique of a community it is, and how many people’s lives we changed through this podcast and that event. It makes me feel very weird to say that sentence. I don’t want to feel like I’m bragging. I don’t want you to feel like I’m congratulating myself for patting myself on the back. But I think that was to my detriment for those years that I kept saying, “Oh, it’s nothing. No, it’s not a big deal.” It is like the person you compliment and they can’t take a compliment. That’s kind of how I was with MicroConf. It was just this thing that we did and we show up and the podcaster just show up every week and ship. 

And in 2018, I had left Drip, I sold it in 2016, left in ’18. And we received a seven-figure cash offer to sell MicroConf. And we seriously considered it. And I’ve talked about this on the podcast before, but this was a turning point because I had basically sold everything really to fund Drip and then sold Drip. And so the only things that I had left were a blog, robwalling.com that I hadn’t written an article for in years. This podcast. And those are the things that we had left. And so the idea of selling it all and just moving on into the tabletop gaming space, which is what I was going to do. It sounded kind of appealing a fresh start, and I think it would’ve been one of my deepest regrets in my life if I had done it. I took six months off in 2018 and I went on a founder retreat. 

I talked to Sherry a lot, but I gave a ton of thought about what is the next chapter of my life, potentially the rest of my life look like my professional career anyways? Do I want to be known in the tabletop gaming space, become a game publisher, whatever it is, whatever I was going to do there? It’s a hobby that of course, I would turn into a job so that I wouldn’t enjoy. But on this founder retreat, I went away for a few days and I realized this is what I’ve been doing for free. This is what I’ve had to do for now 13 years. Because I think about starting the blog in oh five as kind of the start of all this for me. I know it wasn’t when the podcast MicroConf started, but it was that idea of I want to be involved in this space. 

I love being an entrepreneur. I love talking about entrepreneurship. I want to talk with other entrepreneurs and just be around them all the time. And there was no community. And so first we built an audience, then we built a community. And it was at that moment in 2018 on this founder retreat where I thought, I’m going all in on this before this. People don’t remember. MicroConf was just an event. We ran once a year and then twice a year in the US and Europe. That’s it. We didn’t even have a Slack channel that lasted year round. There was no state of Indie SaaS, there was no MicroConf YouTube channel, there was no mastermind matching. All the stuff that we’ve launched that people now think about MicroConf as this community. All of that started in 2019, and it was that decision in 2018 that I made with incomplete information, by the way. 

But there was a bit of founder gut and there was a bit of founder vision, right? Hey, this is where I want to go. And also the realization of I think now this is my legacy. And over that next year or two, that’s where this statement of my professional mission in my life is to multiply the world’s population of independent self-sustaining startups. That became the thing. And that’s when I realized, oh, MicroConf does that. What else can we launch out of MicroConf? And we started thinking about the video vault and the YouTube channel and all this and that. During that time, it became obvious. I was writing personal angel checks to Bootstrap SaaS founders, and that’s where the idea of, well, if we raised a bunch of money, we could do that at scale. Because again, in five, seven years I had written 20 checks, that’s kind of the money we wanted to put into startups. It takes so long to come back. 

TinySeed, we’ve written 151 checks. So you’ll see over the past four or five years, we’ve been able to help and impact so many more founders on that mission to multiplying the world’s population of independent self-sustaining startups. And so if you’re listening to this, you might be thinking, how do I know that I’m in the right game, that I’m playing the right long game in the messy middle days? If I’m in the middle of all this, is it obvious? In my experience? It wasn’t until it was, and in fact, in hindsight, it should have been obvious. Someone should have told me, “Dude, do you realize you’ve been doing this basically for free on the side as a hobby for more than a decade?” 

And by this I mean blogging, then writing books, MicroConf, which was essentially run at breakeven. It made a little bit of profit, but the podcast certainly didn’t take sponsorships, actually drew money. It feels like someone should have come along and told me, but eventually I did realize it right in the messy middle, I did this retreat and had this whole realization of like, oh, that’s where it is. And so is it only in hindsight that you can realize that you’ve been playing the right long game? I’m saying this to you as a listener. Are you thinking about what long game you’re playing? Whether it’s that fractal of I’m working on the SEO effort that’s going to pay off, or I’m working on this pivot or this move-up market, or am I thinking more about my career over the long term? What seeds are you planting today that can take you through for the next five, 10, or 20 years? 

What things would you prefer? What seeds would you prefer to be planting? Where do you want to be in that 10 or 20 years? And it’s a big question. It’s often hard to know. It’s that whole metaphor or the analogy. I forget which one of those it is, but it’s the airplane taking off from New York to LA, and making course adjustments along the way as you gather new information. That’s how I think about playing the long game, is you’re not going to know it at the start. And I don’t know that you… you could choose. I tell you what, consider yourself lucky if you choose the long game that you want to play. Because I don’t know that I did. It was more of like, eh, the people are blogging. I’m like, Paul Graham and Joel Spolsky are blogging. I’m going to start writing and see what happens and publish a blog. 

And I spent much time and it was super nerve-wracking. And eventually I took the next step. So I wasn’t choosing it along the way, but at a certain point I did realize, ooh, I really like this and this is fun, and I like this more than most of the other things in my professional career. And so, if you are very certain what long game you want to play, that’s awesome. Congratulations. I wish I was as lucky as you. It definitely took me many, many years to kind of realize that I was already playing a long game. I was in the middle of it, and I looked around and realized; oh, this is the one that I want to keep playing, right? It was really driven home for me in 2018. I will say that during those years though, really starting in probably 2002, 2003, I did start stacking skills. 

And when I think about playing a long game, I do think about are you acquiring new skills along the way, or are you stagnant? I’ve often used the metaphor of which tools do you have in your tool-belt? In marketing, it was like I learned SEO, and then I learned AdWords, and then I learned display ads. Is it a tool belt or a skill belt? Trademark 2024, Rob Walling. Which skills do you have in your skill belt? I hate that word already. I’m not going to be able to use it with a straight face. But you get the idea of… I was thinking back, things that I learned in order are the following hard work. I learned upfront that my parents taught me, “You’re not going to get anything without hard work.” So that was a skill that was instilled in me from time I was very young, and I’m glad they did. 

If you haven’t learned that yet, hopefully me saying it today convinces you of it. But then the next skill I learned really was web development. Two years out of school, out of graduating from… I went to public university in California, and then I learned how to hack together a UI and HTML by reading some books and some online tutorials, and then kind of launched some small efforts that didn’t do anything. And I learned how to blog. Five years after that, I then realized I needed to learn how to do conversion copywriting. I learned it from info marketers, but no one in the startup space was talking about it. And I realized in order to sell anything, I needed to know how to write copy to get people to click or buy or do whatever. So that was about a year later around the same time, how to structure a marketing website. 

I learned SEO. A year or two later, I started messing with pricing, because I had either built or acquired a couple products. I learned AdWords, then how to acquire small products, on and on, until… then, I started leveling up, right? Audience building, writing books, podcasting, in-person events and whatever it is I do today, just being on camera and such. All of this was me stacking more skills into that tool belt. And hard work, luck and skill. These are the three things. I can control hard work. I think most of us can. You put in more hours? Not to the point of being stupid, like a Silicon Valley startup, 90-hour weeks. That’s not what I mean, but you know what I mean. Focused, attention and just doing the work and putting in the time. Luck, much harder to control. Let’s just be honest. You can get luck, or you can’t. 

We can talk about making your own luck, luck surface area, yes, all that’s true, but that is the one you can least control. I think hard work’s probably the one you can most control, and then skills are in between. If I’m playing a long game, am I building skills and learning along the way and getting better at something? Like I just described that long series of things that I learned. Those all point towards me playing this game of building startups and then teaching others, encouraging others, educating others, and now investing in others who are doing the same thing. So I never could have guessed 20 years ago that this is where I’d end up. But I do think that as you’re going along on this journey, thinking about does my next step tie into my last step? Or am I just bouncing all over the place and not building new skills that relate to each other in a way that if I do look ahead five or 10 years, that I’ll be better off playing this game? 

All that to say 700 episodes of a podcast. When I get interviewed, people ask me, how have you done it? How have you never missed a week? And the answer is, I don’t know. I just kept recording. Once we were six months a year in, it was just a thing we did. And I know that’s not helpful, but I will say the feedback loop, what was helpful is there was a feedback loop. We didn’t just record into the void. We didn’t record a podcast over and over with no comments, no feedback, no listeners, no responses. There were signs along the way. The audience was becoming a thing. Hundreds of people after the first year, it wasn’t a lot, but I think we had maybe 600 listeners after the first year. And I had 25,000 RS subscribers at the time and a few thousand on my email list. 

And I was like, this is so not worth our time. But it was fun. I enjoyed it, and people were listening and that had an impact. And then at a certain point, it just became, especially in… I think there were several times between 2010 when we started this in 2018, where I thought just throwing in the towel and ending it. And I have never thought that since 2018, since having that big reckoning with this is what I do now. And I don’t think we should feel that way necessarily about companies we start. I think all of us exit, right? Everybody sells eventually. And I don’t think that we should be so attached… like starting a software company and then being that attached to it, I think see the talk from Dr. Sherry Walling a few years ago where she talks about how founders look at their logo and it stimulates the same part of their brain as when they look at pictures of their kids. 

So kind of literally lending credence to the idea of, oh, my startup is my baby. And it’s not super healthy. It leads to emotional entanglements that I think are not the best. But with a podcast or with something that I do think I’m going to do for a long time, am I going to sell the podcast? It’s not a SaaS app. So I think I’m able to manage that. It is more a reflection of me than I think a SaaS company should be for most founders. All that to say, thanks for being along on this journey. I almost didn’t record a special episode this week, because it just happens to be an episode with two zeros at the end. But I do feel like reflecting on progress and giving thoughts are warranted, and I think celebrating your victories… As much as I tell you to celebrate those victories, whether it’s on your own or whether it’s with that spouse or significant other who has been by you, your original investor, your first investor, as Sherry says, if I tell you to do it, then I need to do it too. 

And so here’s to 700 episodes of this podcast. Thank you so much for being along with me on the journey from the early days of Mike and I recording them together, to the transition that I thought might implode the podcast back in 2018, through the interviews, the solo episodes, the format changes, the audio quality changes, all manner of craziness. I really appreciate you sticking around. It means a lot to me. I wouldn’t keep recording if it didn’t impact people. These days, I don’t do things that I don’t think are impacting the broader entrepreneurial space and that are impacting folks like you. So thanks for being here this week and every week. This is Rob Walling signing off from episode 700.

Rob Walling:
Welcome back to Startups For the Rest of Us. I’m Rob Walling. I’m your host this week and every week. This week I speak with Derrick Reimer. He’s a fan favorite guest on this show. He’s the founder of SavvyCal, what I call the best scheduling link on the internet. And today we answer a handful of listener questions from a single listener, a bit about UX design, how to prioritize and build features that scale. We talk at the end. There’s a bonus question about podcasting and just how to get better at that. All in all, it’s I think a really informative and casual conversation between Derrick Reimer and myself. 

Derrick and I have known each other for, I don’t know, 14 years or something. So these episodes flow very naturally and I feel like hopefully the content in this episode in thinking about product decisions and UX paradigms and just we relive some moments from building Drip as well. Hopefully these are inspirational as well as provide you with some actionable things that you can implement in your own entrepreneurial journey. 

Before we dive into that, tickets for MicroConf US in Atlanta next April 2024 are on sale. This event will sell out. If you’re thinking about coming to Atlanta, April 21st through the 23rd to see me co-host this event with Lianna Patch and to see speakers like myself, Rand Fishkin and several others, head to microcom.com/us to grab your ticket before they sell out. We had an amazing event just a few months ago in Denver, and I expect the event in Atlanta to be no different. So MicroConf.com/us to grab your ticket today. So with that, let’s dive right into my conversation. Derrick Reimer, thanks for joining me on The Startups For the Rest of Us.  

Derrick Reimer:
Thanks for having me back. It’s always a pleasure.  

Rob Walling:
Yeah, it’s good man. It’s good to catch up with you. I have several questions today from a longtime listener, Alan King. He’s a multi-time MicroConf attendee and he pinged me with some questions and eventually I said, “You know what? Just record them as audio. Derrick’s coming back on the show anyways, I like having him on.” 

So let’s talk through them. A lot of these are going to be around UX design, attacking different verticals stuff based on your experience and knowledge. So with that, let’s roll into our first question.  

Allen King:
Aloha Rob, Alan King here with funjoin.com. I’m a loyal listener, big evangelist and fellow Jedi Master in practice of course. What are the top three things that a senior UX designer needs to consider when scaling a product like Drip?  

Rob Walling:
So when Alan asks this, I think less about scaling throughput of billions of records and rows, I think as an app scales to many users with disparate experience and technology level or I think of even how do you scale this to different use cases. So how did Drip serve bloggers and SaaS founders and we had some media brands on it. We had e-comm, that’s a form of scaling. And even just functionality, if you know you’re going to become a complicated app or you kind of already are, how do you allow that to happen without having a terrible user experience. Salesforce, I’m looking at you. It’s like that kind of stuff where it’s just bloat and all that. How do you think about this and whether we do top three or whatever it is, what are the things that you’re thinking about? And I know the answer because you and I did this for years, but I’m fascinated to hear what you’re going to say.  

Derrick Reimer:
Yeah, this is a big question and a really tricky one because as you mentioned, just as an example, something like a Salesforce, it’s really difficult and some of the most successful software products in the world in terms of revenue or market share actually do a pretty poor job at this and end up having to fall back on a lot of training or handholding or just at a certain point, a lot of these products end up having their own kind of university or training program with certified people to just help people wrap their minds around how to actually use the thing. So I mean part of this is there’s always going to be this tension of at a certain level of scale and complexity, you’re just going to find there’s more and more support burden and training and supplementary things that need to go along with it. 

But I still think it’s a worthy ideal to try to architect your product as well as you can so that people don’t feel like they have to constantly be reading the docs or asking support or whatever. So all that to say, I think a couple of things come to mind. I remember when we first hired our first outside designer besides me at Drip post-acquisition, one of the first things he did was starting to think about the design of the application more as a design system. I think before that point, each interface that we built was sort of an ad hoc thing. It was sort of its own creation. I think in the early days of building a product, that’s that’s how I’ve found things naturally happen. You don’t really know how the product’s going to take shape. What do the setting screens look like when there’s five pages of them and a bunch of different sections? 

I mean early on you usually have a page of settings and so you kind of start with just what you need to begin with and you design that interface ad hoc and then you realize, “Okay, I need to add another tab here and what are the pieces that are actually reusable?” So we’re not having to constantly rethink, “Okay, now we have a new setting section. How do we approach designing this? Are we using check boxes or toggles? Are we using native dropdowns? Do we have a custom dropdown that has more information stuffed into it?” 

And before you know it if you’re not thinking in terms of a design system, then you can end up with a hodgepodge of different choices that don’t really speak the same design language. So it can be kind of confusing and it could also be a lot of effort for your team to, if every single interface requires you to kind of think from the ground up. How this is going to look, what components you’re going to use, it just becomes really difficult to maintain, difficult to scale and costly because you’re doing a lot of repeat work. 

So something that, I mean a design system, I think it doesn’t necessarily have to be what you see some of the bigger companies or bigger startups doing. I think Airbnb is an example that they have a huge website that’s just all of their component libraries and everything is parameterized and it’s like they almost built their own custom library of stuff. I think other companies tend to do this. When you’re small, that’s way overkill. And I think we had something sort of that we could gradually build out. So I think he started with a single page, Brian, our first designer, started with a single page, let’s just standardize our buttons, form elements when we display a table, unless it’s a really, really custom thing, we can just use this standard design and banners and icons. So we just started to standardize these elements. It made the process of building new interfaces a lot quicker. So that’s probably my first thing.  

Rob Walling:
That’s solid gold advice right there. And it’s funny, because I had forgotten that. So I jotted notes of my own things and it’s super tactical things, but when he says top three pieces of advice that is, that’s the top three, to have some type of design language. And I remember because the way we got that far was you were the only designer and so everything you designed, you’re like, “I remembered I put it over on this page, copy paste.” But the moment we had two designers, that doesn’t work anymore because they don’t remember that you put the toggle over here, you had the multi-select or whatever. 

So that’s what it was his job to go through and look at all the work you did and say, “Let’s put it into this single kind of internal knowledge base thing.” If I remember, I don’t remember what the software was, but it was something, and like you said, it was pretty lightweight and it was built out as we went. That was something that you and I think for the betterment of everything, we were pretty resistant to heavy process and we’re not going to build out all these UI components, custom Drip dash whatever, right? Like we don’t have the bandwidth for that. Even with the team size, we did  

Derrick Reimer:
A couple kind of tactical things to add to this bullet point I think too, and these are things that I’m thinking about as I’m building SavvyCal. We’re still very small. I do most of the design work, but I am keeping in mind ideally I want my developer to be able to take a first crack at an interface and be able to pull things off the shelf that we already have designed and I may need to go through and do a design pass on it to make it kind of pixel perfect or whatever. 

But it’s similar to when you’re thinking about architecting a good code base for the user experience side of things. You can think about it similarly where you kind of abstract, you take pieces that are reusable and you’re not repeating yourself over and over again. So depending on what your front end technologies are, if you’re using React for example, then you can start to build out a directory of React components that are kind of generically named that you can use and those would hopefully bundle in kind of the style parameters that you’re using. 

I love Tailwind CSS. There’s a reason why it’s become so wickedly popular I think is because it gives you sort of the fundamentals for building out your own design system and it kind of eliminates, at a minimum, it gives you sort of units for putting margin and padding on things, which seems small, but being able to just say, “We always use a margin three to space elements out in a form”, it’s a lot better than making sure that you put margin 13 pixels or whatever it would end up being. You end up with some 12 pixels in there and some 16 pixels. And if you’re just making these little visual tweaks all the time, then you’re ending up with a lot of inconsistency. So things like utility styles like Tailwind CSS can help you constrain the number of choices you’re making all the time.  

Rob Walling:
Very nice. You want to dive into your number two?  

Derrick Reimer:
Sure. Number two, this is sort of a little bit amorphous, but thought about, it’s just understanding how customers are actually using the product. Because I think I find myself occasionally getting bitten by this where it’s like I hear a use case and I kind of know fundamentally what we need to accomplish, but it’s so easy to get the flow wrong where you realize the way that people are actually expecting to use this is they want to… I’ll just give an example. People will often say, “Okay, I’m going to share a scheduling link with somebody and I want to propose sometimes”, but they usually go through the process of wanting to maybe edit the link and then go preview it and then from the preview page go and propose times. And if I don’t have a propose times button on the preview page, then I’m requiring them to click back through to a different part of the application to get to that thing. 

So there’s these friction points that that’s not a huge deal, but they can start to add up over time to where people gain this perception that your software is clunky or the things that they’re expecting to be there are not in the place that they’re expecting them to be. And a lot of times these insights don’t come unless you’re actually trying to get this qualitative data from customers. And there’s a few different ways that I’ve seen people do this. 

We used to use Full Story I think was that software. I mean it’s a little dicey from a privacy perspective. I think there’s some things you can do to black out the screen to hide personal information or whatever, but we used to literally have a TV screen up in the office, remember this?  

Rob Walling:
Yup.  

Derrick Reimer:
And you could just walk by and watch customers actually step through the interfaces. And it was so fascinating to see when people would just get stuck on a page and the cursor would kind of move around and you could tell they’re confused and that kind of stuff is gold for figuring out what are the friction points, how can you make this more intuitive?  

Rob Walling:
I like that one a lot. And I think you had said before we hit record, you’re like, “Some of these feel like they might be obvious or they’ve been said before” and it’s like, yeah, kind of in different ways, but this stuff bears repeating. It’s that important. It’s like we as technical folks, I don’t even mean developers, I just mean product people who know how to use products. We have a very high ability to just learn stuff really quickly and most of our users do not unless you’re serving other product people. And it’s so easy to forget that my dad doesn’t know when I say, “What’s your web browser?” He’s like, “Do you mean my Firefox”? He doesn’t know what that term means, and he’s 80 years old. So that’s just the way it is and we can easily forget that we have the curse of knowledge. 

I want to piggyback on that a little bit with something that’s similar but different. It’s not exactly what you said, and I want to give an example and the thing I’m trying to communicate or my point here has also been said on this podcast, but it’s listen to your customer’s problems but not their solutions. So learning how they talk about it, what they’re actually trying to do, what are you trying to do with that? What are you actually trying to do with that? What’s the big picture you’re trying to do with that? Because usually they’re not even in the right neighborhood of the application to do what they want to do and they want you to add a checkbox and a dropdown on this page. You’re like, this makes no sense to me. But it turns out, oh, if we go to this settings page, we can add something. 

They’re completely different side if you actually know what they want to do. And I want to bring up the example. One of my favorite examples, Derrick. All right, so if you log into Drip or if you use any type of email marketing software where you have a sequence of emails, we used to call them campaigns. And so you have a table view and let’s say you have five or six emails in a row and it’s like one is welcome and then second is, Hey, you downloaded a sample chapter in my book and the third is what did you think of the sample chapter? And they’re sent days apart on a schedule, right? Pretty simple. It’s in a lot of piece of software. We used to get a lot of requests for people saying in between the first email and the second email, can you add a button or an option to where I can put an if then L statement? 

If they have this tag then I want to send them a different email or skip the next one in the sequence or add a label or just do something. Can you add a checkbox that allows me write in there? And it was always like, this is interesting. This person obviously has a problem, they have a problem, but their solution is catastrophic. As a product person because there’s no way. If we listen to their solution, it would’ve just been a spaghetti code mess or a visual… Talk about technical debt. Visual technical debt is brutal. It’s hard to solve. And we heard those for months and months and we were like, I don’t know what the solution is, maybe we should build one of these things. I don’t know. And you remember what the solution was after a year of hearing these? It was building workflows.  

Derrick Reimer:
Workflows, yeah.  

Rob Walling:
It was completely different paradigm. It was us saying, wait a minute, we need a visual builder where people can put a box on a thing that sends an email and then have a split and if then, this and that. It was a whole other feature and we still kept the campaigns in the table view as well, right? The sequence because a lot of people were like, it’s a clean view and if you’re just sending stuff in a certain order, it’s really nice to have that sequence actually embedded in a workflow. There were competitors of ours where if you wanted to send 10 emails a day apart, remember you were adding 10 different boxes to this visual. It was very cumbersome and ours was actually a more elegant solution. So that’s what I want to bring up. There’s just one example. If you listen to this podcast, you’ve definitely heard that paradigm before.  

Derrick Reimer:
And I think that’s especially applicable to what Alan’s describing here where I think he’s kind of getting at, he’s working on a product that serves a lot of different kind of use cases. So you’re going to hear, especially in this case where you’re pretty horizontal, you’re going to hear really strong opinions from customers phrased in the way that they’re used to solving the problem. And the trickiest part about building a horizontal product is that you’re trying to look for what’s the abstraction between these kinds of disparate requests that are sort of pointing to the same thing but they’re pointing to it in a different way and can we figure out a solution that sort of satisfies the verticals that we want to hit on, but without it being too specific to one where you end up with something that only applies to a small number of customers. And it’s hard, it’s very difficult, but that’s the challenge.  

Rob Walling:
So to wrap up this topic, I actually have two more tactical things maybe that I want to throw out. One is pay more attention to naming than you think you should. Just naming anything that appears in a top nav, any label on anything. You and I used to sit in front of that whiteboard at the first Bitwise building in Fresno and when we were building automations and tags and events and labels and custom feed, all that stuff, we wrote it all out, whiteboard, whiteboard, we were in there for hours saying, “Okay, first what are the paradigms? Let’s get our head around them, how technically what they’re going to do, what are they going to do in the UI? Just mentally, all right, I think that makes sense.” Name value pairs versus things with a date, that’s a custom field versus an event. 

And then we said, “What do we call these? What do we call them?” And we would, hours just agonizing we’ve got to brainstorm. Well, what does the rest of the industry call them? Do we want to be in line with that? If MailChimp calls them this thing and Infusionsoft, which is now called Keap, I believe if they call them this thing, what if that’s a really bad name? Infusionsoft named their stuff poorly and so a lot of times was just like, that’s not actually what this is, but they did it and so people thought that that name meant that thing and so we were trying to stay in line with them like tags. Okay, everybody knows what a tag is.  

Derrick Reimer:
I’m actually curious if you feel like, because that was something I remember, what was it like a campaign in MailChimp was actually a broadcast and we called them broadcasts and then our campaigns were sequences and theirs were called what autoresponders or something?  

Rob Walling:
Yep.  

Derrick Reimer:
And I remember there was friction around that. I actually don’t know the answer to this. Do you regret how we chose to originally name things or do you think is there wisdom in just staying in line with the bad industry names for certain things or is it worth fighting back and naming well?  

Rob Walling:
Here’s the thing, I think the advantage Alan has is I don’t think there’s a MailChimp or a Salesforce in his space. I don’t know of one, so he probably has more flexibility than we did naming. But to answer your question directly, I couldn’t have lived with myself if we called broadcast emails campaigns. That is not what that is. But it would’ve bothered me every day I logged in because I would’ve been like, “Yeah, so in order to have MailChimp people get an easier way when they start using our product, we did this.” Now with that said, have you logged into Drip lately? You go to campaigns and then there’s a dropdown list with I think three different things and there’s single email campaigns, email sequence campaigns, and I believe it’s like a website campaign, something like that. I’m messing up the naming, but you get the idea. 

They grouped them under that same thing, probably because MailChimp and others did it. So I don’t know, man, this is that hard part of you’re a product person, you’re so opinionated and taste, I want to really love what we build, but it’s the intention with industry norms, ease of onboarding, ease of support. That’s exactly what we’re saying here, right?  

Derrick Reimer:
Yeah.  

Rob Walling:
All right, last thing I want to chime in. This is so tactical, so we’ll go real quick on it. Hiding features. If you have features that people request and you’re like, “Boy, only one vertical uses this, or even this whole screen or this whole section”, you can build versions of your application that just hide a bunch of stuff from certain people or only show it to a certain, there’s a feature flag. There’s a flag on their record. If I had three verticals or four verticals I was serving that really were different, we had a lot of verticals using Drip, but we figured out a way to generalize everything. 

If I really needed the naming to be different and let’s say realtors have clients and so-and-so has customers, whatever. It’s naming of labels or of top nav stuff, I would consider having just a different type of account and this is a realtor account versus a brick and mortar account. I don’t know, we didn’t have to do it, but having that bit. 

But the example that I actually want to bring up of hiding features is the feature we didn’t want to build but people were requesting it. You know what I’m going to say. RSS to email, I hate that. Where it’s like, well I have this blog and I’m publishing stuff anyway and I want an email to go out for each one. And it’s like that’s not a very good way to do email marketing, but a bunch of people wanted it, so we built it and only the people that had requested it, we checked checkbox and they saw it. And then over the course of years and we had a KB article about it, I think by the time we left 50 people had access to it out of tens of thousands of users.  

Derrick Reimer:
It was such an interesting one because yeah, if the demand had been lukewarm, we probably would’ve just said, “Sorry, we don’t have it.” But I feel like at the time, maybe it was like AWeber or one of those kind of older school ones, everybody who was using that publishing workflow relied on the RSS to email and it was just a hard blocker for them.  

Rob Walling:
Yep, for them to switch.  

Derrick Reimer:
I actually don’t know, maybe people are still using that, but I feel like RSS has sort of become less integral to the publishing workflow and now there’s Ghost and there’s the email sending platforms are trying to become more of the publishing platform also. So the trends have shifted and yeah, there probably still remains a small contingent of people who love that magical feature that just automatically sends emails when the RSS feed updates, but it was a real nightmare to maintain. q  

Rob Walling:
It was a pain. And so you might ask, “Well why did you build it then?” And it’s exactly what you said. We were literally losing deals over just that and they were significant deals. They were hundreds of dollars a month, obviously thousands of dollars in ACV at a time when we were, I think we built it when we were 20 to 30K MRR and I knew that there were thousands of dollars of MRR, at least a few thousand that we could get with it. And so it became that I don’t want to build this, but I am going to grit my teeth and build this, but I’m going to hide it just to try it. I just don’t don’t want to support it for what wound up being thousands, tens of thousands of people. I don’t want to promote it as a good email marketing practice. 

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With that, let’s roll into Alan’s second question.  

Allen King:
Also, do you have any suggestions on best practices to scale new products that serve different verticals once your main PMF has been secured and profitable?  

Rob Walling:
We’ve already talked a little bit about if it’s not an independent product, but actually keeping it as one how you might think about either generalizing things or having different account types that show different functionality. I will be honest upfront, I wouldn’t add multiple products unless I really, really, really needed to. I would hold off. This is that thing of translating my product into other languages, into Spanish and German. It’s just usually, can’t I just find more customers of this type? Have I maxed out the entire market? And I find that folks who want to launch additional products, it’s just so much more work than you think it is. So that’s kind of a blanket thing. I’m not saying don’t ever do it and we can still answer the question, but that’s kind of my overall opinion on this topic.  

Derrick Reimer:
Yeah, I think as we riff on this we can maybe come to some thoughts about how to do this well, but I agree that it sounds like he already acknowledges that it’s really difficult to serve a lot of different verticals and keep everybody happy at the same time. So my gut is just from a strategic standpoint as he’s thinking about, all right, we’re continuing to grow the business, we work really well for a bunch of these people. I’m sure he is finding some of these market segments are just, the customer type is just not the type that he wants to serve, hopefully. 

Hopefully he has some clarity around that even though they’re making it work, does it feel like you’re fighting against, they’re constantly kind of dissatisfied to the point where the way you want to take the product and the vision you have for it just doesn’t really seem to overlap with what this one particular use case is? Then I would urge you to consider just narrowing away from that and trying to identify who are the few, and hopefully you can find enough commonality between their use cases that you can have a roadmap that is generally speaking to the needs for all of those segments. So those are my initial thoughts on just narrowing focus a bit.  

Rob Walling:
Yeah, narrowing focus I think is what I would try to do as much as possible and to not serve. I mean by the time, again, if you’re serving four or five verticals but it’s all within the same app and generalizable, that’s fine, but it’s when you start, you have 10 different kind of use cases and you really need 10 different apps or this component. I think of HubSpot with modules and Salesforce and modules that you add on and remove. And maybe that’s the answer is that there truly, I was talking about having account types earlier that just hide and show stuff automatically, but that can easily turn into a paid add-on for this extra module and that’s a pattern that we see with enterprise software. 

To me it just feels complicated when you’re early, that feels complicated. I don’t see most companies below seven figure ARR trying to do that. And is that a sign that either you’re trying to do too much, you’re taking just a little too big of a bite at the apple or you’re not saying no to enough things? And just being like, “You know what, we have one customer type or two or three that work and unfortunately we’re just not going to serve this other market.” 

I don’t know, without more information. I obviously can’t give specific advice, but it’s an unusual pattern. There’s a little yellow flag for me if you’re trying to solve the problem in the way that you’re describing it where it’s like I want all these modules. And again, I’m assuming Alan’s early stage, we don’t know his revenue.  

Derrick Reimer:
I think what we kind of touched on earlier where if the main difference is just nomenclature for example, then that feels like something that’s solvable. Even if it’s like, I’ve seen products do this, I think Stripe does this with their checkout product where it’s like do you want the confirmation button to say purchase product or should it be subscribe or should it be, they have different ways to customize what the fulfillment button says to indicate the type of thing. It’s something we’ve considered with SavvyCal. We generally refer to things as meetings, but that’s not always the intention. It’s not always a meeting. Maybe think of it more like a session or I don’t know. There’s just different kind of ways to identify the thing and if that’s really the main difference, but all the other mechanics are the same, then that seems reasonable to try to figure out a way to allow that level of customization. 

But to just give another example, that’s something that we bump up against. We have a certain type of customer that loves our core functionality, but then they want this whole sort of buy a pack of time slots and then you can eat away at your balance of credits that you’ve purchased for a certain number of meetings and maybe you want those recurring and it starts to just spider out into this whole separate thing. It’s not something I’m necessarily opposed to doing, but that sort of thing we’ve really been careful in gathering customer requests and insights and really thinking hard about it. Can we see a world where it makes sense to add this onto the existing product? 

In some ways it almost feels like a completely separate product or a completely separate module where it’s like, okay, now you basically have sort of a commerce tab of some kind where you’re storing a lot of information about customers who have bought a certain number of time slots and now you need to manage state around that. So it’s a huge kind of build out that we’re very hesitant to do unless we feel like we can actually be competitive in that area and it won’t wreck the user experience for the rest of the product, which is a big consideration. You don’t have to feel like, it’s easy to get to the place where you used to be the simple elegant solution and now people start saying, “Well, it’s sure feeling complicated over there” and you never want to get to that place if you can at all help it.  

Rob Walling:
Yeah, and that’s where I think, I like that example you brought up because I think of Squarespace, which started off as a website builder, but now Squarespace Commerce is a big thing and it’s a decent shopping cart. It’s not the most sophisticated, but I use it to sell the SaaS playbook. So SaaSplaybook.com is hosted on Squarespace, and then I have other sites that don’t have commerce built in. And there’s a selling thing in the left nav, and if I click it and I don’t have the commerce, it just says, “Oh, you could sell stuff if you wanted, click here to upgrade. And if I have a cart and I have sales and I click in, it’s my whole dashboard. And you could easily make it that if I didn’t have selling, it just didn’t appear in the left now. That’d be the thing is how modular can you make this and I mean it goes without saying, keeping consistent UI and UX paradigms per the first thing to do.  

Derrick Reimer:
Yeah, I actually have one other thought that just occurred to me too. If you already have some existing patterns on how you build external integrations with other platforms. I don’t know if Alan has any of those at this point. I’m sure he does with calendars or whatever. So you think about how you generally build those into your product. In SavvyCal for example, we have on links, we have sort of a little automation or integrations area and you can basically install an external app. So if you want to send booking information over to HubSpot, you can click a little dropdown, say add an integration and then send contacts to HubSpot. And you install that and there’s a little bit of configuration, choose your account, connect to your HubSpot account or whatever. 

And now you have this sort of modular connection between a scheduling link and your CRM. And it is interesting to think about can you apply those similar patterns, similar ways you would think about integrating with external products, but do that with your own internal modules as well? And I think there’s a lot of patterns you can sort, even though I think you wouldn’t want a whole separate app that you log into. Ideally it would be a module of some kind inside of your core monolithic application, but can you treat it as you would almost an external integration if it’s separated enough?  

Rob Walling:
I think that’s a very elegant way to think about it. All right, let’s dive into Alan’s third and final question, but he actually sent me a relevant super bonus question that maybe if we have time, we’ll answer at the end.  

Allen King:
Lastly, does Derrick Reimer have any processes that he’d like to share for creating articles, change logs and updating content when it becomes dated? I’m a big fan of his knowledge base and his SavvyCal product as a whole. I love the work you both did on Drip and I’m very grateful for all the work you’ve done for our community. Looking forward to MicroConf this year. Thank you. Thank you. Thank you. Aloha from Hawaii. Peace, see you soon.  

Derrick Reimer:
So I use Help Scout’s knowledge base feature, which is pretty nice because it integrates deeply with their Beacon widget. So when someone clicks the help tab in SavvyCal, it opens the beacon and they can start to type a question and we can surface knowledge base articles to them. And if those don’t satisfy their question, then they can send an email to us. So that kind of integration is pretty nice. I think Alan’s using Intercom maybe, and I think they have a very similar type of thing. I took a peek at Alan’s knowledge base. It looks like you’re off to a really good start on that. 

But yeah, we generally, when building any feature of substance that’s not a tiny thing, I usually default to wanting to publish some kind of knowledge base article, something very specific to the feature. And the title is usually something, it’s not like I’m trying to describe an entire subsystem in one article. We keep them pretty granular, almost phrased like the answer to a question if someone was asking the question. And for most projects we just drop a ticket in the project management system for that. So the project’s not considered done until we have a little KB article. 

And I also have, speaking of component libraries, like a lot of the settings sections that we have, we just default to having a little info icon in the product that requires a URL to a KB article. So it’s a good forcing function for us to make sure that we have somewhere to send them if they were to click the info icon to learn more about the feature. And I also like to, I use Headway for our change log and we have a little widget in the app. It’s that standard pattern when there’s something new, it’s like a little red dot with a number on it and you can click it and it shows the little top five things in the change log. 

And that’s just a helpful way to surface new stuff. I mean, it’s hard to keep new customers abreast of features and also existing customers who aren’t necessarily receiving onboarding sequences and things, it’s hard to keep them aware of new stuff happening. So I feel like that’s a good touch point for sure. And similar to the KB articles, we generally as part of the launch plan for any feature, bias towards just dropping something in the change log. And I try to keep those really, really concise, like one or two sentences and I have a little template, so I usually try to include a screenshot, something that represents the feature. And yeah, it’s not a huge burden because we plan on keeping those short. Try to speak to how this improves the customer’s life. So describe the functionality of the feature and also why they should care. And just a couple sentences and yeah, that’s just kind of integrated into our process.  

Rob Walling:
Ladies and gentlemen, a masterclass in how to maintain your KB. Thank you, sir, we should record that, sell it as a course. It’s just a really good thorough answer. Very concise.  

Derrick Reimer:
And I think another note on keeping things up to date, I mean is that’s hard. I think there’s probably some stuff in our knowledge base that’s a little bit outdated and if it’s just small changes to the UI, I don’t think it is a huge stumbling block. So we are not necessarily keeping on top of every single screenshot to make sure it looks identical to the current UI. But what we do is empower support agents to make any changes to the knowledge base at any time. So if they are sharing a KB article, which we often do in support, we’ll explain how something works, but then we’ll also include a link to the knowledge base article. It usually has just a little bit more expansive detail than the specific response. I think our support guys are used to looking at the knowledge base article to make sure it’s relevant and if they notice something that’s out of date, they’re spending a lot of time in the product helping diagnose things for customers or explain things. 

So they usually will spot if something’s out of date and they can just grab a new screenshot. I like to use CleanShot, but there’s a bunch of different apps that’ll do that. That basically lets you take a screenshot and draw an arrow. That’s the default way that we do stuff. Put arrows on product screenshots, and those are really easy to replace. Things that are a lot harder is like if you have videos that have a lot of shots of the product, there’s a much higher cost to updating those. For that reason, we generally skew towards text and images, which are easier to update.  

Rob Walling:
In the early days, getting a loom or equivalent recorded for your support or for your KB is way faster to do. Over time, it is essentially a type of debt, video debt, documentation debt. We did that with Drip in the early days, right? Instead of writing a long KB article, I just recorded a video and it was great and it got us going, and then we had to go back and redo. Basically I paid someone to redo all those and basically turn the videos into written. And that’s why most KBs are written because the video is just hard to maintain. It doesn’t mean you shouldn’t do it, just know that you’re going to run into some issues down the line. 

I like what you pointed out about keeping things up to date that you kind of do the best you can because even again, when we left Drip, it was doing tens of millions a year with tens of thousands of customers and there was still stuff that was, it just gets out of date and you just don’t pick it up. So it’s one thing I would, you do your best and just know that there’s going to be stuff that’s out of date at any, it’s not going to be perfect and it doesn’t need to be, and you can still be wildly successful. 

All right, you want to take a crack at this fourth super bonus question about podcasting? I love talking about podcasting. Yeah.  

Derrick Reimer:
Oh, sure.  

Rob Walling:
His question is what magical wizardry secrets or dark, scary, painful pitfalls would you give to your virgin podcast selves before you got started actually podcasting? I have a couple of things that come to mind. One is, fewer people are going to listen to you or care about your podcast than you think, especially in the early days. And that’s a good thing because you’re not going to be very good when you start. I’m talking to me, by the way. Just to be clear, me 14 years ago, it’s just not, you can go back and listen to the first five episodes of this show. 

They’re not very good. We don’t have the energy, we’re not concise enough, there’s just a bunch of things wrong with it. The audio quality isn’t very good, et cetera, et cetera. And that’s okay because I put in the reps and eventually you get better. So fewer people listen to you in the early days. I stressed about it in the early days. “I’m on the mic, I’m so nervous, oh my God.” We’re all going to be nervous. It’s fine, realize that fewer people listen to you, and hopefully it helps you just be more of yourself. 

Second thing I want to say is the only way I know to get better at it, some people are naturally good at it. I will give them the first time they get on the mic. They’re amazing. Most people that I know are not, the only way I know to get better is to practice. It’s just to do a bunch of reps. And again, if you go back and listen to the show by the 10th or 15th episode, it’s like, “Oh, that’s not terrible.” By the 30th it’s like, “Ooh, these guys kind of know what they’re doing.” Practice and listening to other podcasters, I would say both because just doing the same thing over and over doesn’t make you better. But I would listen to other podcasts and say, “Ooh, this is very entertaining. All of a sudden, why am I entertained by this? Can I do that? Does it fit to adapt that approach to my show?” 

So practice and developing taste of what a good podcast is, I think is a thing. The third one that took me a very long time. In fact, if you go back even, I don’t know how many years, but you go back six or seven years, I still wasn’t doing this until again a few years back. But it’s to have just a little more energy than you naturally would. Like if you and I, Derrick were on this call and just talking about SavvyCal strategy or talking about Dungeons and Dragons and the nat 20 that Darren rolled last night on his persuasion check, we would just be talking and having fun. 

Somehow, when you do that and talk naturally, you sound subdued and with low energy. It’s just this weird thing that cameras and microphones do. And so now at this point, I naturally switch when I’m in front of a microphone, I talk just a little bit different than again, if you and I were hanging out. And it’s just a one notch above in energy. That was a very difficult and painful thing for me to, it was felt very unnatural, like I was faking it, like I was not being me, like I was being hyped. Why am I acting like this person who’s excited when I’m not actually excited when I say, “Welcome back to Startups For the Rest of Us. I’m your host, Rob Walling.” That’s how I say it now. 

But when I say it, I’m like, “Oh, that feels weird.” When I listen back, I’m like, “That’s a good intro.” And when I listened back to intros from 10 years ago, I’m like, “That intro sucks. It’s boring.” So there’s something about energy and learning how to channel it in a way that feels authentic. To me, I am not on this mic if I’m not being me and trying to be authentic, but you have to be a little more energetic than I think you would naturally.  

Derrick Reimer:
Yeah, I think because I’ve heard people go too far in that direction where it’s like, “Hey, I’m trying to have a radio voice”, and they talk that way the whole time and it’s like, “Ooh, that’s too much. That’s too much.”  

Rob Walling:
Yeah, it’s terrible. It’s not authentic.  

Derrick Reimer:
So it’s the authenticity piece. And I think, yeah, it does take practice to figure out how to do that. I mean, I don’t know any other way other than reps and listening back to yourself. I was a very reluctant podcaster from day one. I mean, Ben Ornstein can attest to this, that he basically had to pull teeth to get me to agree to just first start guesting with him. And then he was like, “You want to kind of do this for the foreseeable future?” And I was very hesitant because I didn’t feel like I had a natural knack for it. I didn’t think I sounded smart or funny on audio. It took a lot of getting past my own barriers, and it helped to start to hear from people like, “Hey, I really enjoyed, that was great.” And I was still not convinced for a long time that it was any good, but I just kind of persisted through it. 

I think this is sort of a hack, is having a co-host that you have good rapport with. Is it the kind of person you could just have a 30-minute-long phone conversation with and it would feel pretty natural, or is it stilted? Because if you can’t have a normal conversation, it’s going to be hard to have a good podcast recording together. Because a lot of times podcasts, especially interviews and even more conversational ones, they often end up being kind of like, I talk for a while, then I mute, and then you talk for a while, and then you mute. 

And I have found trying to steer it more towards feeling like a conversation, even if I’m responding with uh-huhs and things, that can all be cut in editing, so you don’t have to keep all the kind of conversational connective tissue in place. But I find that the more I do that in the course of a conversation over a podcast, the more authentic the edited version feels. And to that point, good editing. I would say, if you’re wanting to seriously produce a podcast, have an editor edit out the awkward pauses and things, because that makes a huge difference. I’ve listened to the unedited version of a podcast I’ve done, and then the edited versions, and it’s way better with good editing.  

Rob Walling:
That one didn’t even occur to me because editing is just something we’ve done from day one. And you used to edit a lot heavier in terms of cutting out ums and ahs. There are just a lot fewer ums and ahs these days. You do it long enough and you stop doing that. I want to revisit something that you touched on that is something I do and hadn’t occurred to me that I would need to say it, but I call it game tape. When I used to play football, ran track, we would watch tape of ourselves. This tape, it was, yes, it was on a video recorder of some sort. It was before digital. It was the nineties people. 

But we watched game tape and be like, “Ooh, yeah, I shouldn’t have done that. Oh, I could get better doing this.” To me, I’ve listened to every episode of every podcast I’ve ever recorded, even the interviews, as far as I know, as long as if people let me know that it went live, I go and listen to it. 

And I don’t do it as some ego thing or to say, “Ooh, aren’t I smart?” I actually listened to it to say, “Huh, I should have communicated that better.” Or, “They asked me a question that I didn’t know the answer to, and I can feel myself kind of vamping and I eventually usually get to something. But the first 60 seconds of that was a non-answer, so I’m going to do better next time.” And the other thing for me is I will listen back and be like, that was a really interesting framework that it just occurred to me on the show. I said it once, I never said it again. And it’s like, that should be in a book or that should be revisited on the podcast. I’ll actually pull nuggets out of old conversations that just happen to be on tape. And so listening to game tape, I think the number one reason is to get better. And you’re going to cringe the first few times for sure, but then you’re going to realize, “Okay, so I say um too much. How do I work on saying um less?”  

Derrick Reimer:
Yep. And something that I discovered too is that I would often leave a recording session feeling like that was terrible. And then I would go back and listen. And I usually had some takeaways on things to improve, like you just described, but I also usually came away with the feeling that that was not nearly as bad as I thought it was. And that was a reinforcing thing of, you know what, yeah, you’re not going to be perfect at it. Nobody is, but this is not as bad as your brain was telling yourself that it was.  

Rob Walling:
That’s a really good point. I agree with you there. Any TinySeed founder that comes on this show, I kind of force them in a nice way. I say, you need to listen to this interview because, and the reason I only do it for TinySeed founders is I feel like I have some sway over there. You know what I mean? Or some input into how they operate professionally. And so I’m sure not all of them do, but I really, really encourage people to do it, to listen to the interview, just to be like, oh, that part was good and that part was bad. And try to evaluate it and be honest. And of course, you cringe a little bit, but that’s how you get better.  

Derrick Reimer:
And to tie it back home too, the same applies for your product. Watching people use your product, you’re going to learn a ton, and it’s one of the most painful things you can ever do.  

Rob Walling:
That’s so painful. Dude. No doubt. Thanks for those questions, Alan. I hope, yeah, I hope our answers were helpful to you in your entrepreneurial journey. If you’re smart and you’re like Alan, then you’re coming to MicroConf in Atlanta here in just a couple months. It’s April 21st through the 23rd, and tickets are actually going pretty fast right now, and this will sell out. I don’t know when, I don’t know what month it’ll be, but if you’re considering it, you want to head to MicroConf.com and pick up your ticket. I’m speaking, Rand Fishkin, Asia Orangio. Lianna Patch is co-MCing with me, and I think we have another super special guest that Xander’s waiting to announce. So yeah, grab your tickets. And Derrick Reimer sir, thanks so much for taking the time today.  

Derrick Reimer:
Yeah, of course. Thanks for having me.  

Rob Walling:
Dropping mad knowledge. Folks want to keep up with you and they want to see the best scheduling link on the internet, they can go to SavvyCal.com and of course, follow you on Twitter @DerrickReimer.  

Derrick Reimer:
Indeed.  

Rob Walling:
Thanks again to Derrick for coming on the show. It’s always great to have him and hang out for 30 or 40 minutes. I hope this 30 or 40 minutes has provided you with some tactic or strategy or maybe some inspiration to think about building and growing your business this week. I’ll be back in your ears again next Tuesday. This is Rob Walling, signing off from episode 699.

Rob Walling:
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You guessed it, you’re listening to Startups for the Rest of Us. I’m your host, Rob Walling, and in this episode I sit down with Noah Kagan. He has launched, I forget the number, I think he says it in the interview, but five, seven-figure companies, it might be six, it’s a lot. And he has written a book called The Million Dollar Weekend. The book is available now in all formats, head to milliondollarweekend.com if you want to learn more. 

Before we dive into that, tickets for MicroConf US in Atlanta next April 2024 are on sale. This event will sell out. If you’re thinking about coming to Atlanta April 21st through the 23rd to see me co-host this event with Lianna Patch and to see speakers like myself, Rand Fishkin and several others, head to microconf.com/us to grab your ticket before they sell out. We had an amazing event just a few months ago in Denver and I expect the event in Atlanta to be no different. So, microconf.com/us to grab your ticket today. 

And with that, let’s dive right into my conversation with Noah. We’re actually going to join it mid-conversation. He and I had been chatting for, I don’t know, four or five minutes and I realized it was good content so I just hit record and we rolled right into it.  

Noah Kagan:
Yeah, we can talk about that. I don’t think people give enough thought to good decisions over long periods of time.  

Rob Walling:
Yeah.  

Noah Kagan:
Consistent. You can make a good decision once but then, if you have to do that in competitive landscapes over 10-year periods or longer, that’s challenging, man, it’s tough.  

Rob Walling:
There’s this quote from Steve Martin where he used to go see comedians, he has a great book called Life Standing Up, Born Standing Up.  

Noah Kagan:
It’s so good.  

Rob Walling:
Yeah, love it. And my favorite quote from there is it’s easy to be great, it’s hard to be consistent. Because he would come and see a comedian just blow the doors off one night and then, next month, they would just bomb for the next month. And he was like, “The hard part was getting good enough that he could consistently be amazing.” And I think that’s what you’re talking about, right?  

Noah Kagan:
Well, that’s what we were doing with sumo.com even. That went from zero to six and a half million ARR in maybe two years or three years. Super quick.  

Rob Walling:
Was it just email capture?  

Noah Kagan:
Yeah.  

Rob Walling:
Was it the widget?  

Noah Kagan:
So, the original idea-  

Rob Walling:
What was the product?  

Noah Kagan:
The original premise was appsumo.com has no MRR, ARR stuff, we want to try to have something recurring, what have we built for ourselves that we can sell to others. And so, the original vision for my partner, Chad, his idea was we should build the WordPress plugin store for websites. So, you can put in one plugin and you can have all the marketing tools you’ll need and then the idea is can we launch tools within two to four weeks and we launched a highlighter tool. We basically tried to go to any of the largest businesses and I think this is a good way to do business today. It’s like, “What are you spending a lot of money on? Can you automate that or create software on it?” 

So, we went to New York Times and all these giant websites and they had these different features like a highlighter and then email collection and we’re like, “Huh, we’re doing a lot of email collection,” and then we launched the popup called the email capture and it just exploded. The demand was so easy at that time.  

Rob Walling:
I remember this. This was back when Drip was just email capture, right? Drip was the first, all it was was an email capture widget and auto responders. And then we … That was 2013 and it wasn’t until 2014 that we actually became a competitor to Mailchimp. And Sumo was around that time, wasn’t it?  

Noah Kagan:
Yeah, it was SumoMe and then we bought the domain after seven years for a million and a half and then we launched so many different things. We had a heat map and then we had scroll boxes and then we had, I don’t know, a lot of different analytics around the plugin and it’s interesting in business. I think what ends up happening in most businesses, they try all these new things and then, over time, they’re like, “Oh, I should just do the thing that people really wanted me for.” They do all these things and, really, at the end of the day, it was just capture emails for small businesses or solopreneurs and Mailmunch kicked our ass with that because they were 20 bucks and OptinMonster and they did WordPress. 

And then we got, as you were talking about your business, we got our asses kicked because we tried to then do mid-market and then we try to do e-commerce. I think it’s really hard to stay consistent and just do the thing well that’s working. And that’s something I’ve definitely learned over, I guess, now 15, 20 years of startups.  

Rob Walling:
Yeah, I have too. Tell me about sumo.com, I had no idea you sold it. Is that public info?  

Noah Kagan:
It’s not public yet.  

Rob Walling:
Okay.  

Noah Kagan:
We just closed … When did we close? Maybe two weeks ago. This podcast, by the time it comes out, I’m thinking it’ll be public. Man, I was really disappointed in myself and I was really sad just how badly I ruined it.  

Rob Walling:
What happened?  

Noah Kagan:
Well, first, when you get a product that works, you know. People are like, “How do you know if you have product market fit?” You know. You don’t have to ask people to buy.  

Rob Walling:
100%. You don’t need to send a survey out about would you be not wanting to, you see the graphs. I’ve been there, dude, you’re like, “This is a rocket ship.”  

Noah Kagan:
Yeah, people are excited to pay you for a problem that you can clearly demonstrate value. Now, we launched the product and then things just worked and I think one of the key things that helped it worked is that the first year we were just free so we just had this insane install base. So, then we said, “Hey, pay 20 bucks a month,” it just crushed.  

Rob Walling:
I remember that. You had your JavaScript snippet on hundreds of thousands-  

Noah Kagan:
Every site.  

Rob Walling:
… of sites, I thought it was crazy.  

Noah Kagan:
Yeah, it was about a billion users a year so far is what we ended up getting it across the websites. But the mistake, I think, the learnings for others which is fascinating was deviating from who our core customer is. That’s probably the number one mistake we made which was we got to the six point a half million and then you’re like, “Well, I got to get bigger,” and it’s like, “Why?” “Because that’s what you’re supposed to do.” So, then we raise the prices from 20 bucks a month to a hundred to 500 to thousands because then we went upmarket. And then we’re like, “Well, Shopify’s getting bigger, let’s go over there. We can go help these customers.” And really, appsumo.com and our core customer is the solopreneur, that’s probably more of a blogger, an agency, a marketer, we’re not e-commerce people, that’s not our customer base. And so, ultimately, if we just would’ve stayed on that price point and that customer, it could be a $20 million ARR, maybe more in that space. 

And so, I think that was one. And then, secondly, me and my partner just had disagreement in visions and my approach to that or my response to that was to run away a little B. I just ran away from it versus, hey, let’s agree on what we really want to do here. And so, I call it the seagull theory, I basically was like … He wanted to go mid-market and e-comm and I was like, “I just like affordable products. That’s why we have appsumo.com, I like good deals. $20 a month, good price.” And we just disagreed on it and we could not get to the same page so I ran away and built SendFox and some other tools but I did the seagull theory or seagull mentality where I just flew over their team and I (beep) on them and complained about things and then flew away. 

And we all do that and it’s more how do you get aligned with your visions and then how do you actually be … Are you here to help or complain? If you’re complaining, just sit the (beep) out. Ideally, if you’re going to go be a part of it, go and be a part of the solution. So, that’s definitely been something to … What’s the heart? There’s a quote I like which is what’s the thing unsaid and say that and then work through those things.  

Rob Walling:
And so, did the business decline? You sold it, was it like, “We got it, we’re just going to walk away.”? Did it decline?  

Noah Kagan:
Oh, dude. So, we peaked at six and a half million and we were getting offers, I think, around 30 million. I think we’ve had a $30 million offer and I was like, “That would’ve been real nice, I would love to fly private.” And my goal was, by 50, to only fly private if I can, God willing. And it just started declining and you just … I’m sure other people who have companies feel this way, we tried everything. You’re like, “Okay, try to optimize pricing more, call all these customers,” and, because we were competing against so many bases, so many different competitors, we were just losing against all of them because they were either better at WordPress, better at mid-market or better over at Shopify and e-commerce. 

So, what we ended up doing was skeleton crew that software and just let it cash out over the next, probably, five years because it was still doing, what was it doing, it was two or 3 million a year and declining over years. And so, only until recently, we saw that the revenue to the server cost was getting close enough that we’re like, “It’s becoming a liability and maybe someone can do something with this.” So, it was an interesting experience selling it because it makes you face your mistakes and I do think it’s interesting, what are people’s intentions. Because I didn’t build AppSumo to sell it, I didn’t build AppSumo to go public, I don’t need that ego, I don’t want that money, I want to have a cool job, that’s it. 

And with Sumo, I think it was more just disappointing, really. Yeah, you can tell. I’m like, “Ah, it’s so frustrating,” I know, all of us have felt that and so we went out to different brokers. The selling process is really interesting, there’s a lot of different types of buyers. There’s these vulture buyers who are just actually really savvy, frankly. They’re really savvy and they’re totally-  

Rob Walling:
Yeah, value buyers.  

Noah Kagan:
They’re value buyers and it takes a long time to sell. You see these articles or tweets, yeah, I sold my thing two minutes, da, da, da on acquire.com or through Quiet Light Brokerage, it doesn’t happen that way. So, you put out a prospectus, you have to get your finances actually really up to date, which we didn’t do because we haven’t really touched that business in probably five years which was nice to cash out, but I’d say the bigger takeaway was how do you actually find someone more strategic. So, we were able to find, I don’t know if they want to be public yet, but a Wix, wordpress.com business that’s doing really well and they wanted email marketing and marketing tools. 

And what was really impressive about these guys, and maybe by the time they want to be public with it, they’re very patient. They’re like, “Yeah, we’ve been doing our SaaS business for 20 years and we are okay if this takes another 20 years for it to get SumoMe,” it’s what it’s called, “Back up.” And then the strategic buy, yeah, they were willing to pay, I think it was around one X ARR for the business.  

Rob Walling:
Okay. And it was a declining, basically, flatlined business at the time.  

Noah Kagan:
It’s still declining. It’s declining, give or take, one to 3% a month. So, I think we’re … I don’t know, I don’t want to share their number, now it’s their numbers but, yeah, it was declining. So, it was a seven figure sale which, to me, it was just sad, it was just sad. The promise of what it was, what it could have been and, ideally, we learn from those mistakes but it still hurts.  

Rob Walling:
It does. It feels like almost snatching defeat from the jaws of victory in a way. Because, when you launched, I remember how many people had that JavaScript installed and I thought, because we were tangentially competitive with Drip because we were an email capture widget as well, but then we pivoted into becoming a full-blown email marketing provider. But I remember being like, “He’s going to do it, this is great. There’s no way he can’t be successful with this.” And in fact, you were successful with it because, six and a half million, $30 million offer, is amazing, it’s what everybody would dream about. 

But it’s harder than people think. Even with momentum, even with good people, even with a smart founder, it’s hard to run a tech company for 10 or 20 years and not just ride it over the top.  

Noah Kagan:
Yeah, I think it’s that and being patient with the plateaus. Everyone hits plateaus. At AppSumo, appsumo.com, another product market fit … And to be clear, I’ve done a lot of business that did not work. With AppSumo, we build, we call them the originals, and I was telling you, tidycal.com, our Calendly alternative is crushing, it’s five X growth this year. And that’s one of about 10 products that we’ve launched on the original team. ShortySMS, fail, EmailBadge, fail, MeetFam, fail, SumoMarket, fail, all these different things that did not work. And that’s part of the business is that you got to keep experimenting. 

But AppSumo, my point that I was saying, with sumo.com, we launched 300,000 first year, second year, 3 million, third year, 4 million and then it was basically three to 5 million for the next three years and then this year it’ll be around 80 million, 13 years later. And there’s numerous facets to that but I think the big takeaway for others, make sure people super want what you have, stick with your customer. So, whoever the customer is, just stick with them and understand them. And I would say, with sumo.com, for others, what was interesting how we grew so fast, one … You know we bought a lot of WordPress plugins?  

Rob Walling:
I did know that.  

Noah Kagan:
That was probably one of our biggest hacks because you could buy … So, the idea is buy WordPress plugin and then promote Sumo but the takeaway there is what’s something that others aren’t doing that’s cheap or unexploited that you can take advantage of to get distribution to your ideal customer base. That was probably the biggest one and then personally reaching out, what you did, what ConvertKit did. We’d go to Tim, we’d go to Pat Flynn and be like, “We’ll do everything for you, you don’t have to do anything,” which became … It’s a little bit of the norm now in some of the SaaS.  

Rob Walling:
Yeah, but it was novel 10 years ago. And I think … What was the other thing you did? With AppSumo specific, I remember you sponsoring email newsletters before there were really sponsors of email newsletters. Right?  

Noah Kagan:
Yeah.  

Rob Walling:
I remember you being in some random newsletter and someone’s like, “Oh yeah, Noah offered me 500 bucks to post this here,” and I’m like, “This guy knows what he’s doing, man.”  

Noah Kagan:
That strategy, to be clear, and that’s something everyone go … Well, don’t compete with us but copy it in your respective areas but we still do that day, it’s the prefluencer strategy. And so, we do it at AppSumo, we have a team of five now dedicated to video ambassadors. And so, the idea is we go out, we give them a flat fee and then a percent of their sales. And ideally, you don’t want to go to people … I have a million subs on YouTube and I have a relatively sizable audience, don’t go to me, go to the person whose audience is hyper engaged on a really tight subject. And even if you want to be even more creative, go to different languages. So, we have people crushing it in Spanish, crushing it in Portuguese. And when we want to do things now, we have a hundred and then, by next year, maybe a thousand people that can be doing this. 

We did the same thing with sumo.com, I did the same thing at mint.com, we did the same thing with appsumo.com. That strategy works because, when you’re going to Facebook or Google Ads, you’re paying market rate and you want to figure out how to not pay market rate. So, a lot of these smaller people have much more affordable pricing for very unique and great promotion to the right audience.  

Rob Walling:
So, I want to talk about AppSumo a little more, I want to talk about YouTube, I want to talk about your book. So, for folks who are listening or watching, Million Dollar Weekend, it’s mdwbook.com, that’ll take you to … That’s currently taking you to the Amazon page, is that what it’s going to do?  

Noah Kagan:
Yeah, we did buy so by the time this episode comes out. You can go to milliondollarweekend.com and take the 48-hour challenge to change your life. We’ll get into that, we’ll get into that.  

Rob Walling:
Yeah, yeah, we’ll do it. We’re talking about AppSumo. So, I want to find out, because from the outside, I remember when you started it, I remember you did your first bundle back when you were doing bundles and 20% of the deals came from micropreneur.com, a referral link in a forum and so you reached out to me, we did a phone call. I remember I was standing out by my swimming pool, 2010, ’09, ’10, had to have been around then and you were like, “Dude, what is Micropreneur?” It’s a precursor to what MicroComf is today. But I was like, “Who is this guy?” And you’re like, “I was employee number 30 at Facebook, I’m doing these deals,” and it was just this crazy serendipity to be able to meet each other like that. 

But then AppSumo took off, you went to … I know you went from bundles to individual daily deals and you have the whole thing going now. You grew it, you put a CEO in charge and you moved on to other things and then you came back as CEO. Are you CEO of it today?  

Noah Kagan:
Yeah, I’m CEO.  

Rob Walling:
Okay. Tell me about that. Maybe that interim or what’s the story there? You stepped away from it, were you bored, did you want to do other things and then why did you come back.  

Noah Kagan:
So, we all get bored of success … It’s not success. We get bored of what’s working because it’s not exciting. I remember telling my business partner, I said, “Chad, how is it that you like to do all the things that are boring and I like all the novel stuff? I like starting new businesses.” He’s like, “Everyone likes starting new things, Noah, it’s not just you.” And I do believe it’s a superpower for consistency. Now that I’m 41, if you can stay consistent and keep doing what’s working, you will be successful, period. And it’s so easy to get distracted, it’s just so easy. Even yesterday, on our YouTube team, there’s a guy, Dylan, who just started, he’s like, “Hey, we should try this new thing,” and I was like, “What’s our goal? Don’t get distracted.” We lost a thousand dollars on this thing and I was like, “It’s a thousand-dollar lesson, let’s stay focused.” 

And with appsumo.com, I got bored because I didn’t want to keep doing … I remember, at the time, I felt like a used car salesman. I’ve got a deal, it’s a car, you got a good price. But it was just more I was bored and that’s something to work on, how to find something that you don’t get bored with like your wives or husbands. And there’s something interesting in that about what areas are we not getting bored at and how do I replicate that in my business which is what I get to do today. And we brought on Amin and we said, “Amin” … And I’ll give a little context there. We said, “Amin, make $120,000 a month revenue and don’t (beep) up, that’s all you have to do here. Don’t do anything creative.” 

And a lot of people have asked us, “How did you find an Amin which is the CEO for your business?” This is the big point. One, we spent a year recruiting and then we spent 18 months training, that’s literally the main part. People are like, “Oh, you’re going to” … It’s how much time are you putting into it and the way that most businesses, whether you’re team of one or a team of 10, AppSumo is a team of hundred, how does your bench look? So, if you look at a professional sports team, they all have benches and they all have minor leagues or colleges and so what does that look like in your own business and is it being developed or not. 

And so, at AppSumo, I’m pretty regularly thinking who’s the CEO of these different department, who’s the CEO and who’s going to just take it, not give him permission, I can see who’s taking it. And so, Amin took over and then we started SumoMe which became sumo.com and, over the years, we grew it while, Amin, for the first two years, he just did the exact same thing. It was a few deals a month to make 120,000 and then, once sumo.com actually broke even, we’re like, “Amin, you could do whatever you want now, we don’t have to worry about that money,” and then he was able to do a few things that I can talk about that was really able to help get AppSumo to where we are today. 

During that time period though, my partner took over Sumo, Amin took AppSumo and I just was like, “Oh, I guess I’m going to” … I was making two to $3 million a year, I’m just going to do a podcast and then I’m going to build some little side projects like sendfox.com, kingsumo.com at a charity bike ride. But this is probably the most shocking part for others and it’s interesting, it was the most unsatisfying three years of my life. And I didn’t want to come back to work, I don’t know, it was just … I wasn’t challenged, it wasn’t hard, it was nice little projects. And there was a big takeaway that I’ll share in that moment but I just felt lost. And that’s not a boohoo, by the way. 

If someone’s getting rich complaining about it, tell them to shut the hell up. I’m like, “Okay, well, why don’t you” … It’s better to be rich and complain than be poor and complain and so at least everyone should get to that opportunity. That is literally what Million Dollar Weekend is about, it’s you can create that for yourself. Not the complaining part but the being rich part. But the most fascinating thing was Amin’s running the business, everything’s pretty good, I’m doing these little tiny dabbles, let’s call them, and sumo.com is floundering so we folded that team back into AppSumo and doubled down on what was working which was AppSumo. And Amin called me one day, I’m on a bike ride across America and he quit. And my reaction was like, “Hey, do you mind waiting until I get back from my bike ride to quit?” 

And I think this is a cheat code in all startups, who do you call, who’s your advisors. Can you call Rob Walling? Can you call Noah Kagan? Can you call … I have Andrew Chen, we have Moody Glasgow, I have this guy Roger [inaudible 00:20:41] he’s the CEO of Indeed. We have elite advisors that you could actually pay a thousand dollars an hour or a little more and get access to 10,000-hour people. That’s such a super cheat code that people don’t use enough. So, I called Andrew and I called my buddy Adam from mybodytutor.com and Adam was like, “Who’s paying for the bike trip you’re on?” I’m like, “Well, AppSumo,” and he’s like, “Well, you should probably take care of your business and not go on a bike trip then.” 

So, I sent the bike home and flew home the next day from my bike ride and then I tried to find another CEO and ultimately I was like, “Okay, I guess I’m” … And this is what we were chatting a little bit before the show, I’m really just afraid, I’m afraid of who I can become, I’m afraid that I can actually do it. And there’s a really powerful thing for all of us is what’s the hardest thing we’re avoiding today in our lives. And for me, I didn’t want to (beep) up the business, and I thought only Amin can do it and I thought I got fired early in my career and that’s been a big part of my story. It’s these guys are better than me, there’s no way I can do it either. And I just had so much fear around it. And then I was like, “Okay, well, at least you go do the hardest thing possible,” and it’s been number one best business decision I’ve ever done  

Rob Walling:
To come back as CEO?  

Noah Kagan:
Yeah.  

Rob Walling:
Huh.  

Noah Kagan:
Yeah. And it’s also been the hardest. There’s definitely a lot of days where I’m like, “I am quitting this thing,” but the hardest thing tends to be the things you’re most proud of and the most rewarding. And I think everyone can reflect on that. When you had that moment when you were like, “Oh, this is tough and I’m putting in a lot of work,” but you’re also the most proud of those experiences. And everything I was doing before that, those three years when I was retired of sorts, I just wasn’t committing, I was just like, “All right, let me just dabble,” and I think that’s just such a good thing. What’s the hard thing, go commit to it and it ends up turning out to be, almost all the time, a good thing, you don’t regret those moments of working hard. And it’s been three years and I’ve definitely made a lot of mistakes, a lot of mistakes in that time period.  

Rob Walling:
And the business is doing 80 million a year now which is incredible. Where was it at when you took it over?  

Noah Kagan:
It was doing more.  

Rob Walling:
Was it really? Oh, my gosh.  

Noah Kagan:
Yeah.  

Rob Walling:
Oh, dude.  

Noah Kagan:
I know. I know you wanted some hero story-  

Rob Walling:
I did. I wanted you to say [inaudible 00:22:41] … Yup.  

Noah Kagan:
… Noah Kagan came and saved the business.  

Rob Walling:
Yeah.  

Noah Kagan:
Let me caveat that. So, in terms of our, and this is something that … Whenever you’re hearing people, you really got to understand what the actual numbers are. So, there’s gross sales, which is what I’m sharing, and then there’s net revenue which is your refunds and credits or whatever have you then you have net revenue. And you got to be mindful, okay, net revenue, what is gross profit around these numbers then what is your net operating margin, net operating income around that net revenue. And so, what was interesting is we had such a COVID bump, we had such a fat COVID bump, it was great. People wanted to work online, people wanted to save money and so it really was an advantage to us that came back down. And then I made the mistake thinking that I’m super smart, I think I’m bright, but I made another mistake where I didn’t listen to the customers again. 

So, we strategically said let’s not just do deals, let’s have us a marketplace of products. So, I ran really fast in the wrong direction. I think we can all … You know how that goes. It’s like, “Oh, this is a great idea, I know it’s going to work,” and a lot of these problems can be solved coming back to basic principles of, one, AppSumo motto is test and invest, that is an App … We have an AppSumo playbook and that’s one of our core principles which is did you test it before you invested. And when we break that, I’m like, “Oh, this marketplace where we go from 600 products to 13,000 is definitely going to work,” it didn’t and then we went from 15% margin to around 2% margin of the business.  

Rob Walling:
Oh.  

Noah Kagan:
Yeah.  

Rob Walling:
What happened? Hiring?  

Noah Kagan:
Yeah, we spent a million to do promotion for the marketplace. Our teammate costs per month, we call them teammates, not employees, today it’s about 1.2 million a month, I think we got it up to two and a half, 3 million. So, it was definitely not following some of the principles of test and invest and then double down which is part of our AppSumo playbook. And this year though, we’ve definitely gotten back up to, I think, around 12% margin, reduced a lot of the distractions that I was doing and then just focused on the core of the business, what our customers want. And again, I talk to customers and partners every month and they were all saying, “Hey, we don’t want this marketplace. We just want you choose the best deals possible of the latest tools for us, for solopreneurs.” 

And I think that’s just such a core thing for all business, who’s your customer, what do they really want and how do you just keep serving that and really understanding what they want and you could test it. Can you test it this weekend, can you test it with a little bit of money, can you test it with not having to spend a bunch and that’s possible. So, definitely, it’s been a fascinating experience and hard experience over these three years.  

Rob Walling:
I bet. And is that where it stands today? Is the core driver of AppSumo revenue and profit is these weekly deals?  

Noah Kagan:
Yeah, yeah.  

Rob Walling:
Okay, yeah. Back to the roots.  

Noah Kagan:
It’s insane. I will say, one of the key things, the key takeaway for others out there, and I talk about it in Million Dollar Weekend, is just market selection. Are you in a million dollar market? Are you in a thousand dollar market? Are you in a billion dollar market? And it was lucky, I would say, that we chose software 13 years ago and the amount of software there that’s gotten created went from, my first year, there’s probably 20 projects to choose from, 20 businesses to, now, there’s 10,000 different software products. And so, market selection is almost one of the most important things, how many people are there and are they willing to spend. 

And so, we have other business units now, we have the originals which is basically affordable alternatives to popular software. So, Mailchimp, we have SendFox, Calendly, we have tidycal.com.  

Rob Walling:
So, you have your Kirkland. These are your Kirkland brands, right? Your house brands, yeah.  

Noah Kagan:
We call them [inaudible 00:26:07] originals, yeah. So, we think of it as … And it’s our number one way of getting new customers in the AppSumo ecosystem, number one is our originals team. So, that’s a real big takeaway for others out there. Do you have some way to get the ideal customer into your product through something free? Maybe it’s through templates, PDFs, courses, whatever, or a paid product and so ours is TidyCal which brings in, I think, it’s around almost 25% of all new buyers come through TidyCal into the AppSumo ecosystem.  

Rob Walling:
It’s crazy.  

Noah Kagan:
Which is amazing, yeah.  

Rob Walling:
Yeah.  

Noah Kagan:
And a lot of our business now, the amount of sophistication is really interesting. Pricing sophistication, business intelligence sophistication, timing of deals, the structure of how we negotiate maybe rev share so our partners get more as they do better. There’s a lot of things that have compounded that we just were ignorant and just learning and improving over the past three years.  

Rob Walling:
And so, you’re CEO of AppSumo for the past three years and you have this YouTube channel that you … I’ve watched it because MicroConf, similarly, has doubled down on our YouTube channel. And we’re not at a million but we-  

Noah Kagan:
A lot of people.  

Rob Walling:
Yeah. We started during COVID, we had … What’s trip is we announced in 2019 we were going to do a lot more digital stuff because, before that, we were really an in-person event. And so, we said we’re going to do online, we’re going to have a video vault and we wound up launching it right as COVID happened, not because of COVID, it was already on the schedule. And we grew, it took us about a year to get to 10,000 subscribers and then we unlocked some stuff, some secret sauce, if you will, and the next 18 months took us to about … We’re at 70,000 subscribers as of yesterday which is good-  

Noah Kagan:
Congrats, dude.  

Rob Walling:
Thank you. It feels-  

Noah Kagan:
It’s a lot of people.  

Rob Walling:
It is. And our space is not nearly as big as yours because we are SaaS, we’re Indie Hackers and SaaS and so this market itself is a lot smaller but it feels really good to have that reach. But I’ve watched you do something similar, although at a different scale, add a zero, basically, to the numbers I just said. And watched you experiment with different video types and some would get more views and then you went all in on where you follow people onto their jets and you go to the neighborhoods and ask them how they became billionaires and all this and you’re flying all over the place in a, I’ll say a Mr. Beast way in a way that it feels very tightly produced and very deliberate, very intelligently thought through on how to optimize it.  

Noah Kagan:
Yeah.  

Rob Walling:
But I guess I have two questions around this. Why did you decide to do that on YouTube as opposed to some other medium? There’s social media and there’s podcasts and all this stuff. And did that coincide with you coming back as CEO of AppSumo? Were those two decisions made in tandem or were they not coupled and it’s just coincidence that they both happened at the same time?  

Noah Kagan:
Yeah. One thing I want to take a step back on for everyone out there is all of AppSumo started with me and $50 in a weekend. And the YouTube channel started the same, it was me shirtless, which you can see the video, in my 800-square-foot house where it’s falling down literally, and I just started with my phone and I just uploaded the video. And the reason I’m saying that is, from Million Dollar Weekend, the number one thing that people take away is this mindset of now not how. Don’t worry about the lighting, don’t … I’m in a $20,000 studio in my house now but I started with my phone that everyone has, everyone has the same exact phone as me and they can just record it and you get going. 

And over time now, AppSumo has a hundred people and we have two people dedicated to business intelligence. We have different pricing stuff that’s going on all the time, we have an email team of, maybe it’s five people, that is testing so many different things in email but that just started 50 bucks in a weekend and got going and you keep going with it and you keep improving it. And that’s the part that you have to get started right now with YouTube or whatever it is to get to those points. I think people want to just figure out the ending and it’s like, “Yeah, that’s only going to get there if you get going. You can’t cook if you’re not in the kitchen.” And so, I think that’s just such an important thing for anyone out there whether it’s a SaaS business, which me and you have done a lot of, or whether it’s a content business or whatnot. 

So, I think the key thing around the YouTube content, similar to AppSumo, is what’s the thing that’s working and how are you doing more of it. And so, for AppSumo, we analyze what product categories and we have an algorithm around what products our customers are excited about and then the business development team goes and gets a lot more of those. And so, with the YouTube channel, I commit to … It’s called the law of 100 which is do a hundred of it and then quit or make the decision to quit because we quit too soon. I quit my podcast, I’ve restarted it and I’ve stuck with it, but I quit it too soon, I quit it around 30 to 50 episodes. If I just would’ve got to the 100, I would be at really high numbers. 

And so, whatever you’re doing, a hundred sales, a hundred days, a hundred videos, a hundred emails, whatever it is, just get it to a hundred of them and then you can make a more informed decision and you can keep improving along the way. You can improve your cameras, you can improve the lighting, you can improve your scripts, you can improve your thumbnails, you can improve these different parts of your business. Now, I tried growing all the different social channels. So, when it happened, I tried YouTube and then Instagram and I hate TikTok so I don’t really do any TikTok, LinkedIn, Twitter and blog and all these channels can work to be clear, a podcast as well. 

All of them can work but what I recognize is who’s the customer I actually like, what channel do I have maybe some advantage in and which one has the opportunity because I want to have an unfair advantage. I don’t want to compete fairly, it’s just not-  

Rob Walling:
Of course not.  

Noah Kagan:
Yeah, I want to win where not others are winning and it’s easier for me to win. And so, as I noticed, I can’t do all six and win, I can do one and win. So, I told the team we’re not doing anything but YouTube and the reason I did that is I was trying all of them and I saw, okay, we’re doing this much work and here’s the reward, meaning views or whatnot, and I enjoyed making content there. And so, that’s what I’d recommend for others, it could be podcasts. I tried podcasts, growing it for years, it was really hard, there’s just only … And now, with YouTube and Shorts, you can grow a podcast in a different way but it’s still challenging, there’s only so much podcast time. And then Twitter, the audience isn’t growing. And LinkedIn, it’s very competitive with all these different agency people. And Instagram, I don’t take photos and I don’t do TikTok. And blogging, I think that amount of search and traffic is declining. All right, it leaves a site that gets what a billion people a month and it is a little harder as you get to higher levels of video. 

We’re spending on, per video, I don’t know, maybe 30,000 if you look at salaries and editing and thumbnail designer and consultants and all this different travel stuff and I can talk about that. But in terms of that, it was just basically doing that analysis and, I will say, we did three videos a week for 50 weeks and almost none of them were really getting views. And so, the point for everyone, besides the law of 100, is find something you just, even if it’s not working great, you’re still satisfied. I was still having fun, I was like, “Even if this is not getting an insane result, I’m still having fun.” And then we were basically desperate, we’re like, “Hey, we’re not really growing, why don’t we just try something 180?” 

And so, we tried a video, we saw it on Instagram or somewhere where a guy went to someone’s door and we’re like, “What if we made a whole video” … Because we were always curious what rich people did in these houses so I was like, “I’ll just go knock on their doors and ask what they do for a living.” And that video, it’s crazy because it took two full days of filming to get 10 minutes of content. It’s so interesting because people are like, “Oh, you just go knock on the door and” … Dude, most people will reject, most people say, “What are you”-  

Rob Walling:
Yeah. What are you doing at home?  

Noah Kagan:
Yeah. They’re like, “Please get the hell out of my house,” I would. I’m paranoid about people coming to my house. That video, through some desperation, frankly, because the ways I operate AppSumo, the ways I operate my book, the ways I’m operating our YouTube channels, we have one goal. And so, we were at 170,000 subs and we wanted to get to 250 and we had about 40 days left and so we just had to do something more extreme to see if we could get it to work and that video got it to a million views. And then you’ll see that almost, double down, this is another AppSumo motto, I think these ones people know but no one does. No one actually does it the way we do, very few do. They do something that works and then they go do new things. And this is part of Amin’s, I would say, influence with me which was, this is working, double down and, not just once, but until it stops working. 

So, now, there’s a lot more people copying or going on the streets asking rich people or knocking on doors so we’re shifting and I can talk more about that. But you can see the channel, it was jets, yachts, first class passengers, streets of New York, streets of Monaco, streets of Switzerland, streets of Austin, [inaudible 00:34:29] but it was working and so it was doing a lot more of that and I think that’s a really core part of any business. And whenever I meet entrepreneurs that made their business and growing fast or they’re asking how to grow it, I’m like, “How did you get your last customer? How’d you get your first customers? How much of that are you doing?” They’re like, “Oh, yeah, I’m not really doing as much of it,” “Just do that.” 

So, that’s been really the growth strategy content wise. And so, we basically just found two types of content that works like these asking super rich people or interviewing older billionaires, frankly, and asking them their regrets. And so, lately, it’s really just doubling down on that content.  

Rob Walling:
Does the YouTube channel feed … What’s the end goal of that because it’s not … We have 70,000 subscribers and our most popular videos maybe has 150,000 views and I see-  

Noah Kagan:
nice, man.  

Rob Walling:
Yeah, no, thanks. Again, add a zero to those numbers if you’re listening and that’s what Noah has. But I see the payments from YouTube and we don’t even break even on our production costs so I know you’re not doing it for that. So, would it-  

Noah Kagan:
We’re not breaking even.  

Rob Walling:
There’s no chance but what is-  

Noah Kagan:
No, we’re not breaking even.  

Rob Walling:
But is the feedback into AppSumo? Is that the …  

Noah Kagan:
So, there are businesses, we’re fortunate, I think, a lot of YouTube, similar to you in that a lot of YouTubers that have to have a course and then they have to sell these other things but we have a business, AppSumo, that’s our sponsor, really, for the channel and we don’t do a good job integrating at the end of the day. I do think that most businesses should have some presence and I think most people connect with a person, not a brand. If you think about Nike, Nike’s not popular because of the swoosh or their shoes are really that great, you connect with it because it’s Tiger or LeBron or whoever the person is. 

And so, I do think we’ve surveyed and around 30% of people that buy AppSumo who know who I am. They’re like, “Oh, I think I’ve seen your videos or I’ve seen the stuff.” And what we started doing this year and what we’re going to get better at is I’m like an affiliate of AppSumo and so I have tracking on my content and so how do we do things that drive either new signups or awareness or direct sales into AppSumo. But yes, it’s not well integrated in our business.  

Rob Walling:
Not yet but you can get there.  

Noah Kagan:
Well, I think people-  

Rob Walling:
You can build the audience and then you can do it.  

Noah Kagan:
Yeah, people seeing AppSumo logo, seeing me wear the AppSumo clothing, I think our business … Not I think. Our business is very direct marketing ROI based so how much are we spending and then how much are we making back within six months or less and everything. And we spend about a half a million dollars a month around that and it’s all profitable. The problem with that is that it doesn’t expose our brand. So, moving 2024, one of our core strategies is brand awareness. So, how do we get people who are solopreneurs or curiepreneurs or wantrapreneurs and getting them like, “Yeah, I need some help with tools or maybe education around getting my business going, I’m going to go to Rob and then maybe I’ll check out AppSumo and see what tools they have available.”  

Rob Walling:
Well, I want to get to your book because we’re wrapping up on time. So, milliondollarweekend.com, the book is Million Dollar Weekend and you cover a ton of topics, getting better at rejection, it’s all about being an entrepreneur. It’s about starting a company, as you say, a million-dollar company in a weekend. Idea generation, growth playbook, lifestyle design, even have a section about managing your calendar to be more productive. Folks can obviously check that out if they want to dive into those topics. 

What I’m curious to hear about you is a little more of a meta question because I’ve written three books plus an ebook, and I’m working on a fourth, in essence, with my wife about selling companies. Why a book now? You’ve been an entrepreneur for so long, people have known your name, why do it? Because writing a book is a pain in the ass, I don’t know if people-  

Noah Kagan:
Dude, it’s so hard.  

Rob Walling:
Brutal, huh? And there’s no feedback loop. You do a YouTube video and it goes live in a few weeks. You write a book, it’s (beep) two years, man. It’s like, “What is happening?”.  

Noah Kagan:
It was three years, I know. And people buy books, people don’t read books. And selling a book, right now, I’m personally messaging Facebook people. So, a lot of … I’m posting. We built a launch team. And I do think one of the things I’ve done well with AppSumo and YouTube, I reply to people one-on-one and that’s something I talk about in the book and something I still do in all of my businesses which is most businesses are actually comprised of individuals, customers like Ruben, one of our mutual friends from Bidsketch, I don’t know what his new thing is called.  

Rob Walling:
SignWell.  

Noah Kagan:
SignWell, yeah. Ruben was one of the first AppSumo customers. Thirteen years later, I DM him how’s the fam and I think we disconnect some of that and that’s been a part of the book where … I posted, “Hey, I’m building a launch team, is anyone interested?” and then I DM every single person who said yes, asked them to buy the book and I have them join our launch team and it’s individual and that’s missed out on. 

Now, in terms of the book itself, it’s about 15 years ago I thought of writing a book on a bike ride. I was like, “There’s no book out there.” I’m frustrated, I’ve never seen a book that I can give to my cousin, I can give to a friend, I can give to a reader, I can give to a customer of AppSumo that, if you want to get a business going and change your life in 48 hours, which everyone has, everyone has a weekend, there’s nothing that can do it. If there is, let me know, I wouldn’t have written the book, it would’ve saved me a bunch of time. And I thought that was an interesting opportunity. And so, that was 15 years ago but I wanted to start more of my own businesses, I wanted to test it to see if it actually worked for others and then I wanted to be at a place where I felt like I could really share the message with the best collaborators possible. 

It’s easy to write a book, it’s hard to write a great book, it’s nearly impossible to get a book to change someone’s life is what I’m noticing. And so, I’m doing everything possible to stack the deck, is the way I think about it, in that this book will impact people to … Maybe they don’t need to be a millionaire, I think everyone should be a millionaire, it’s awesome but maybe they want to be a grocerynaire, maybe they want enough grocery money for the weekend, maybe they want to just turn their interest in woodworking into an actual business or they want to create a software product or SaaS business but they’re a little bit stuck. And what was crazy about entrepreneurship is there’s an unlimited amount of content out there but, if it’s so unlimited, how come others aren’t succeeding in starting a business? That’s the main thing that needs to get solved. 

And so, the book starts off with fun and really overcoming the two giant things that hold everyone back from success in entrepreneurship which is starting and asking and how to make those enjoyable so that people can overcome them in a fun way and then use that with strategy to then lead it to million-dollar opportunities and getting businesses going in a very short period of time.  

Rob Walling:
And that’s the USP of the book is that it is, not just your take on entrepreneurship, but it is that very constrained timeline and it’s your approach that I’ve heard you talk about over the years about getting used to rejection, about seeking problems before … People don’t want solutions, they want … What is it? They don’t want software, they want a solution to their problem or something like that, they don’t want another tool.  

Noah Kagan:
Yeah, no one cares about your idea.  

Rob Walling:
Yeah. No, yeah, idea.  

Noah Kagan:
Yeah, no one cares about your idea.  

Rob Walling:
Totally. So, I have this quote, when entrepreneurs come to me now, I say don’t tell me your idea, tell me what problem it solves and for whom. That’s my new thing, I say that to everybody and so it’s just right in line. What’s funny, dude, is, 15 years ago, I don’t know that we would’ve thought this but, as you progress, we all come up with these similar learnings. The rules of thumb are similar across SaaS, across entrepreneurship, across a jerky company that you talk about starting in a weekend as a challenge, right?  

Noah Kagan:
Well, your audience is a lot of SaaS people, I’ll just tell you openly. So, the frustration I have today, I hate QuickBooks, I hate DocuSign … Shout out, SignWell, Ruben, you can check out. But I also hate subscriptions and I hate Loom. Well, I think Loom is cool but it’s five videos and then you can’t use it anymore, you have to pay and I’m like, “Hmm.” So, what most people do now is that they’ll consume more content, they’ll wait on the sidelines, they’ll do more research and what you can actually do is find out, within 48 hours, everyone has a weekend, whether if you have a family and kids like you, whether you’re single, whether you’re old, whatever that is, it’s non-exclusive to actually see if you can get that business started. 

And so, for instance, let’s say you wanted to start a SignWell competitor which we’re evaluating … Shout out, Ruben. I love you, man. But I hate subscriptions and I’m frustrated with DocuSign and doing PDFs so can we create something like that at AppSumo within a very short period of time. And the idea for everyone, if you want to do that, you could literally message people and say, “Hey, I’m building a software today. It’s going to do this, here’s what to expect, can you prepay me for an early version of it?” And you could truly find out whether you can get customers for that or not. 

And then, if you get customers, great, go build it. And if you can’t, then you can try to understand in a conversation what problems they do have that they’d be excited to pay you for. That’s the fun, frankly, and the interesting challenge of entrepreneurship.  

Rob Walling:
Noah Kagan, thanks so much for joining me on the show, man. Folks who want to keep up with you, youtube.com/noahkagan, milliondollarweekend.com?  

Noah Kagan:
Yeah, I think it’s YouTube.com … Just go to milliondollarweekend.com, we have a 48-hour challenge in there, there’s a ton of resources, you can see my income streams which a lot of people like to see and there’s just a lot of things to get going. People have so much fear and you really can change your life in a short period of time without money and that’s the part that people are like, “Oh, (beep) maybe I can do these things.” Same as me being a CEO, I was like, “I don’t know if I can actually do this,” and the reality is we can, we just have to go get started.  

Rob Walling:
The dirty secret is, most of us, a good chunk of the time, feel like we’re in over our head and are scared.  

Noah Kagan:
Yeah, it doesn’t matter how successful or famous or rich you are. And I do believe and I see it all the time still that there’s a lot of ordinary people doing really well and the only difference between them and someone else is that they’re starting. And through that iteration of posting the video, of seeing if they can get someone to buy, of doing a service, of maybe even using a WordPress plugin as their software provider or using backend AI stuff, ChatGPT, whatever that is and then getting the customer, it’s like, “Huh, what else can I take this?”  

Rob Walling:
It’s an awesome note to leave it on, man. Thanks again for joining me. Thanks again to Noah for joining me on the show. It’s great to have you back this and every week. I’m really enjoying recording this podcast again, it’s so fun to be reinvigorated after taking time off over the holidays. And I’m approaching episode 700, hoping to cook up something special or maybe it’s just another episode and it happens to have two zeroes at the end of the number. This is Rob Walling signing off from episode 698.

Rob Walling:
I’m Rob Walling and you’re listening to Startups For the Rest of Us. In this episode, I talk through seven predictions SaaS bootstrappers should pay attention to in 2024. Obviously, these predictions might apply if you’re not bootstrapping, if you’ve raised a small amount of funding. I just like to differentiate between those folks who are trying to raise $50-million dollars in venture capital versus those of us in the capital efficient bootstrapped and mostly bootstrapped space. 

After I run through these predictions, I’m going to go back at the end of the episode, and I’m going to go back as far as I can stomach, probably 2013, and look at predictions that I made every year and go through them quickly, and talk about whether I think they were accurate. What we’ll find is a lot of them weren’t accurate the year I made them, but within a year or two those things came to fruition. It was really fascinating looking back at give-or-take 10 years of predictions. I believe there was a year or two that I didn’t make predictions, but I’ll save that for the end of the episode in case that is less interesting to you. 

In addition, if you’re interested in chatting with me at an upcoming MicroConf local or you have a strategy or a framework that you think other bootstrap SaaS founders should hear, we are always looking for founders to come out and share their expertise during all of our conferences and events. If you’re interested, head to MicroConf.com/pitches and share your idea with us. 

So with that, let’s dive right in to my first prediction, and it’s that in 2024 there is going to be a lot of opportunity in vertical SaaS. This is more of a continuation of a trend that I’m already seeing. If you look at the TinySeed companies that we have funded, we’re just over 151 at the time of this recording, a lot of them serve a particular vertical. So when people say, “Vertical SaaS, what does that mean?” Well, an example of accounting software designed specifically for construction firms. Construction firms is the vertical, it’s the niche. Versus something like QuickBooks that can serve every vertical, or think of podcast hosting or podcast recording, that is a horizontal SaaS, meaning you can use it in any niche. 

Just a few examples of companies that we’ve funded in the most recent batch, one is called TrainerMetrics, which focuses on fitness centers. We have Tiny Easy out of New Zealand that focuses on … Think of CAD software, but it’s for tiny house designers. Talk about an interesting and relatively small vertical. Retail Metrics is analytics for independent brick-and-mortar retailers. Mawi is project management for constructions firms across Latin America, and on and on. You can go to TinySeed.com/portfolio anytime to see these companies. 

But if you look across our entire portfolio, Anar and I have been talking about running the numbers, the majority of the companies we’ve funded, and I think it’s the supermajority to be honest, a majority is 51% and a supermajority is more than two-thirds, 67%, I think it’s even more than that, if I were to guess, I think it’s in the 75% to 80% range, of companies that we have funded over the past several years have been vertical SaaS. There’s so many reasons why vertical SaaS is more optimal, especially for bootstrappers. I called a lot of them out in Start Small, Stay Small back in 2010 and I talk about why it’s good to go niche, is really what I say there. But these days almost all of those reasons still apply about it being less competitive, about you don’t need to be the best marketer in the world, you just need to be a better marketer than the other folks in your niche. So I see this trend of vertical SaaS alive and well and continuing strong in 2024. 

My second prediction ties back to a company I just named, is that SaaS will continue to grow, and it will even pick up space in emerging markets. For instance, Latin America. That’s an area where we, TinySeed, have funded several companies who are serving the Latin American market. The interesting thing that we found is their price points often have to be lower just because of the way currency works and salaries, and the reason you can hire a developer for half the price or a third of the price down there is the cost of living is lower, so folks don’t have as much money, disposable income, and businesses don’t have as much disposable income. But it’s also much easier to market, or it can be cheaper to market and find customers, and it is also cheaper to hire in those areas. 

So if you’re based in Costa Rica, as Mawi is, they have a real advantage over a US company trying to come in and compete against them to sell to Costa Rican and other Latin American construction firms. They also know the space, they know the geography and everything, but we’ve seen a really nice uptick in B2B SaaS applicants who are in these more verging spaces. If you don’t know the space the first time you see it, you think, “Oh, well the money’s not going to be there. The price points aren’t going to be there.” But the further we’ve gotten into it, we’ve seen there’s real opportunity there. So that’s why I made it prediction number two. 

My third prediction is about Twitter. You might call it X, I still call it Twitter. Let’s be honest, Twitter is really struggling. The valuation is way down, it’s I would say under-monetized, it’s just not making enough money. It has been tanking, maybe in the bootstrap SaaS space or what do you call it, VC Twitter and tech journalist Twitter, it is still, I won’t say booming, but it’s still alive. In most other spaces, like all the other verticals that used to use it, I think of Dave Kellett who is the cartoonist I often mention on Comic Lab, he says it’s pretty much a ghost town now and it doesn’t work for them. So these comic artists that are trying to promote their self-published work, it’s completely useless in essence. 

So Twitter is by all accounts struggling, and my prediction for 2024 is that there is going to be a big moment of reckoning. One guess is that the bank or the equity funds that lent Elon the money to buy it will basically call it due and foreclose and repossess. You don’t know what their contracts say, but there’s going to be something there where they’re not going to just want to sit on this asset that is basically depreciating quickly. I forget what the exact valuation difference is between when he bought it and what it is now, but it’s really pretty scary. So there is a reckoning coming for that. 

I think that Twitter might change hands again in 2024, that is probably the ultimate prediction. Whether it’s that the bank forces a sale, and I say the bank, it’s the financiers, I don’t know if it’s technically a bank, but the financiers that lent Elon the money are going to call it due and either take it over or force a foreclosure sale to someone else, or Elon’s going to decide it’s not the problem. I don’t know. But I think Twitter is going to have a major event probably resulting in a change of ownership. 

My fourth prediction for SaaS bootstrappers this year is that subscription fatigue will continue to be a thing in B2C, but it will not be a big deal with B2B. You’re going to see complaints on Twitter, you’re going to see complaints on Facebook, whatever other social media you’re on, but it’s not actually going to make that big of a difference, because that’s what I’m seeing across the 171 investments I’ve made is that SaaS is still very much alive and well. It is the best business model on the planet, and that subscriptions are very much alive and well, and that businesses are happy to pay for it if you can take the headache away from them, you can solve a real pain point for them. 

So in other words, I’m saying that Once, which 37signals is doing at Once.com where they’re saying, “We’re going to write software that you don’t pay a subscription for.” That Once will not penetrate, that’s my prediction, they will not penetrate past the handful of nerdy developers who basically want to manage their own servers. I never want to go back there. I don’t want to build software like that, I don’t want to install and manage software like that. That is how we did it 20 years ago, and while I think there is a very small niche of people who will embrace that and say, “Yay. I get to pay a one-time fee and not have to subscribe.” I think that subscription fatigue in B2B, while we may hear people complain about it, is not going to broadly impact the adoption of SaaS. 

My fifth prediction is that no-code/low-code will professionalize, is the word I’m using, and what I don’t mean to say it’s not professional today, because obviously there are professional no-code and low-code developers, and obviously these technologies run a lot of apps, but what I mean is no-code and low-code are behind code in the sense of what about code review tools? What about unit testing? It’s funny, when I say “code review tools,” well, there isn’t any code, but you get the idea. There are automations that can be complex, and the reason you have code review is to make sure the code is going to work as expected and it’s maintainable. 

So what about no-code review? No-code and low-code review tools. What about the ability to have unit tests, version control to be able to roll back to prior versions? That is something that came about with development that these things … Version control before, I think the first time I ever used it was probably 2001 or ’02, and before then I know it exists, I know Visual Source have existed before then, I know that there was version control, but it just wasn’t as broadly used as it is now. It’s just an expectation. Unit testing really become prominent until, my memory is it was about ’06, ’07 maybe, and code review was not really a thing that we did back in the day. Actually, we did have to start doing it, I worked at a credit card company and for PCI compliance another developer had to look at your code before you checked it in. I remember that being such a big shift, and this was again in the aughts. 

So these things emerged over time, and code had been written since, what is it, the ’50s or the ’60s? Where we started writing codes with punch cards, I say “we,” I’m not that old, but where folks started writing code and code review unit testing and version control was nowhere near as ubiquitous as it is today. No-code and low-code have the advantage of being able to learn from code, from the software development best practices and the patterns that have been developed over decades. No-code, low-code have the advantage of seeing the arrows in the back of the pioneers, of folks who wrote code for many, many years. I think that will accelerate the professionalization of no-code and low-code. 

My sixth prediction is about AI, and really it’s that the obvious AI stuff, we’re going to be through that this year. We’re going to start to get into novel and surprising integrations with a lot of the tools we use, or novel and surprising new apps that aren’t just a thing that again is so obvious to build. So I think additionally, automated customer service is going to be something that’s going to continue to not be very good. I think it will get better with AI, but I was super frustrated on a website, I think it was a bank website the other day, and I just couldn’t get to a representative, they just wouldn’t let me. I was like, “I know that AI can not do this for me.” 

So I think it’s going to continue to roll out and it’s going to be spotty and not great, but I do think that AI is going to help us as software people build faster. It’s already doing that with Copilot, but it’s going to continue to accelerate the development of software. I don’t believe AI is going to take a bunch of developer jobs, I think this is the rising tide that raises all the boats. Unless you’re a real … developer and you don’t or you resist AI, or you don’t want to use it, it becomes this tool of augmentation that I think developers and builders and product people and all of us are smart to adopt. 

But my hope is that the hype of it … When we look back at mobile apps in the Apple App Store in what, was that ’08, ’09 as that emerged? Then SaaS started to become a thing, there was crypto around this time and blockchain was maybe 2015, ’16 as it first started. There was even the drone, there was VR/AR, there’s all these waves where people rush in, and AI certainly has been that for what, 12, 15 months now? Each of these has their lifecycle, and they have the hype cycle at the start, then it dies down, and sometimes, like I believe with AR and VR, it becomes cool. It’s a neat thing that you can use, although VR and AR are still not as widely adopted as we’ll see in some of my predictions a little later in this episode, but other times people just don’t adopt it. 

So blockchain, is that actually being used? If blockchain went away today, are there major parts of our world that wouldn’t function? Probably not. The adoption there just didn’t happen, versus mobile phones where the mobile app store and all the mobile apps that we have have just become parts of our daily life, for better or worse. The hype cycle, you can argue was it real? Did it change everything? It did change everything, but it just becomes a day-to-day thing. That is my expectation of AI in 2024, there will continue to a ton of VC money being pumped into it. It’s the new wave that allow more efficiency to be done. I hope the hype cycle does continue so much that tens of millions or billions, I should say tens of billions of dollars keep getting pumped in. Maybe they do. But I think AI is certainly here to stay, and this year we will see I think a continuation of that argument of like, “Is it hype? Is it not?” But see some real productivity gains and some real pushes forward. 

I know some people say like, “I’m not even using ChatGPT anymore.” You know what? I don’t use it that much either, but when I use it it has been really helpful to me. I was doing a brainstorming session with ChatGPT earlier today and it gave me a ton of new ideas and thoughts that I just couldn’t find in a search engine, and just weren’t in my head. When I framed the prompt very specifically, it gave me some great information. So I’m neither bullish nor bearish on AI, I think in general it’s a good thing. I think there’s obviously some ethical issues, and I think people just get a little too bent out of shape in both directions in terms of hating it or love it. I also felt that way about NFTs, blockchain, all that. But all that said, AI’s going to be a thing, and people are still going to be talking about it throughout 2024. 

My seventh and final prediction for 2024, I have no inside information, I think Stripe’s going to finally go public. The question is what does that mean for SaaS companies? Does it mean that they get on that 90-day cycle, that quarterly earnings treadmill, which I believe is the reason they haven’t gone public is because the Collison brothers are very smart and they don’t want to be on that push. They want to be more in control of their company, and the ability to manage it and not have to have Wall Street constantly breathing down your neck to tell you, “Increase earnings. Increase earnings. Increase earnings.” Because that of course leads to what are they going to do, raise their rates? There’s all kinds of things that they can start doing that are really going to piss people off. 

So that’s my big question is if they go public, will they be under the gun? So Google in the early days, if I remember, I remember them going public around 2000, 2001, you can correct me if I’m wrong, but in the early days I remember them thumbing their nose at the whole, “Every quarter has to be better than the last quarter.” But eventually that happened, maybe it took five years, maybe it took 10 years, I don’t actually remember. I haven’t owned Google stock since probably the first year it was public, so I don’t pay that much attention to it, but I do remember there was a shift from the “Don’t be evil” to “Wow, we’re really going to squeeze the money out of everybody.” When they really started screwing a lot of the organic SEOs and they started removing data from the ability to be able to rank in Google. It was obvious it was a big cash grab. 

So the question is if Stripe goes public, as I’m predicting, will that start now? Or will Stripe be able to hold out for a year or three years, five years before the cash grab mode that Wall Street eventually forces almost every company into begins? 

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All right, so those are my seven predictions for bootstrappers in 2024. Now I’m going to go back, I’m going to roll the calendar back to late 2012 where I made predictions for 2013, and I’m going to zip through these and just talk about whether I think they were right, wrong or right eventually. Like the person who predicts five of the last two recessions, eventually you’ll be right if you keep saying the stock market’s going to go down. So in 2012, making predictions for 2013, I predicted it would be the year of Pinterest, which it may or may not have been, but it’s just irrelevant now. So it’s funny to read that. 

That WordPress will become more prominent, and I would say that’s pretty dead on. Think about this, this is 11 years ago, WordPress was a going concern, but this is like a year into WP Engine, it was still very early and we didn’t realize that WordPress would run, I won’t say the majority of the internet, but it runs a hell of a lot of the internet. So I think that was a prediction that was pretty good. Subscription WordPress plugins will start, I do think this has happened, although it’s not as ubiquitous as I would have thought. I knew a lot of WordPress developers back then and I knew folks were tired of the one-time model and they were trying to get into the annual subscriptions, and some tried to get into monthly as well. It’s definitely happening now more than it was back then, but it has not grown like wildfire. 

Another prediction was more Google changes will hammer the SEOs, and I don’t just mean algorithm updates. That was me talking about Google just cash grabbing, so this is around the time that was happening. That was true, yeah. I stand by that one. Finally, for 2013 I predicted the startup bubble would become more evident, inflated valuations will continue to rise, either it bursting this year or next. That absolutely did not happen. The only bursting, there was a public market bursting for a month in January of 2016, and then up, up, up, up until 2020, and there was a big drop for a very short time. Then it just went up, up, up, and the big one that has actually lasted in the startup space is 2022. So think about how far off I was on that. I often find bear predictions, meaning predicting something’s going to go down, are usually way too early. 

So now let’s look at 2014 predictions. Ooh, this is where I start talking about Twitter, and so many of these were accurate they were just early. So my first one is Twitter will become profitable and piss off its users in the process, but it’s a solid opportunity for paid placement and promotion. So I don’t think Twitter has ever become a solid opportunity for paid placement and promotion, Twitter didn’t become profitable for several years after this, and I do not believe Twitter became profitable in 2014, but it was profitable for a couple years after it went public. I believe it was public for eight years before Elon Musk took it private, is that right? It was profitable for two of those years. So I’m a little early, but I think it’s a reasonable prediction. 

I predicted an Apple Watch would be released, although I called it the iWatch, and the Apple Watch did not release until 2015, so a little early with that one. I think there were some rumors or some buzz, so think of this it’s like December of 2013 I’m making this prediction. Next one for 2014 was that Concierge will become a requirement for SaaS apps in crowded markets. This was before White Glove, Concierge, customer success was just becoming a thing, so I 100% stand by this. It’s a little easy, I was on the bleeding edge of it as a SaaS founder myself and someone who interacts with a lot of folks through the podcast and through MicroConf, but I definitely called that shot and I stand by it. 

Kickstarter will have a major multimillion dollar failure. I don’t remember if that happened. I know there have been several of them, but who knows if it happened in 2014? Apple will continue to lose market share. I think I meant the iPhone. As history repeats itself 30 years later, that did not happen. Integration marketing will pick up steam as more companies offer APIs and become more connected, and I do think that has been a thing. I think that’s happened and integration marketing has continue to serve bootstrapped and mostly bootstrapped SaaS founders. 

All right, for 2015, Twitter will become, I made the same prediction again, Twitter will become profitable and piss off its users in the process. I figured if I wasn’t right one year, because obviously I wasn’t right in 2014, so I made the same prediction again for ’15. Another prediction was that video ads, namely YouTube ads, will be a big opportunity for cheap clicks in 2015. Man, I know YouTube ads are a still an opportunity for cheap clicks today. So I would say that’s a win. VR will actually be a hit with the early adopters set in 2015. There’s no way that happened. Until the Oculus Quest 2, even now is VR a hit? I play because my kids play and I want to be in games and hanging out with them, but I think it’s still iffy. It’s nowhere near as ubiquitous as I think … I think when I put “hit” in quotes, I think I envisioned more adoption than we’re seeing today. It’s getting there, it’s just taking a long time. 

Another prediction was we’ll see our first sub, $100 a year, consumer level, five terabyte cloud storage service. No idea if that took place. Certainly predicting that storage is going to get cheaper was a pretty safe bet, Walling. So maybe make yours a little more ambitious next time. The last prediction was we’ll start seeing 3D printers in houses of our early adopters friends. I think that one’s accurate, I certainly got a 3D printer probably in 2015 or ’16, we’re now on our second one, and we’ve had them around for years and loved them. I know a lot of my friends now have resin printers and the PLA printers, I’d say I was right about this one eventually. 

For 2016, I like these, so the first one is single round bootstrapping, AKA fund-strapping. That’s what I have in the notes for that outline. Single round bootstrapping, AKA fund-strapping, will become a common viable option. What can I say? I’m like Babe Ruth calling shots here. Yes, did it happen? That was my 2016 prediction, did it happen in 2016? Not as much as it happened in the years following for sure, since I think I make this prediction again in 2018 after I left Drip and started talking about why we started TinySeed. I started TinySeed because I wanted to take advantage of what I was already seeing in the space. I didn’t say I was seeing that in the space because I started TinySeed. I think some people get that backwards. We’ll hear from me about this type of prediction again in a minute. 

Another prediction for 2016, Twitter will become less relevant, returning to its roots, journalists and the Technorati, ripe for an acquisition. So again, that didn’t happen in ’16, but it happened eventually. Public markets continue to value companies lower than their private valuations, and that was true, although I think there was, what do you call it, an aversion for a while. But then certainly by the time we were at 2018 to now, maybe not to now, but to 2021 that was happening. Companies would go public at a lower valuation than their private valuations. My last prediction for 2016 was that VR will actually be a hit with the early adopter set in 2016. No, didn’t happen. 

Four predictions for 2017, there will be another high profile acquisition in the bootstrapped space. I don’t think that happened. I remember revisiting this one and saying it didn’t happen. Second one is startup crowdfunding will fizzle out. Lower and startups will use it, the best will continue to use their network and angel list. Kind of, right? I guess these days the fundraising environment isn’t great, and we saw a few higher profile crowdfunding rounds of startups, and frankly those haven’t gone well, at least the ones that are in our Twitter-sphere. So I would say, again, this was a 2017 prediction, so it’s now seven years ago, but that is what has played out in my opinion. 

I predicted a 20% or more US stock market correction, which did not happen. That didn’t happen until what, 2020? Then it recovered, and then really I think it was 2022 when that happened again. My fourth and final prediction for ’17 was the first consumer purchased package would legally be delivered with unmanned drones somewhere in the world. I believe I was making that prediction in December of 2017, and I think it happened that month. So I got a little lucky, also I was probably reading some rumor tables when I made that prediction. 

Now for 2018, 2018 will be the year of non-institutional startup funding, angels crowdfunding and ICOs. That was probably pretty close. AI machine learning will continue to be marketed as the next big thing, but will not deliver again in 2018. That was accurate. Now, eventually it delivered obviously. What would you say? It was 2022 I think was when OpenAI had the big ChatGPT reveal, but this one I was correct. I predicted in 2018 there would be an enormous crash in Bitcoin’s valuation, but longterm I was still bullish. Oh, yeah. Boy, there was a massive crash, so it was up around, it looks like it peaked almost at 20,000 in December of 2017, and it was down to 17,000 and then in ’18 it’s like 12,000 at the start of the year, and by the end of the year Bitcoin was at 3250 give or take. There’s peaks in the valleys, but so this one was correct. Me being still bullish I would say is correct, because as I’m recording this Bitcoin is at 44,000. So that was a good call back in ’18. 

My fourth prediction for 2018 was cryptocurrencies will be regulated by several large governments. I don’t remember if that happened in ’18, but it certainly started … We started seeing that in ’18, ’19 and ’20, and it would impact … A country would ban mining, and then they would regulate it in a certain way, and we would see the price of Bitcoin and other cryptocurrencies impacted. 

All right, now for 2019, four predictions. Crypto will have ups and downs, but no major boom in 2019, but I’m still bullish longterm. I think that was correct. When I look at the chart, it really was relatively flat. I guess it entered 2019 at $3400 US, and it left … No, I was incorrect. I guess it ended at $7000 US. So it did have, it doubled, it actually went higher than that. So bullish longterm, probably correct, at least at that point. But no major boom was not correct. 

I predicted 2019 would be the year of AR. Way early, still hasn’t happened. I predicted there’d be a Facebook antitrust issue, and there would be a rise of a new social network, and I would say no on the Facebook antitrust, and there were some legal stuff but not in the way I was thinking, and the rise of a new social network I believe … Did TikTok start getting big in ’19? So there’s a chance that I actually predicted that. I had no idea it would be TikTok, but I figured there’d be room for another. My other 2019 prediction, no joke, that Twitter would be acquired. So I predicted it in 2019 and it happened in 2022, so only three short years too early. 

Okay, just one more year, because I skipped 2020, ’22 and ’23 for making predictions. So my ’24 predictions were at the start of this episode, and 2021 predictions, which think about this, I’m making predictions December of 2020 so COVID is still rampant and vaccine’s not out until, I think it got vaccinated May of ’21, and some people got a couple months earlier, but really the vaccine was not available, no in-person events, sheltering in place, all kinds of madness. So I’m making that prediction with that in mind, and it looks like I have five predictions. 

First is privacy concerns will transform email marketing back to a more primitive form, and I would say not really. I know that open rates are harder to see now, I know that there’s a lot of stuff making email marketing harder, but I don’t think it’s been transformed. I still think it’s valuable and super viable, so I’d say no on this. I predicted in-person events will resume in ’21 with adjustments like social distancing and masks. That was true, that was me being optimistic because running MicroConf, I really wanted to get back to in-person events, and we started running them in I think it was September of 2021. So that did happen that year. 

My third prediction was that funding in the bootstrap startup space would continue to be de-stigmatized, I guess was it still stigmatized in 2020? I know that just a lot more people were open to it, and people don’t judge bootstrappers for raising money like they used to. They would call them sellouts and that kind of stuff, and I just don’t see that happening. My fourth prediction was that VR will become mainstream, probably not. I use it and I have friends who use it and I use it with my kids and we play games and this and that, but I just don’t think I would describe it as mainstream. 

My fifth and final prediction for 2021 was that the world will get back to normal faster than expected post COVID-19. My memory is that’s not true. I remember it taking a long time for things to feel back to normal, that even once we started traveling I was vaccinated, I wore masks. Having masks at events, it just didn’t make it feel normal. It took a long, long time for that to revert back. It was still six, nine, 12 months after that I remember people still … There would still be enough people at events wearing masks that it felt weird to be at the events, and it reminded you that COVID-19 was still such a thing. So I would say I did not hit the nail on the head with that prediction. 

If you made it this far, this is truly just a nostalgia play for me to walk back through some of these and to think, “What was the world like in 2012?” Or was it December 2011? Yeah, December 2012 when I’m making these predictions for 2013, to say WordPress is going to be prominent, and to look back now and be like, “Oh, my gosh. Doesn’t it run almost 50% of the internet?” But it really was different back then, it’s hard to get back in that head space. I don’t plan to do this every year, every prediction episode by the way, I just happened to stumble upon these old prediction episodes and I know that we used to revisit them every year, we’d make a prediction and then we would, in the next prediction episode, we would look back and rate our predictions, and then we’d make the new ones. I think I’ll probably just start planning to do that rather than going through all this. 

But nonetheless, I enjoyed the walk down memory lane. Thanks for joining me this week and every week. If you keep listening, I’ll keep recording these. My eighth prediction for 2024 is that I’ll ship 52 episodes of this podcast to you this year. This is Rob Walling signing off from episode 697.

Rob Walling:
Welcome back to Startups for the Rest of Us, I’m your host, Rob Walling, today I’m joined by fan favorite, Ruben Gamez, and we talk about some things that Ruben has learned over the past year or so running SignWell. As I talk about in the episode, SignWell is an electronic signature app that’s growing quickly, he’s having a lot of success with it. But in this episode we talk about product market fit, and maybe some of the myths around it, or the oversimplifications that we use when we talk about it. And I really like the way Ruben thinks about everything he talks about on a day-to-day basis, but especially things like product market fit. That kicks off the conversation, and I think you’ll find it enlightening if you’ve never experienced it, or if you’ve never thought about it in the way that Ruben talks about. Then we talk about doing sales as an introvert, because I get that question on the podcast a lot. 

Then we dig into decision making, that was an audible, that just came up in the middle of the episode, but I let this one run long because I really enjoyed that piece of it, and I think it’s something that more founders can learn from, and it’s not something that I’ve talked about much on the podcast in the past. And finally, we talk about hiring, getting good at it, why Ruben is so good at it, and why he has a high hit rate, and has built teams that get stuff done without a lot of drama. Do you want to reach tens of thousands of potential customers? Between our MicroConf events, Startups for the Rest of Us, our YouTube channel, our email newsletter, and all the other ways we interact with our large and growing and loyal audience of startup founders, we have a lot of options for you to reach B2B SaaS founders with your product or service. Drop us an email at sponsors@microconf.com. 

And one more thing. We’ve recently reopened the doors for our online community, MicroConf Connect. MicroConf Connect is our virtual hallway track. It’s a vibrant community of SaaS founders helping each other, and discussing wins, challenges, and frankly, how to grow faster. A couple months ago we paused new signups to improve the platform based on your requests. With MicroConf Connect 2.0, we’re rolling out three membership tiers packed with new perks, like weekly coworking, exclusive discounts, a searchable content library, and more. Whether you’ve been a member of Connect or not, you really should check it out, microconfconnect.com. And with that, let’s dive into our conversation. Ruben Gamez, thanks so much for joining me again.  

Ruben Gamez:
Hey, thanks for the invite. Good to be back.  

Rob Walling:
Yeah, back by popular demand. I’m really on a roll here, I had Asia Orangio on a few weeks ago, plan to have Derrick Reimer on in a couple weeks, and Ruben Gamez, I believe the three of you tend to be the most requested guests on this show.  

Ruben Gamez:
Nice.  

Rob Walling:
So, glad you took time here in the new year to hang out with me. In the last several times you’ve come on, we’ve answered listener questions, and obviously there’s plenty in the mailbag, so to speak, but I really wanted to have you talk about some learnings that you’ve had over the past year or two, and catch people up. It’s been a while since we’ve just riffed on things. In the past, you and I have talked about product market fit, about rules of thumb, about funnel metrics, about sale… All kinds of stuff. And you and I chat fairly regularly, once a month, and have for years. 

And so, I have some idea of what you’ve been going through, and I feel like your learnings, and the way… Not just your learnings, it’s the way you communicate them, is very unique in our space. And I sent a tweet out the other day, someone was saying, maybe you should have Ruben back on the show, or they were just saying, Ruben is the goat. And I said, yeah, his doing to talking about it ratio is like 10 to one, right? It’s like 10 x what everyone else on the internet is. And so, that’s why I want to just take the whole episode today to talk through product market fit, is one thing, and we’re going to talk about how product market fit is not as simple as we all make it out to be. That almost every conversation around it, including a lot of stuff I say on the show is it isn’t abstraction, it’s an oversimplification. 

And I want to take the first part to dig into that. And then, I want to talk about, you’re a developer, an introverted developer, for that matter, but you’ve done a lot of sales calls, and you’ve closed big deals. And I want to hear how you’ve done that, and how you’ve thought about it, as well as building your sales team. And you’re one of the most gifted bootstrap founders I know at building a team. At hiring in a very, I’m going to say picky, and I mean that as a compliment. You’re a good judge of people, and you have a high hit rate, a high rate of hiring people who work out. And when people don’t work out, you let them go. And those are unusual skills, I will say, in the bootstrap space. So, sound good?  

Ruben Gamez:
Yep, sounds good.  

Rob Walling:
Let’s dive in, man. So, first point is going to be around product market fit, but I think the overarching topic really that you said is, the whole goal of what you’ve been working on for the past year with product and positioning and all this stuff is increasing your average revenue per customer. And to catch people up, you run SignWell, signwell.com, which is an electronic signature platform, and you have both the web app side and the API side. And so, I guess the first question is, okay, so you’re trying to increase average revenue per customer. Why?  

Ruben Gamez:
Oh, good question. Because, generally speaking, customers that pay more, churn less. It’s easier to grow, it’s easier to grow faster that way, you just need a lot less customers. And depending on the category, it can actually be less competitive. In our category, it tends to be less competitive because we deal with e-signatures and e-sign laws, and once you start to go up the market, there’s more on the compliance and security side. So, there are less companies, the bar is higher, which means the competitive set, when companies are in that group where they need to work with a company that has these things, is just smaller. So, for all those reasons are why we’re focusing on customers with, they’re going to move that up for us.  

Rob Walling:
And to be clear, we’re going to call the user facing interface, your web app, and then the API is, people know the difference between those two. So, there’s two separate offerings, and your pricing is very different for them. So, the web app, you have a free plan, you have a personal plan that’s $8 a month if paid annually, and a business plan, $24 a month if paid annually. So, these are relatively low price points. Versus on the API side… We’re not talking about you raising prices five or $10 a month. We’re talking about several hundred if not thousands, literally thousands a month on the API side.  

Ruben Gamez:
Yes. Also, even on the web app side, on that side of things, we’re just selling to larger teams. So, even though the per user price is smaller, we’re bringing in companies that are… More and more companies that are in the 50, 70, 100, 200 user price point.  

Rob Walling:
Got it. And this is what I want to talk about, because you said this right before we hit record, and it’s something that I don’t think is talked about at all, about product market fit specifically. And you said, yeah, we found product market fit or strong product market fit, because you and I both know it’s not a binary, it’s a continuum. I like to think of it as a number of one to a hundred, or zero to a hundred, or whatever. And you mentioned that with the web app, we found product market fit a while ago with individuals, but we didn’t have it with teams. 

With 50, 60, 70, 100 person teams, we just didn’t have the features. So then you were looking for product market fit on the web app team side, the enterprise side, and then you moved over to the API, which does even bigger deals, and you realize, oh, there’s not just one product market fit continuum, there’s all these different use cases. And with each individual one, we have to then go find it. So, we’re going to talk through each of those mental models, or each of those phases, but to kick us off in true Startups For the Rest of Us fashion, I want to ask you, when did you know on the web app side that you had product market fit?  

Ruben Gamez:
Yeah. For us, it became… All the numbers just started to look different at some point. Our conversion numbers improved, our retention numbers, churn was lower, and growth… Ultimately, really what you’re looking for, and what you’re looking at is growth and word of mouth to pick up in a way to where it feels like, we’ve talked about this before, but you’re being pulled. And more, it started for us to feel like we’re having to keep up instead of having to grind and work and push. The feeling was different from that side of things, and this is just broadly talking about it. But it was generalizing it was just more for the segment to where it’s self-serve, it’s smaller, it’s like one person, or just a couple, two or three, and we serve those really, really, really well. It was still not that great of a solution for teams, for even 10, 15, 20 person teams, and that was pretty rough. 

So, not just that, but even on the smaller side, this is the thing with the horizontal product, it’s hard to… You’re just serving so many different industries that if you look and you say, okay, what are our top 10 best customers? We want more of those. You start to break them down. One of the easier things to do with some products is that you could just put them on a spreadsheet by revenue, and then you start to see, okay, so these are all this industry, or this vertical, or whatever, this customer segment. For a horizontal product, a lot of times it just looks like it’s all over the place. It’s like you might have accounting firms here, and then education, nonprofits and all sorts of different industries, so it can be hard to work with if you’re looking at it from that perspective. 

So then, we really started focusing on use cases, and you’ll find that, oh, education and HR, internal corporate, have this use case of they need to send one document to many people, they batch documents. So then, you can group industries that way. That’s how we look at our top customers by use case, even our bottom customers, performing an audit. What are the worst performing? Which ones use it the most frequently, but also the least frequently? And what percentage of the bottom, of the worst performing, make up our revenue? So, just to get a feel for are we adding features that are really meant for that bottom tier, or are we moving in the right direction?  

Rob Walling:
Yeah. And what I want to call out here is, the oversimplification that I was referring to, that I think everyone’s guilty of, and certainly me on this podcast is… Well, I should say, the most common oversimplification is acting like product market fit is binary. I have it, or I don’t, and it’s just has never been my experience, it’s not how it works. But let’s say it’s a continuum, the way that I like about how you described it is even with that, it’s a different product market fit with individual customer segments. And that customer segment might be a vertical, it might be hair salons versus realtors versus bankers versus SaaS founders. But as you said, when you’re a horizontal SaaS it’s oftentimes, the verticals, it’s not verticals, it’s use cases. It’s HR, as you said, HR teams at almost any company that’s 100, 200, 300 people might have the same use case, it doesn’t matter what vertical they’re in, because they all have the same need to hire people and send out things in bulk. And that’s something I think is undercommunicated, or just isn’t talked about enough in our space.  

Ruben Gamez:
Yeah. I think use cases are a big deal. They matter for not just product market fit and figuring out what features to build, but also who to go after, how to do even your onboarding and what that first run experience is like. Because if you think about it, we have use cases to where some industries just have more of a sales type use case, to where it’s simple documents, they just need signatures and that’s it. And the time to value for those is really fast. So, that means they also do one-off documents, and maybe in high frequency or whatever. 

And that just looks very different from an onboarding perspective, from a sales perspective, from the features that you’re going to build point of view, compared to ones where maybe they’re collecting a lot of data, maybe in the government forms, HR stuff. So then, if you think about the time to value, that’s longer because they have to set up documents with all these fields, they have to set up templates, they have to maybe do a bunch of training and all this stuff. And that also tends to change how we reach them and how we sell to them.  

Rob Walling:
And then you mentioned on the API side, which is a much higher ticket sale, so to speak, just higher annual contract values, that even on that side there are multiple use cases and you had to work on them in order, individually. Talk about patience. This is where folks either who have never started a SaaS, don’t realize how long it takes and how patient you have to be, or people who are working on a SaaS, and are like, but I’ve been coding for months and we’re just not going to get there. It is taking longer than [inaudible 00:13:49]. It always takes way, way longer than you thought. Because you think that you understand this full view, and usually, once you get to the top of that little summit, which is I’ll say product market fit with one use case, you realize, oh, there’s four others that I now have to build and it’s different features, and each one is a few months, so I’m talking eight months of… Or whatever, I’m making up numbers. 

But that’s usually how it feels. But the other thing you said was the further up market you move, the fewer prospects you have, the fewer customers you have, the less data you have to work with to make these hard decisions with incomplete information. So my question, because I get this a lot on the podcast, is how do you make those decisions? It’s not like it’s super clear cut. In retrospect, when the biopic is made about you and SignWell, and Aaron Sorkin’s going to write it, in retrospect, it’s going to be so clear that from day one you knew the exact vision and where you were headed.  

Ruben Gamez:
But yeah, looking back, it’s always super clear.  

Rob Walling:
It is. So, what is it? How are you making… You’re in the midst of this. How are you making those decisions these days?  

Ruben Gamez:
Yeah. So, you are working with less data, typically the more you charge, that’s just the game. So, because of that, you have to go deeper with each of these customers, and understand them at a… You have the time and you don’t have a lot of data by volume, but you can get a lot of data by depth.  

Rob Walling:
Qualitative versus quantitative, right?  

Ruben Gamez:
Yeah, exactly. Right. And you do qualitative even with volume, but a little bit less. And you’re just depending on the numbers being so high for you to understand the full picture, but you don’t have that. So, you have to talk to customers, and you have to sell, and you have to do… Every time you’re interacting with a company, you have to try and gather data that will help you in this journey. And then afterwards, after you sell them, not be afraid to come back and be like, I’ve done this on the API side and with teams, with companies that we don’t have a lot of, but we know this is a good customer and we want more of. 

And it’s just, we need to understand as much as possible about this customer, how they buy, what triggered the process of buying? Who was involved? What were the conversations like behind the scenes? What are the things that are important to them? What were they worried about when getting started? All this stuff. And the more you know that way, the less people you need before you start to see patterns. You still are, it’s not going to be perfectly clear or anything like that, but that helps a lot.  

Rob Walling:
And so, you take this qualitative data, and at a certain point you just have to go with your gut?  

Ruben Gamez:
Yeah. So, part of it is where you want to go with the company, and what you see. Because you just have to think about, okay, we like this type of company, how many more are there out there? And the thing that I think a lot of people miss is, oh, what can we… So, everyone focuses on what they can build. It’s like how long is it going to take to add these features, and will there be more companies that will use these features? How big of a market is it? And the thing that I think a lot of companies overlook is that they don’t think about how easily they can reach them. How good are they at selling to them? You can have a really big market. So, for us, an example is real estate. And this was early on, we saw, okay, this use case has more of a back and forth than some of the other use cases. 

So, this back and forth is good for real estate and a couple other industries, but not many. That market is really big. There are e-sign companies that are just real estate. And looking into it, and researching it, there were things that I found that I felt made it harder for us to reach them and sell to them. And it’s not necessarily just a general thing, these are hard to… Sometimes it’s like that, like, oh, they don’t like to talk to sales, and they don’t hang out online, and all this stuff. 

But none of that matters if you have a way to reach them, like, well, we have good relationships with these organizations, or a superpower for us and our company DNA is doing this, which is a really good way of reaching. We didn’t have any of that. So, because of that, plus we were lacking just expertise when it comes to how to sell to real estate, and how all that works, it didn’t feel like a good… And we purposely ignored building those features. And we still have a good amount of real estate customers, but there’s a lot more that we can do to better serve that. And we don’t have product market fit for that segment, those types of back and forth use cases.  

Rob Walling:
And you’re just willing to do it.  

Ruben Gamez:
And we’re okay. You have to decide, right? Prioritizing is a huge part of it. There’s only so much you can do, you have to pick and you have to decide what you’re doing. But also, what you’re not going to do.  

Rob Walling:
That’s the big conversation. And I don’t like it when people use Steve Jobs and Basecamp as examples, Apple and Basecamp. But there is a quote that I like from Steve Jobs, where, I believe he told it… It’s Tim Cook quoting Steve Jobs. And he said, one of the things he told me is, “There will always be 1000 good ideas, and usually we have time to pursue one.” And so for every 100 or 1000, or whatever the number is, we have to say no. And we will be great by saying no to a lot of things. And that’s prioritization. Maybe he’s overstating it, maybe he’s exaggerating, you can do more than one thing. But the reality is, in the final days of Drip when I was there, we’re doing tens of millions a year in revenue, team is 125 people or so, we were getting close to… I think it was about 175, 200 feature requests per month. How many can you… Even with 18 engineers?  

Ruben Gamez:
Yeah, you’re not going to do all that. Right. No, you have to find a way to prioritize. Yeah.  

Rob Walling:
Exactly. And some of it, and some people prioritize with a spreadsheet, and some people like Derrick and I, and I think you prioritize, I would say it’s gut feel that acts I’m just either smarter than I am, or I just don’t give a (censored), and I’m just picking (censored) randomly with a dartboard. It’s neither of those. It is this, there’s an intuitive side, there’s a right and a left brain, a creative and a science side. And the spreadsheet is science, and that’s helpful. And so, when we hired the first product person, aside from Derrick and I, he was very much in that left brain spreadsheet mode, and that balanced us out a bit, I will say. It was helpful to have that voice on the product side, but that voice alone would not have made the right decisions.  

Ruben Gamez:
Yeah, gut’s a really big part of it. I always felt like you’re really good at this, and you’re decisive, and you tend to more often make, from what I’ve seen, make the right decisions. Not always, but a lot of the time. More than a lot of other people. One thing that I’ve wondered about the way that you do it is, do you feel like you’ve developed that, or are there things that you’ve done or that you do that you think help improve that gut feel?  

Rob Walling:
This is a really good question, and I’ve thought a lot about it, because one of the talks that I’ve given is… I forget exactly the title, but I gave it in South Dakota a few months ago. And it’s nine traits of the best startup founders. And I couch it in the first five minutes of, here’s what I define as best. I’ve invested 171 companies, I have pretty in-depth data about 171 SaaS founders. And I can tell when the founders are having an outsized impact. It’s not just you’re successful, because sometimes you’re successful and you got really lucky and it’s not actually the founder. You and I have seen that. But given the relationship I have with the TinySeed founders in my private investments, I have patterns, there’s pattern matching that I see across my… There’s a framework I have of it. And one of those things is they generally tend to make the right decision more often than not. And, as you said, it’s not 100%, but it’s somewhere in the 60 to 80% range I think. You can be as low as 50 and it’s still probably not that bad. 

This is Rob popping in a day or two after Ruben and I recorded this episode, and I thought back to that statement that I just said, about how if you’re making 50% of your decisions correct or right or mostly right that you’re doing well, and I disagree with that. That number is too low. That’s basically like flipping a coin. As I thought more about it, I think if you’re above two thirds, maybe 70%, 75%, you’re doing pretty good. And I think the better you get at this, I think really experienced founders who know what they’re doing are probably in the 80 plus, 85, 90 plus. It’s like eight or nine out of 10 are at least in the ballpark. 

And as Ruben and I talk about measuring right or wrong can often be hard, it’s usually not just two choices, there’s creative choices, and oftentimes there’s 6, 7, 8 different paths, and you don’t know how they all would’ve panned out, and multiple options can be “right” or turn out poorly or whatever. So, it is all a bit hand wavy and fuzzy, but I just didn’t want to leave it on record that I said, oh, if you’re a founder making 50% or more of your choices, that you know how to make good decisions, because I don’t believe that’s the case. And now, let’s get back to the episode. 

I often list several founders off the top of my head who I think are really gifted founders, and are really good at it, and could do it over and over, and it’s Hiten Shah, it’s Jason Cohen, it’s Steli Efti, so there’s a bunch of folks who’ve been MicroConf speakers. They just tend to make the right decisions. And so, I’ve thought a lot about, well, how do you get better at that? Because it feels like this very intuitive thing, but I used to not be good at it, and I used to second guess myself a lot. And I think the ways I got better at it were by talking to people, either having advisors or having mastermind compadres, like yourself, who think about things differently than I do, and who make decisions differently. I used to make impulsive decisions quickly. You think a lot more in depth about decisions. And that steered me into balancing. What’s my weakness? I know myself to know, oh, a weakness is I’m uncertain, I’m not decisive, I think about things too much, and then eventually I just (censored), I’m just going to make an impulsive decision. 

That’s how I used to do it, say 15 years ago or more. And you balance me out. Just watching Hiten Shah execute, he was an early influence on me because he was a MicroConf speaker, and he was ahead of us, in terms of Crazy Egg, and just with KISSmetrics. Watching Jason Cohen execute. So, some of it I could do from afar, because Jason Cohen and I, we’ve done Zoom calls over the years, but it’s not like we talk every month. But you just observe him, and you read his blogs, you hear him talk about his decision-making. And it’s like, I want to be more like that, he seems to make some good decisions, and being-  

Ruben Gamez:
Some pretty good decisions, yeah.  

Rob Walling:
And being around you on a more ongoing basis, again, we have that monthly touchpoint for more than a decade, that also helped. And then, here’s what the interesting thing, even with TinySeed founders today, watching founders, there are a lot of founders that I work with, and I’m like, wow, you make really good decisions, and I’m still learning from them. They might be better at me than making decisions. And so, I pick up on little things… I’ll say, explain to me why you made that decision. And when I hear them talk it through, I’m like, ooh, that’s smart. That’s a neat framework, or a neat way of thinking about it. So, that’s the answer. The answer is I do believe you can develop this, because I certainly didn’t have it, and I would agree with you, these days, I do have it. And that’s not overconfidence, it’s I generally make the right decisions. 

So, I definitely think you can learn it, but I do not believe you can learn it in a vacuum. I think you need to be listening to the right people. And by listening to… Do they have a podcast? Or can you read Jason Cohen’s blog? Can you read my book, the SaaS Playbook? Hopefully I help you make some decisions. I have a thing in there about risk versus certainty and decision making. It’s like, are they putting stuff on the internet in a way that you can follow them, or do you know them personally? I know you [inaudible 00:25:51], that’s actually really good at making decisions, and I’ve learned from him even in the past five years of working together. So, does that all make sense? And does that align with your… Because I feel like you’ve always been pretty good at making these types of decisions, to be honest. But do you feel like you’ve learned it, or got better at it, or was it a natural thing?  

Ruben Gamez:
Yeah, what you said I think makes a lot of sense, and there’s a lot of overlap with how maybe I think about it. I’ve studied, of course, just decision-making, and things you could do to make better decisions. But being exposed to ideas from others that may be different, observing people that are making good decisions, and trying to at least consider and analyze that a little bit about why did they do this? And knowing yourself I think is a big one too. A lot of this stuff is really about just getting out of our own way. Knowing what we tend to do that messes us up, and then counteracting that, and however you need to do that. I think that’s huge. And then, being truly open to-  

Rob Walling:
To learning and getting feedback?  

Ruben Gamez:
Yes, yes.  

Rob Walling:
To asking, if I’m making a decision and I say, hey, five smart people I know, tell me what you think about this decision? And they all tell you the same thing. And then you say, oh, I’m going to do what I thought originally anyways, that doesn’t help you.  

Ruben Gamez:
No, no. Right. There are people, and we see them sometimes, there are people that ask for feedback, or put things out on Twitter or whatever, seemingly to get feedback, but not really. People give them feedback, and if they don’t like it, if it doesn’t align with what they’re thinking, they shut it down. You can’t get good that way, you can’t get better, you can’t improve in that way.  

Rob Walling:
Yeah, I like that. That’s a good way to think about it. So, I want to switch up topics and talk about sales as an introvert. Because you have had to do a lot of sales calls as you’ve moved into this upmarket position, especially on the API side, I’m assuming on the web app side too. A question I get now and again is, I’m introverted, and I don’t really want to do sales, but I have to do sales, how do you do it? Or should I just not? Should I automate everything? You and I stand the same on this. You do what it takes.  

Ruben Gamez:
Right.  

Rob Walling:
If I want to build a multimillion-dollar company, if I want to have an eight figure exit, I’m going to do what it takes whether I want to or not. And so, I don’t like sales, I’m not a good salesperson, I’m introverted as well. I don’t like talking to people I don’t know, Ruben. I have a small circle of friends. And so, how have you gotten over that?  

Ruben Gamez:
Yeah, there are just things that you do because you have to do to move things forward, and they tend to be easier if you know that they’re not going to be permanent things. You’re doing them to get to a place where you can bring on somebody who will do that, who truly enjoys doing that. So, sales for me is, I can kind of enjoy at times, or parts of it, and I can see how people can be so into it that that’s what they want to do for a living. I don’t want to do that for a living, it doesn’t give me energy, it’s one of these things that takes energy away from me, to where I need to recharge afterwards. Being that it’s important for the things that I want to do with the business, I’ve just made it an effort to learn how to do it better, and I’ve put myself in situations to where I’ve had to practice it. 

So, that’s another part. And then, I’ve just talked to other… Same process that I do for anything else that’s new that I’m trying to understand and learn and get better, practice taking in information and then talking to people who are doing it, and learning from others. So, learning from Jordan Gaul, who’s doing a lot of that, I’ve learned a lot from him. Matt Wensing, who’s really, really good at it, and has given me some great tips and advice in the middle of negotiations and all that. And even hiring expertise, and we have a sales advisor that worked in our industry and did exactly the stuff that we want to do, that I’ve hired to help us out and give us advice on this. Yeah, those are the things that I’ve done to help.  

Rob Walling:
So, it’s valuing the business… Not even valuing, but prioritizing the business or the growth over your personal preference of what you want to do. And it’s not what you want to do eight hours a day, 365 days a year. It’s, now and again, I have to do a sales call, and I don’t particularly want to do it. But I’m going to grind it for now, knowing that I’m going to hire this out eventually. But right now it really needs a founder. And then taking information in and iterating, and getting good enough at it… I don’t think you’d call yourself an amazing salesperson, would be my guess. But you’re good enough.  

Ruben Gamez:
Exactly. And I think, even for things like this, to where it’s not my favorite thing in the world to do, I think it really matters, the energy that you come at these things with. It really does. If you’re going into it just dreading it, and thinking about how much it sucks, and all this stuff, then it’s going to be rough. It doesn’t have to be that way. So, I tend to think about things at a higher level in the way where I’m not thinking maybe so much about the specific sales conversations and the tactical stuff. If I’m thinking about the type of energy that I want to bring into something, so I’m not all pissed off and dreading it, I’m thinking about it being a puzzle. All this stuff, these are puzzles. And I love figuring things out, and it’s about figuring this out, and figuring these things out. 

So, there was something I read recently, they were talking about… I don’t remember where it was, maybe it was a podcast. But I like the way that they phrased it, to where they’re saying, once you’ve made the decision, go all in, and go into it with a positive energy and attitude as much as you can. It makes no sense making the decision and then afterwards just trying to fight it. If you’ve decided you’ve decided to do this thing.  

Rob Walling:
Then do it. Stop waffling.  

Ruben Gamez:
Yeah.  

Rob Walling:
Go in.  

Ruben Gamez:
Yep. Exactly.  

Rob Walling:
Yeah. And I like what you said right before that, essentially gamifying it. To you, it’s like, huh, I don’t like sales, but you know what I do like? I like my MRR going up. I like having a challenge that I really am not good at, and that I’m going to be good at in a week, or a month, or six months. And I’ve often thought about building businesses like that. I built several businesses, pre-Drip that I kind of didn’t care about. I had these little, you remember, little eBooks about bonsai trees. 

Or I’m trying to think… I had duck boat plans, where you could build your own duck boat. And it’s like, they were quality things that I stood behind, I wasn’t just shilling crap. But I liked the product, I wasn’t passionate about the product or the niche, but I gamified it in the sense of how high can I rank in Google for all the terms? How fast can this grow? And it wasn’t… One of them did $500 a month, it wasn’t even MRR, it was just in sales of this $30 ebook. But it was still this fun challenge that I could work on. And I was learning, and if I screwed up with those, screwed up and Google booted it out, it didn’t matter. But it was still a fun challenge.  

Ruben Gamez:
Yeah. There were legitimately fun things about those.  

Rob Walling:
Yep. So, I want to mix it up and talk about hiring and firing. And really, I think the overarching thing is building a team and building a functional team that gets (censored) done, and that I never hear an excuse from you, of like, yeah, I don’t know, there just aren’t any good developers out there. Or, my team’s really dragging us… We’re not making progress because of my team. You just never say that. Because I think you tend to be pretty picky about who you hire, I think you tend to fire pretty fast, and somehow you find… Even during COVID where we were at, bootstrappers were at a disadvantage again, because everyone was remote, and usually being remote is this big advantage. Even during COVID, you still kept making forward progress. 

So, what is your mental model around this? Why are you… Again, I was telling you offline, you’re probably in the top 10, 15% of all the bootstrap founders I know, in terms of hiring, firing, motivating, building a team, basically the overarching thing of your team. It’s not just software, it’s the whole team. They just get (censored) done, you have good people who are competent, who are doing customer success and support and all this stuff. And a lot of founders struggle with this, and I don’t know, it’s like, Ruben, are you a natural at this? Or do you just have a framework or two that you think could help a listener who might have no idea what they’re doing?  

Ruben Gamez:
So, I didn’t know that I was as picky… I felt like, I’m a little picky, but I didn’t realize maybe how much more picky I was than the average founder hiring, or company hiring. Until recently, where I was working with Dynamite Jobs, I think, is that what they’re called? I’m not sure.  

Rob Walling:
Yeah, they’re called Remote First Recruiting now. Yeah, it’s Dan and Ian from Tropical MBA. We use them at TinySeed and MicroConf as well, to help hire.  

Ruben Gamez:
Yeah. And they do a good job of putting the job descriptions out there, and taking calls, and doing an initial interview and then sending you people that they think are good and qualified, and getting feedback if that needs an adjustment, and then sending you more people. It was something they said to where we, we were at about person 15 or something like that that they had sent, and Krista who had been working with on that, I don’t remember what I asked, but she said something like, well, actually, typically we send about three to four people before a hire is generally made. I was like, really?After the second, third, fourth person, that’s it? I feel like people are maybe a little bit too quick to hire, and maybe some of that comes from, we really need somebody and we need to fill that role. There’s some pain there. And not being willing to just wait to find the right person. 

I think that’s part of it. Also, when you’re hiring for a new position or something new, I tend to do the same thing for sales. Sales advisors are very involved in helping hire this person, helping… I don’t have the experience to have the gut feel yet for this being a really good person for this type of position. In certain ways. I understand if somebody’s well organized, and they have good attitude, and all this stuff, but there’s some gaps there, and I think it’s important to fill those gaps with help and expertise when you can. And then, I do follow, I like the book, Who: The A Method for Hiring, something like that, to where it’s a very specific process, to where part of it is, beforehand, I think an important thing that maybe some people skip out on is identifying what makes a great hire, and going down the list of the things that you’re really looking for, and then when you’re interviewing people, scoring them, they call it a scorecard, against each of these things. 

If it’s selling, their ability to follow up, their expertise with selling to the mid-market or enterprise or whatever, what people tend to do is, they’ll get somebody that they really like, and they think is really good, but maybe they’re not as good in the areas that they thought initially going into the whole process, that they needed, and they end up hiring this person, and then it doesn’t work out. Because it’s not… They just feel like, oh, this person’s a really good… And you’ll hear this sometimes, if you come across a really good person, then just hire them. But when you’re a small company, you do tend to have very specific needs, and there is less room for that. That, and then, one of the other things, even with hiring contractors agencies and things like this, I tend to keep track of companies… No, I should say, of people, that I think are really smart and good and doing interesting things. 

And I do that, often, I see them on Twitter or something like that, and so I literally have a bookmark for freelancers, writers, or marketers. And this is just random people that I think are really smart, doing super interesting things, that might be working at a company, might be working for an agency, might be freelancing, might be whatever, that I might at some point in the future want to work with. Maybe an external agency or something that can help us with things, or if they start something like that, or a freelancer, or hire them. Hey, this person, if they become available, and we’re looking for this type of position, they would probably be pretty good. I think it’s helpful, I’ll say, to always do that, even if you’re not hiring for that specific thing.  

Rob Walling:
Right, you’re just paying attention because you know that you’re going to grow.  

Ruben Gamez:
Yeah.  

Rob Walling:
It’s interesting what you say about being picky, because I used to be accused of that as well when I was a development manager at a credit card company. We’d hire these contingency recruiters that make an egregious percentage of the first year salary, 15% or something of 100, at the time, 120, $130,000 salary. But they only do it if you hire them. So, there was all this pressure on us, and the recruiters would get so mad, and they’d be like, what are you looking for? Can I see your resume? Do you have the stuff you’re asking for? And I was like, no, you can’t, A… And my boss got super mad when they asked to see my resume. But I said, no, I’m just not going to hire someone who’s not a fit.  

Ruben Gamez:
That’s funny.  

Rob Walling:
Yeah. And the thing I think about… Maybe I should write this out at some point. But when I think of… You were talking about evaluating someone. Let’s say I’m going to hire a designer. If I simplify it, there’s three skills a designer needs. This is oversimplification. But they need the actual design skills, the chops to do it. And whether I’m going to hire or just for a one-off job, are they a good designer? And you know how I can evaluate that? It’s easy. Go look at the (censored) designs.  

Ruben Gamez:
Their work.  

Rob Walling:
Yeah, just look at the work portfolio. So, designers are actually, in my opinion, easy to evaluate, because I can look and say, I like that, or I don’t. I think they’re skilled or they’re not. That’s the easy part. But there’s two other factors that are hard to evaluate. The first one, I guess it’s the second one of my three, is communication. Do they take feedback and iterate well? Do they communicate with you and say, oh, I’m going to be late, or… Whatever. Are you able to have a back and forth with them in a way that the two of you understand each other? So, communication, and that’s what I’m going after in an interview. I’m trying to suss out, I know what your skill is, I can see your design. So, I’m trying to figure out, can you communicate, let’s talk about some complex topics, and figure out if we’re on the same page. And the third one, I’ll just say, do they deliver? Meaning can they hit deadlines? That one is the hardest of the three to figure out.  

Ruben Gamez:
That is, yep.  

Rob Walling:
Because you can’t figure that out by asking them a question. It has to be either references, or maybe you ask, hey, when was the time you didn’t hit a deadline, how did that play out? And listen to how they talk about it. And if they’re like, oh man, it was two years ago that I totally missed a deadline, and here’s what I did. Or if they’re like, oh yeah, so a couple of weeks ago I did this. It’s like, huh? But even that’s not 100%. It’s just, we are trying to evaluate. And if anything of when I’m hiring designers, usually the thing that I miss is that they don’t hit the deadlines and they’re unreliable, because that is the… I just know there’s uncertainty in that. And it’s hard in an interview process, until I work with them, figuring that out. Similar, let’s say we’re hiring a customer support, email support rep, for a SaaS company. 

Again, I think there’s about three things. One is communication, for sure. Can they type the email or the live chat [inaudible 00:41:48]? Second is, will they get the understanding of your customer and your product? I think that’s the second thing. Can they [inaudible 00:41:55] that and get it all in their head? And the third one then I think is speed. Does it take them five minutes or 50 minutes to write this email? If I gave more thought to it, maybe I would pick different ones. But I think those are the three. Now, can I figure out communication? Probably. I could probably email them with them, I can talk with them during an interview. Can I figure out whether they’re going to understand my customer and my product? That one’s tough. I would do it on a sample project.  

Ruben Gamez:
Yeah. We have an application… We hired for that. We have an application for that. To where, sign for the product, do this task, upload a document, all this stuff, and then fill out this form that has these questions, from real customers that we’ve asked, to where they don’t know the product that well, but they have to answer the questions, and see if they can find the right answers, or understand, a lot of it is about understanding what’s coming at them.  

Rob Walling:
Yep. So, all that to say is, without those mental models or without any experience hiring, I think people… I’ve heard this phrase used of, resume and small talk. Where, I get on an interview with anybody, developer, designer, support person, and I’m looking at their resume, saying, oh, they worked at Google, they worked at Facebook, they must be really good at the… No, don’t do that. Or they were there seven years and they became a senior, blah, blah, blah. It’s like, so? I worked at a ton of companies with (censored) people, with dummies that rose to senior manager.  

Ruben Gamez:
Right, yeah.  

Rob Walling:
Don’t use that. That is one of the least important things. I look at tenure, I look at some experience, blah, blah, blah. But I’m trying to get into nitty-gritty, and ask them, I won’t even say hard questions, but just questions that actually get to the root of, what are the skills that they need to succeed at my company? Because guess what skill they don’t need? The ability to work at Facebook for three years is not a skill you need to work for me.  

Ruben Gamez:
Yeah, no, that’s a good point. There is generally some sort of exercise to try and evaluate the quality of the work. And depending on the position, you can, on the design side, you can tell, on the development side, even on that side, we do have people that go through a four-hour coding exercise and all that stuff. And that’s been, we’ve improved that to where it tells us pretty well where they are on at least the code quality point of view. So, that helps. And if you can work with them, of course, on a smart project or something like that, that’s the best, then you know. But that’s not always going to be the case. 

But, like I said, we hired both a developer recently that did that, and then on the customer success side, also for support, we’re having a lot of people just not being able to understand, or understanding but missing little details that matter and that result in a bad support experience, because somebody’s… It’s like, wait a minute, you’re not… And we’ve all gotten this, to where we send in the support, and then they just send in a copy and pasted reply, or link to support article, and you’re like, no, you’re not really answering my question. 

Yeah, that’s a big part of it, and then in the communication part, that’s partly why we have everyone write, in their application, we have them write why they were interested in the position, all the basic stuff, and then just get a feel for their writing and their communication. Generally, even in the exercise, there’s a feedback and improvement part. Can you change something? And this is about seeing if they’re open to criticism, and if they’re open to write some pushback and all that. And it’s not super strong, but you’d be surprised at how many people are just… The way that they take… It doesn’t have to be super obvious, it can be subtle, to where were like, ah, okay, there’s something there.  

Rob Walling:
There’s something there. Yep. And there are skills, like you’re saying, that are easier to evaluate, like communication, or response time, or understanding. And there are certain skills that in any role are just harder. They’re just harder. Like hitting deadlines and this and that. It’s like, I can’t figure that out in a interview, I need to do a sample project. And I think having that dichotomy or whatever it is, that mental framework in your mind as you go into interviews, I think can be helpful. Because I’m going to check the boxes for the ones that I can evaluate, and then the other one I’m looking out, this is why people do trials, 30-day trial, or a single project trial, if it’s project-based, to try to suss out that other one or two. And if there’s any wavering, you just cut bait.  

Ruben Gamez:
You know what’s pretty good, surprisingly good too? Is the question where I’m asking… You ask everyone what are you not good at, or what do you want to improve, and all that stuff. And they’re all like, oh, I’m too much of a perfectionist and blah, blah, blah. And then, the one where you’re asking about specific jobs, and who they work with, and if I ask, who did you report to at that place, at the job? Okay, so I ask so-and-so what they thought was something that… If I asked them, what’s something that they could improve in? What’s an area that they could work on? What do you think that person will…  

Rob Walling:
Right. So, your former boss.  

Ruben Gamez:
Yes.  

Rob Walling:
What would your former boss say that you could improve about yourself?  

Ruben Gamez:
Yeah. Being specific at each one of the jobs. It actually works really, really, really well. Sometimes you’ll get pushback toward, oh, I don’t know what they would say, and then at that point, it’s like, they don’t want to say anything bad, but I say, sure, I get that. But somebody like Christian on my team, he’s our lead dev, he’s great, but he also wants to know how he can get better. So, I go out of my way to let him know, because nobody’s perfect, how he can improve. So, what would they say, in your opinion, that would be… And usually though they know, because those conversations have been had, so then when they say the thing, it’s like, oh, can you give me an example of that? And it’ll usually come up like, yeah, it came up because of… And these types of things will give you clues into their strengths, and maybe the areas where they’re not so good.  

Rob Walling:
Right,. And another point you just made, without even making it overtly, is sometimes you have to ask a question two or three times. Sometimes you have to push a little bit. You don’t have to be a jerk, but I ask some hard questions, very tactfully of people. I’m the guy in our TinySeed interviews, it’s like, so I can see your churn is 12% per month, I’d imagine you want that to be quite a bit better, because that’s not good? Or talk to me about why it’s there. Talk to me about how you thought… So, basically, I could have said, your churn is (censored) catastrophic and your business is on fire, why haven’t you fixed it? That’s one way to ask it. Or you can ask it the way I just did. So asking… So you don’t have to phrase things like a jerk in order to ask hard questions. And that’s actually, Crucial Conversations is a book that you recommended to me years ago, and I learned a bit about phrasing and all that from there.  

Ruben Gamez:
Yeah. No. And coming at it… That’s a good point. Coming at it multiple ways, because people will try to give you fluffy answers. It’s like, oh, so for this project, give me an example of this, what happened? What was something that where you ran into… What was a tough time at the company or whatever? It’s like, oh, blah, blah, blah, so and so, we had a problem with whatever. And it’ll be very fluffy. It’s like, oh, tell me about that. And then they’ll kind of tell you, but it’ll still be high level. It’s like, yeah, I wanted to understand what happened there, tell me about your thinking. What kicked it off? And you sometimes have to push a little and just keep asking.  

Rob Walling:
Ruben Gamez, you are earthlingworks on Twitter, everyone should rush over and follow him there. Thanks so much for taking time to come back on the show with me.  

Ruben Gamez:
Thanks. Always great being on here.  

Rob Walling:
Thanks again to Ruben for joining me on the show, and thank you for coming back this and every week. This is Rob Walling signing off from episode 696.

Rob Walling:
It’s another episode of Startups for the Rest of Us. I’m your host, Rob Walling. Today I’m joined by fan favorite, Asia Orangio. She and I answer listener questions ranging from finding your ideal customer, moving from B to C, to B to B, and several other topics related to bootstrapping, and mostly bootstrapping startups. We’ve continued to have a great stream of incoming listener questions. As always, audio and video go to the top of the stack, but I am getting through a lot of the written questions as well. So head to startupsfortherestofus.com, click Ask a Question in the top nav from your mobile device or your desktop, and send us a question. If you want to hear me or me and a guest discuss it on the show. 

Before we dive into that, we are running the next edition of the State of Independent SaaS Survey and Report. Through MicroConf, we’ve run the survey a couple of times, and then we decided to take last year off, because the information coming through wasn’t changing. The survey is about 40 questions. It takes less than 10 minutes to complete if you have your metrics handy. And then we take that data from what usually winds up being between 600 and 1,000 independent SaaS companies. These are bootstrapped and mostly bootstrapped SaaS companies. And we compile a report with all the key findings and helpful industry benchmarks that you don’t get anywhere else. The survey closes soon, we could really use your input. All the data is kept anonymous, and every survey response we get, makes the report that much better. Head to stateofindiesaas.com to complete the survey, and we’re going to enter everyone who completes a survey, into a drawing for a free ticket to MicroConf US 2024, in Atlanta. That’s more than a $1,000 value. 

I know it’s a lot for me to ask you for 10 minutes out of your busy day, but it really would go a long way towards making this year’s report, the best yet. We are mixing it up this year, asking different questions, and pulling out different findings than you’ve seen in the past. So even if you’ve filled out a prior survey, it’d be amazing if you could head to stateofindiesaas.com and complete it. I wanted to let know about our MicroConf Mastermind Program. If you listen to the show, you know that I talk a lot on this podcast about how important masterminds have been to my own success. But finding the right founders for your mastermind group can be very hard. Over the past few years, my team at MicroConf has successfully matched more than 1,000 founders into mastermind groups by looking at revenue, team size, strengths, goals, and several other data points, to make sure your peer group is the right fit. 

Once you’re matched, you’ll also have access to our mentorship series. A three-month program where you can connect with some great minds in sales, business development, marketing, and more. If you’re looking for accountability, honest feedback about your business, and the opportunity to make new friends that care about your company and your success, you can learn more at microconf.com/masterminds. So with that, let’s dive into listener questions. Asia Orangio, thanks so much for joining me on the show again.  

Asia Orangio:
Yeah, thanks so much for having me.  

Rob Walling:
Another lister question episode. Back by popular demand. When I go on tour, when I go to MicroConfs, people are like, “You need to have Derrick Reimer back on the show, Asia Orangio, Ruben Gamez. Just have them on all the time.” So, it’s great to have you back.  

Asia Orangio:
Thank you so much. Yeah, speaking of Ruben, I got to go back and listen to that one. That sounds like a good one.  

Rob Walling:
Yeah, Ruben. If you go to startupsfortherestofus.com and there’s a little hour glass search at the top, just type in Ruben Gamez, and pretty much all those episodes, I wind up just re-listening to. I go back and listen to a lot of episodes as game tape. Not a lot of episodes, but I’ll go back a year or two and remind myself, “Oh yeah, that was the thinking then,” or “That’s actually a neat idea that I didn’t repeat 10 times, so I probably should.” Because, until I repeat it 10 times, none of us remember it. And a lot of the Ruben episodes have really good nuggets in them. You ready for the lister questions?  

Asia Orangio:
I am. Yeah, let’s jump in.  

Rob Walling:
Let’s do it. Our first question today, is a video question from John Mark, asking, “Would you adjust your target customer for an opportunity?”  

John Mark:
Hey Ron, my name is John Mark, and I’m building an app called Balance. It’s a budgeting tool targeted at first-time budgeters. I’ve been building it slowly over the last few months. And last week, Mint announced that they were shutting dow their budgeting platform, which leaves somewhere between three and 4 million monthly active users looking for a new budgeting app. I’ve seen a lot of other budgeting apps aggressively go after these users. Being small and not having a product that’s fully polished, I’ve got MVP features in place, but it’s pretty simple. I’m wondering if I should be ramping up to try to capture part of those Mint users. 

I’ve started to do a little research and started to talk to a few people. But they’re different from my target customer base. They’re typically looking for a free budgeting app. Mint was one of the few free budgeting apps that hold in your transactions automatically. And they might be using more advanced features than Mint, that I don’t have ready yet in my platform. And so my question for you is, would you try to carve off some of those customers? Even capturing 1%, which I know is a lofty goal, would still be life changing for Balance, and really get revenue coming in the door. 

I’m on pre-revenue. I wasn’t planning on releasing the MVP until Q1 of next year. I have felt the pressure a little bit and ramped it up from people looking to potentially support a smaller company, which Mint shutting down. And so I can get MVP out there in December, but it wouldn’t be… I don’t know if it’s quite the right fit for what Mint users are looking for. So I’d be curious on how you would advise in this situation, how you might handle a large influx of users that are close, but maybe not quite what you were targeting or what you were setting out for. Thanks for all you’ve done and all the other podcasts and resources you’ve put out there, they’ve helped me a bunch. Thanks Rob.  

Rob Walling:
What are your thoughts on this, Asia?  

Asia Orangio:
Okay, yeah. So, looking at this, this is a… It’s a go-to-market question. It’s a question around, “Is it worth my time to go after this customer base?” And usually when it comes to go-to-market in general, go-to-market being the practice of, “How do I deliver my product to an audience through channels, with a particular model, that enables them to buy it?” And when I hear this question or when I hear this context of a scenario, I think that there’s a couple of things to back into. So the first is, it sounds like John Mark is not necessarily convinced that… Like he’s unsure, it sounds like, around if this Mint audience is going to be a good audience for his product. I think that there’s two ways that I would recommend approaching this. It’s tough to say if the answer is yes or no. 

My heart hard assumption is that anyone who’s using Mint for free, may or may not actually be willing to pay for something. But that doesn’t necessarily mean though that those Mint users are not possibly using something else. So for example, I’ve been a Mint user for a very long time, but I also pay for YNAB. And they both give me different sets of data that I use that’s interesting to me. [inaudible 00:07:15] about to say, I almost would rather John Mark go and actually interview Mint users and find out for himself. He could do this using userinterviews.com. One interview on the B2C side, maybe might cost him 45 bucks. Maybe he throws 25 to 50 bucks at a person, I guess like a gift incentive. So let’s say on average he’s paying $90 per interview, he could do four or five of those and get answers pretty quickly on like, “Oh, are Mint users actually good users for me or no?” 

I don’t think that we can assume. My guess is if they’re not paying for it, maybe not. But that’s how I would approach the first part of this question that he has.  

Rob Walling:
Yeah, I think that’s a really good idea, is whether… What was it? Userinterviews.com, that you mentioned?  

Asia Orangio:
Mm-hmm.  

Rob Walling:
I was imagining, given how many Mint users there are, I’m going to on Twitter, I’m going go on whatever audience I have, and say, “Do you use Mint? Please let’s do a conversation.” Now maybe you’re in a bubble now, because if you’re a developer, then there’s a bunch of other developers on Twitter and you may not get the right swath of people. But I agree. So I’m in your boat where I’m maybe even more skeptical that free Mint users are going pay anything for anything. The reason that Mint worked is because they sold to Intuit. Mint was not a profitable company as far as I know. I’m pretty sure they raised a bunch of venture and then they were earning money and then they sold to Mint, somewhere like 10, 13 years ago. Is that right? around 2010, 20 whatever. 

Had they not done that… Like, they didn’t prove out that they had a successful business model. And the reason they worked was that Intuit then engineered it and made it lead gen, blah, blah, blah. But I mean, is it that successful of Intuit shutting it down? So I’m guessing that there is a lot of, whether it’s cost… Or there’s just, is this a bootstrapable business, taking on a bunch of Mint users? I’m pretty skeptical about that. Whether I talk to them or not, just on the face of it, I’m like… I’m not a believer. 

The other thing is if your product isn’t already there… I guess I didn’t look to see what the timeframe of Mint shutting down is. But my guess is if they’ve said they’re gonna shut down and people know this, usually you want to already be there, today or last month. It’s like, “Oh, my product is a perfect replacement for it.” But if you’re talking about spending a month or two to develop, and then trying to get the word out, my concern is things move fast, and are you too late? And is there already a good alternative to where you didn’t happen to hit the puck right at the right moment, and so the angle is going to be off, and it’s just not going to work?  

Asia Orangio:
So, it sounds like you’re taking it from the perspective from news hits, to, is it even worth my time? Am I even going to match up with this curve? And it’s very likely, maybe no.  

Rob Walling:
My impression. You and I are operating on limited information, right?  

Asia Orangio:
Totally.  

Rob Walling:
We’ve thought about it, you know, a collective four and a half minutes, right? Or a maybe a few minutes before the podcast. So it is hard without all the information, to make this decision. But on the surface the way he’s describing it as a product builder trying to kind of shoot a gap in a space where he’s like, “My product, I don’t know that I really want Mint users.” I mean, he says that in his question. “They aren’t really my ideal users, but oh, they down, there’s an opportunity.” That’s tough. It’s like, is the opportunity amazing and golden, or is it something that seems cool? 

And I think what you’re getting at, I think what both of us are getting at, is probably you need more information. And you’re saying, talk to customers. I’m saying, how about this? What if I run Instagram or Facebook ads to Mint users or people who follow me to wherever it is, to target, and say, “Mint user? Concerned their shutting down? Check out…” blah. Send them to a landing page, send them to a page to book you for a call. Send them to something. See if you can reach anybody through this just to get… Because you don’t need 10,000 people. If you get 50 people or 100 people, you know that you can get into… whether it’s conversations one on one via Zoom, or whether it is email conversations or whatever, I feel like you need more information to make this decision. I’m just giving a gut feel, leaning, based on a 90-second voicemail.  

Asia Orangio:
Totally. I also think too, it sounds like the MVP isn’t out yet. And that makes me think that Mint getting shut down, creates maybe an artificial pressure. But actually, as John Mark mentioned in his message, it’s very possible that these Mint users are actually not the ideal paying customer anyway. Especially if it’s largely free folks, which he actually mentions, yeah, in his message here. Yeah, I agree. There needs to be some type of validation. You can go the route of customer discovery. So of course, you could interview Mint users directly and get a feel for that. Then there’s also, Mint aside, who would be your best paying customer anyway, which is really the area in this space I’d probably spend more time in. And then there’s the other way that Rob was mentioning, which is, you could run a campaign and test this pretty quickly.  

Rob Walling:
So thanks for your question, John Mark. I hope our thoughts were helpful. Our next question is a voicemail from Daniel.  

Daniel:
Hey Rob, this is Daniel, tuning in from Germany. Thanks for your podcast. It’s a great source of knowledge and very inspiring to me. In one of the more recent episodes, you talked about certain anti-patterns that are usually a bad idea. One of them was to translate your app, which I agree with. I do wonder if this also applies to marketing, say, educational content on my website. So, for context, I’m working on a code review app called Codelantis. This is currently just a side project for me, and my primary goal is to get in touch with people interested in this particular field. Since I’m German, I could quite easily translate selected articles myself, and this would maybe help in terms of SEO and things like that. I’d be really curious to hear thoughts on that. Thanks for everything you do. Cheers.  

Rob Walling:
So just to clarify, my understanding is, and I went to his website, it’s codelantis.com. The H1 is “Understand and review pull requests fast with Codelantis.” The website is currently in English. And so I think what Daniel is asking, is, does it make sense, since he’s German, he speaks German, for him to start translating some marketing or educational content, some blog content, into German to potentially attract people? Because it sounds like it’s a relatively small lift. I mean, I don’t know, translating a blog post feels like a big lift for me. 

But anyways, I just want to clarify that, because I was trying to figure out… In the SaaS playbook, I talk about people who they hit their ceiling of 8K a month, and then they’re like, “I’m gonna translate this into Spanish, German, French and other things.” And I’m always like, unless your market is tiny, tiny, that’s not the next step. Do the hard thing, which is market and sell. Don’t use this excuse to go… It’s a form of procrastination, right? But Daniel’s asking, “Well, I’m German, maybe it doesn’t make sense to translate some blog posts and other marketing stuff into German. What’s your take on this, Asia?  

Asia Orangio:
Yeah. Okay, so I can see both sides to this. I think my ultimate strategic question would be, is this actually your next best growth opportunity? And we don’t have all the information, we don’t know what the MRR is, we don’t know all the things. But my first… This, I don’t think is a bad idea, at least short term. It could become challenging though, because while the founder may speak German, do you want to build out a marketing team and a support team that also speaks German, and also caters to the English markets? Globalization, on the one hand, especially now with AI, is actually very easy, and at the same time, not easy at all. Because you ultimately do need other people to support this additional language. It’ll just be you in the beginning, but then, assuming you grow and you build up a team, etc. they are also going to need to be able to support this other additional language. 

But, that aside, I think, again, I really go back to, is translation actually your next best thing to do? So I would be not knowing all the details, obviously, about the product, but I would actually be looking instead at, are there other channels? Are there messaging opportunities that I have that I’m not aware of? Are there onboarding activation? There’s monetization, retention. There’s a whole other world of growth opportunity that’s not translation. However, like globalizing in some kind of way, it could be an easy thing. But yeah, but then I also think, too, how much of the market is realistically looking for this? 

So it’s tough to say, but my guess is I’m soft on it. I feel like there’s probably other opportunity that’s maybe more pertinent, and also too, it’s another go-to-market question, right? Is supporting the German language… is that something that you’re actually gonna be committed to in the long run? And I think that that’s like… You know? Three years from now, five years from now, are you gonna have the resources available to support that? I think most people don’t think about that in that way.  

Rob Walling:
I love that. Yeah, I feel the same way as you do. I think I’d probably feel a little more strongly in him not doing it. I am pretty unconvinced that this is the next best thing for him to do. And I think the number one thing I thought of, was exactly what you said. Yeah, so you’re gonna get some Germans who come and use a product and maybe pay, and you’re supporting them in German, because you’re bilingual, and then you have some English users, and so now you have to hire support people who are bilingual. And when a German speaker starts using your app, aren’t they gonna want the app translated, too? Aren’t they gonna want your knowledge base translated, too? They’re gonna want email support. You know? 

It’s not always, but to Asia’s point, in the short term, you can kind of hack around these things, and in the long term, I just don’t think it’s good decision. My gut is that if English speaking is for developers, it looks like, or development managers, and it’s like the English market is plenty big, I would spend the time on that, rather than making things complex at this point. So thanks for your question, Daniel. I hope that was helpful. Our next question is a written question. So voicemails and video questions go to the top of the stack, except I feel bad, and sometimes written questions are so old. This is from May 9th, so this is a seven or eight month old question just because the video ones keep taking precedent. So I try to stick maybe one text question in each Q&A episode just to get through a few of them. 

So this question is from Vijay, and he says, “I would love to hear any insights on how to go from B2C/freemium to B2B. How to keep small and individual users happy, they’re coming to me via word of mouth, but still sell to big companies? I started something small for my own use and made it available for free, then I added a couple more features with a B2C paid plan. Most of my users are from big enterprises and Fortune 500 companies, and happily use free features. I’m not making much money out of it. My plan is to add more valuable features and make it worthwhile for enterprises. But, for now, I’m stuck with the B2C freemium model, and I’m trying to figure out a way to go B2B. 

And based on his email address, it looks like he’s at agilebin.com. The H1 is “Improve productivity of scrum teams, using Agilebin power tools.” Asia, what do you think? This is another kind of go-to-market, isn’t it?  

Asia Orangio:
Mm-hmm, yeah. And this is interesting because when we think about go-to-market, which I like to use Brian Balfour’s framework for this. So product market, model and channel. And what Vijay is experiencing is, he created a product for a market, there’s something about the model that’s not sustaining that, financially speaking. He’s not making much money from it, he said. He mentioned freemium. And so now he wants to move from that to selling more to businesses. And that usually means… A change in market usually means a change in other aspects of your rich market strategy. 

So now we probably do need to change the product in some kind of way, which he mentioned. So I’m glad that he’s aware of, “I gotta go and build more features and make that more valuable to businesses.” So he asked the question, “How?” And I thought that was really interesting, because there’s many facets to the how. There’s the, “How do I figure out what the right features are?” Then there’s “How do I go out and get maybe the first customers of this new version of it?” Or I’m gonna put it in finger quotes of a pivot, because that’s kind of what it feels a little bit like. It doesn’t sound like a hard pivot. At least, we don’t know all the details. 

But, the how is interesting, because I think the how, it sounds like Vijay should probably go and… I know I’m probably going to say “Research” a bunch in this session as per usual, but I’d be curious about his product discovery process. So how does he discover what the product should be for these other businesses? And in that process, he will naturally come across ways of how he can actually acquire them. But I think it’s got to start with, “Well, what are we ultimately building and selling?” And then also, “Who are we selling it to?” It sounds like these businesses, but those have to get pretty crystal clear before we’re able to even figure out what channels should be in the first place. This sounds like part of discovery. This reminds me of the book, oh gosh, Continuous Discovery Habits by… is that Teresa Torres?  

Rob Walling:
Yes.  

Asia Orangio:
By Teresa Torres, yeah okay. That’s the book I would probably put in front of Vijay, in terms of answering the question of how from a product perspective. But then from a market perspective, I think that that’s going to depend very specifically on what types of companies he’s looking at. My guess, he’s going to be looking at some form of sales, like outbound sales of some kind. Probably going to be looking at Demand Gen in terms of acquisition. But from there, yeah, it’s going to depend a little bit, I think, on how he thinks about this. There are opportunities based on what agilebin.com does. This also reminds me a little bit of Dropbox and how Dropbox grew. I mean, we hear about growth loops all the time, but I’m wondering if there’s like a, this might be slower and longer, but there are likely growth loops that Agilebin could probably consider. But my guess is he probably wants money in its pocket sooner than later.  

Rob Walling:
That’s the challenge of freemium, right?  

Asia Orangio:
Yeah.  

Rob Walling:
Because it moves revenue out, which if you have kajillions in venture, you can do it. And if you’re bootstrapping and trying to quit a day job, usually you don’t want to do it.  

Asia Orangio:
Right.  

Rob Walling:
So that’s a challenge. I like the way you thought about it. Brian Balfour, he famously ran marketing at HubSpot, I believe, and now he has this… What is it, in the Bay Area? The academy he has. It’s teaching people how to market.  

Asia Orangio:
Oh, is it Reforge?  

Rob Walling:
Reforge.  

Asia Orangio:
Yeah.  

Rob Walling:
Yeah. Yep.  

Asia Orangio:
I love Reforge.  

Rob Walling:
Yeah. And Brian Balfour’s awesome. He just launched a podcast in the last few months as well. But I like your talk about go-to-product market model and channel. Those are the four. Before you said that, I was like, “I think the things that Vijay needs to think about, are how much the product needs to change, how his marketing might need to change, and how his sales operation needs to change.” Which I think right now he has no sales operation. So it overlaps a bit with what what you said. And realistically, the first question I have is, “Do you want to go after Fortune 500 companies and big enterprises?” You’re talking procurement, you’re talking sales cycles of six, nine, 12 months. I say this from second experience with 171 investments, who the majority of them do some type of sales process. 

And if you’re up for it, then awesome. But really be sure you want to do that. This is no longer an indie hacker project, once you do that. Product-led growth, as some people throw around, is much like freemium, way harder to do well than everyone thinks. And the second thought that I had is, “Does your product… Could it serve the enterprise today? Would they buy it as it is?” It’s not, will individual users use it? But, will a team pay the money for it. And pay enough money. Because the moment someone says procurement or custom terms of service, or “I want single sign on,” or “I want…” You know? Whatever. Enterprise to be able to this and that. All right, cool. Minimum, 30 grand a year. That’s it. I’m not going to go through the pain or do any of that for less than about, usually I say 25 to 35 grand a year. Minimum, minimum, minimum. Because otherwise, it’s just not worth it. And there’s only so many customers who are going to pay that. 

So that’s the thing I think I’d be thinking about. I mean, when I look at it super tactically, I think you can have a dual funnel, right? I talk about dual funnel where it’s like you have this low end funnel. That can either be free or it can just be inexpensive. Think of Castos which is podcast hosting. And they have $29 a month plans and they have plans that are thousands a month, where they do all the editing and everything. And that’s cool. He has a dual funnel, people coming in on the low end and the high end. There’s enterprise sales on the high end, and there’s not on the low end. It’s self-serve. And Ruben Gamez has this with Signwell as well. There’s the main product, e-signature, and then the API is pretty expensive. It’s a, “Call us,” type pricing. 

So you can do that. And I think Agilebin could potentially be that. But I don’t know. If you don’t already have the interest from the enterprise, you got to think, I guess it’s just as you said, it’s a cold outreach at that point. Or a warm outreach in this case, where you look at what are all the domain names on the emails I have in this free plan. Oh, there’s 10 people at Netflix, there’s seven people at Target, there’s nine at CVS. Are you now reaching out to them saying, “Hey…” That’s PLG, right? That’s what Slack has done. Is that a potential first step of just seeing if anybody responds or anybody cares or anybody’s using it enough to consider that there needs to be some type of enterprise plan? That’s probably how I would be thinking about it. The alternative is just to abandon the low-end at all, not do it to a funnel. Just say, “I’m going shut down the free plan,” or at least shut it down to new signups for now. And I’m going to double down and go all-in on enterprise, figure what to build to do it. 

I think that’s more risky, and I don’t know in the near term that I would necessarily do that. It feels like the free plan is his marketing right now. That’s the marketing channel, so he owns the leads, as Patrick says.  

Asia Orangio:
Right. And it’s… What’s the saying? “Freemium is not a revenue model,”?  

Rob Walling:
Yeah, it’s just a marketing channel. Yeah.  

Asia Orangio:
Yeah. It’s more marketing. Something else that you mentioned that made me wonder, because it sounds like the tension is really not making enough. There was something… Yeah, “I’m not making much money out of it, So my plan is to…” et cetera, et cetera. That sounds like the tension point. And what I’m also curious about, is what if you switched away from freemium? That terrifies a lot of people. It scared a lot of people. But if there’s not that much coming in, if it does not feel like it’s as big of a risk, what if you move away from freemium and figured out how to make this work on the smaller end? There’s all kinds of trade-offs for this. But it makes me wonder, do we actually have a better product than what we think we do, and we’re just giving away a lot for free, basically?  

Rob Walling:
And moving away from freemium can be undone pretty easily, because you can just hide the free plan on the pricing page, wait a month or two, keep the free plan active, don’t kick everybody off, don’t start charging people yet, and just see what happens. And maybe do reach out to your free people, your folks who are currently on your free plan and be like, “Hey, did you know the pro plan is so amazing and you should really upgrade,” and blah, blah, blah, and see if you can sell it to anybody. That’ll start giving you an indication of “Have I really built something people want and are willing to pay for?” That’s my product market fit text expander. Not just building something people want. Building something they’re also willing to pay for. And I think that’s the biggest question that I’d be asking myself these days. So thanks for the question, Vijay. I hope that was helpful. 

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Our next question is a voicemail from Fred.  

Fred:
Hi Rob. My name is Fred. I’m a long-time listener, first time caller. My co-founder and I have a bootstrapped SaaS called Worktable, which offers a PC-based platform that makes webcam play easy for trading card games. As you mention periodically, engineers often hate sales, and we’re not exceptions. Yet, I’m particularly struggling with how to approach cross-channel marketing, if that’s the right term here. We have a warm lead, which is a charitable organization that serves children with prolonged stays in hospitals. They want to help the children they serve reconnect with friends and family, and a very common request is to play physical card games. As long as we can afford the cloud costs, we aim to serve them for free. Unfortunately, the goodness of our heart doesn’t pay the bills. Our hope is that they will give us an occasional shout-out to help us recruit paying customers who can enable this to continue indefinitely. The shout-out from them, could bring thousands of times more traffic than we’ve been able to generate ourselves. 

However, I realize just hoping isn’t enough. How do I frame this in my own mind, and in conversation with them, so that we all feel I am asking them for a win-win? Thanks in advance for your advice, and thank you for the thought-provoking discussions in the podcast.  

Rob Walling:
So this one’s interesting. This is why like listener question episodes. Because people come up with just stuff that I would never think of. What’s your take on this?  

Asia Orangio:
Okay, so there’s so many layers to this one. And I think that’s why it’s such an interesting question, and just scenario in general. So this first makes me think about what growth loops exist in the business today. And what I mean by growth loop, is there is some trigger that happens that generates either an awareness or an acquisition or some quality touch point with the person that you ultimately want to acquire. So for example, the most popular one that everyone knows about is Dropbox. When you sign up for Dropbox, you… What is it? If you share Dropbox, or you invite someone else, you get more space?  

Rob Walling:
You both get more space, I believe.  

Asia Orangio:
You both get more space? Slack is another really popular one. You create your organization on Slack. First thing Slack asks you to do, is to invite your team members, and then so on and so forth. The other most common growth loop that most people aren’t aware of, but most people have, are actually marketing websites. So you create content, it attracts people, ideal people come to your website, et cetera. Hopefully they sign up. It’s a tougher growth loop, because it’s not super predictable. It’s not like a one-to-one transactional type thing, but it is technically a growth loop. And what this made me think about, was, what are the growth loops that exist for this business when it comes to the charity specifically? So, when the charity is using, I think it’s video games. Is that what this is?  

Rob Walling:
It’s called WarpTable, and I had to Google it, but it’s software that allows you to play physical card games remotely. So think of Magic the Gathering or even I imagine Solitaire, or I don’t know, I have a bunch of games. So as long as you have a webcam set up and can see the cards on the table, and your opponent is on the other side of that, and they also have that, then… I don’t know exactly what the software does, but that’s basically what it is.  

Asia Orangio:
Yeah. So this makes me wonder. Well, first the request, it’s almost like a hopeful, “I want to maximize this as much as possible. I want to make sure this generates more customers for us.” And my first thought was, “What growth loops exist in the platform today, so that way when either the charity uses it or anyone from the charity, involved with the charity, et cetera, uses it, that it creates a natural growth loop? That was my first thought. And then the second thing that came to me was, it also kind of sounded like maybe Fred might have been stuck on positioning this to the charity. 

Like, “How do I position this in a way where they’re going to see the value and want to actually invest more in this or pay for it,” whatever it is. Because, unironically and maybe also ironically, Fred is like, “We are not running a charity, but we are helping charities.” Which I totally get that. I totally get that. So this kind of… It’s like a little bit positioning, and I also kind of felt like maybe also too, Fred is like, “I’m afraid to charge for it.” Especially if the kids love it.” So I don’t know. I could see scenarios where the relationship with the charity could be worked out where the charity does lots of case studies and does testimonials and things, and kind of makes it so that they become like marketing in a way. 

But I think that there’s also potentially product/platform opportunities or app opportunities, whatever that looks like, to ultimately generate, act as a growth loop. And then I think there’s this other part that’s like the conversation with the charity about, “How do I position this in way where they’re going to hopefully get it, see value, et cetera?” There’s many layers to it.  

Rob Walling:
Yeah, I agree. The way I think about it is, the charity sounds awesome. They’re helping sick kids. And I think if you’re going to do it, yes, ask for… I love the idea of case study testimonials as marketing material. And if you ask for one or two emails to their list a year, that they promote you or something on social, what’s their biggest social channel. But I would be super specific about it. I wouldn’t occasionally mention. Like, what kind of feels right to you and not too much? Is it two mentions a year across channels? Is it three mentions? 

And then, assuming the costs aren’t big to serve these customers, I’m just… It’s PC software, so I’m assuming again, it’s not like a kajillion dollars. I would probably just go into it hoping that it broke even. And at best be like, “You know what? If this never does anything, at least I did good for the world, and at least I did good for this charity.” I don’t see a strong reason not to do this. Now, if they weren’t a charity… When I first read the question actually, because I read the transcript first, I didn’t catch that they were a charity. 

And I was like, “No, don’t do that. Don’t give away your software so they could talk about you.” But then I was like, “Oh, it serves children with prolonged stays in hospitals. Oh, I would just do that out of the goodness of my heart.” You know? And try to help them, again as long as the costs aren’t high. Anything, any marketing or any value you get out of it, to me, I think is a bonus. But I wouldn’t have high hopes for something like this. Of like, “Oh, I’m going to sell a bunch of pieces of software. “Because I think you might be let down.  

Asia Orangio:
Very, very valid point. That makes me wonder, there’s a charity, but are there other customers or users who are maybe much better fits for these asks? So it is a little bit more of a quid pro quo. But yeah, that’s a tough one. That’s a tough one.  

Rob Walling:
It is. And you do have ask yourself, if you’re trying to get a startup off the ground, as you said earlier, is this the biggest growth potential opportunity you have on your radar right now? It probably isn’t. But then we have to ask ourselves, who are we as people, and what are you willing to potentially sacrifice in terms of a time investment or in terms of some revenue, or whatever it is that you’re going to sacrifice, with the hopes of helping a charity and helping kids in hospitals, right? And so I think each of us has our own answer to that. 

Most of the time on the podcast we talk a lot about maximizing our growth, maximizing our enterprise value, while maintaining healthy relationships, right? While not driving our family and other relationships in the ground. But in this case, I think there is even that third factor of kind of broader world, and whether you’re willing to sacrifice a little bit in order to help them out. So thanks for that question, Fred. Hope that was helpful. For our final question of the day, we have a video question from Patrick on how to advertise an unknown product category.  

Patrick:
Hey, Rob. Thanks for all the great episodes. Huge fan. Steve Jobs is famous for saying that… What is it? “People don’t know what they want, until you show it to them.” This can be a really good thing, because it means you’ve got a blue ocean new product like the iPhone. The problem I’m running into, is how do you run advertising campaigns for some things people don’t know exits? My product is in the B2B SaaS space. It’s called ThreadLive. It’s an email workspace designed for B2B sales and procurement people, and project teams that are spending hours every day managing emails. We got a Chrome extension that goes right into Gmail, so you can quickly mirror emails into our platform, and then manage them like you would a file, or share them with other people. 

Anyway, our initial focus is single player mode, MVP. And we plan to introduce collaboration features in the future. We’ve got a freemium model, and then after about two months of use, we’ll be charging $20 a month. So, clearly this is a product that needs many users to be successful, so we need a low-touch model. The problem is there just aren’t a lot of people searching for something they don’t know that they need. So, what do think is the best way to contact and market to these types of users? Thank you.  

Rob Walling:
So, before I kick it to you, Asia, I want to do my famous startups for the rest of us, comments, about, please don’t use Steve Jobs or Basecamp as examples. Because, Steve… when he was 23, guess how much he was worth. $1 million. Which is actually about 5x. He would be worth $5 million. When he was 24, he was worth $10 million. When he was 25, he was $100 million. You know what I mean? And so, if you’re in that case, then use Steve Jobs as an example. If you co-invented, or, say, co-founded a company with the inventor of a once-in-a-generation device, the Apple computer at the time, then use him as an example. If you bootstrapped to nine figures in ARR, and you were one of the first SaaS apps ever, and you did a really good job executing, but also got a little lucky, as Jason Fried said on the MicroConf stage, then use them as an example. 

Otherwise, you’re not in their shoes. You don’t have the resources. You can’t. Basecamp comes and says, “We don’t do marketing, we don’t track analytics, we don’t track opens.” And so should you? Well, are you Basecamp? Keep in mind who you’re following. So I just want say that, as anytime I hear the Steve Jobs, the Basecamp, or Henry Ford’s often quoted, and I’m like, “Oh, so you’re in their boat, then.” Because no, you’re not. Most of us aren’t, and we have to grind and we have to do things a little differently. And I want to be honest, Jason Fried and DHH are TinySeed mentors. They invested in our first fund. So I’m not throwing shade at them, but I’m saying they often give advice that fits them really well and worked for them, that I think it won’t work for 999 out of the next thousand startups. So anyways, with that, Asia, you want to take a crack at this one?  

Asia Orangio:
Yeah. Oh, I’ll throw in timing as well. I think, thinking about timing, and curves and all of that, and when certain things… But anyway, okay. So this question is really all about, I’m hearing there’s messaging challenges. I’m also hearing a little bit positioning, and if you follow the April Dunford model, of course, then you know that messaging is derived from your positioning. So it really starts with pretty solid positioning, and then of course we get into messaging. The thing about customers not knowing what they want, until they have it, the thing about that statement is that customers are never going to be good product managers. They’re never going to be able to tell you what features to build or what to do. They can really only tell you what they want. And it’s our job as product managers and product owners to extract that at scale at a very high level, and also get into the nitty details of, okay, how does this actually translate into value, based off of what the customer is asking for? And how can this be translated more globally across the whole product? 

But, even when we do that, what we find is there is some narrative or story that we were telling about how this product ultimately contributes value to people. And even if you don’t have a software category that this fits into, that doesn’t necessarily mean that you’re not going to have words for how to describe this to folks. Because ultimately, customers connect the most with what their pains are, what they’re struggling with, and what they’re hoping to achieve and to accomplish. Ideally using your product. But, if we were to get break this down two jobs to be done, which is a framework for interviewing customers and really understanding what progress they’re trying to make, what we’re going to find is that customers, ultimately, once they have their jobs, they come to you, you satisfy the jobs. And then over time, the jobs change. And new jobs pop up, and hopefully your product still surfaces or satisfies those needs, and otherwise they turn. 

But, all that’s to say, though, that most customers are not necessarily looking for, “I want the absolute best CRM,” and then they go to the CRM category and they troll through… Usually it’s, “Yeah sure, I want the CRM but there’s all these other things I want about this.” And so my question to Patrick would be, it’s okay if there’s not really a category for this. That actually is the least one my worries. I’m far more concerned with how does your customer describe it, and therefore how do we now use that to inform our messaging? And that’s what we use in our advertising, that’s what we use on our website. That’s what we use to really connect with a customer who’s trying to buy this. The first part of the question, that’s where I start with. 

So the second part is really all about… So, people aren’t searching for this, because there’s no software category for this, that people are not searching for it. But going back to what I was saying earlier, my thinking around this though, is there might not be a category for this that they’re searching for, but they probably are searching for, “I have this problem, I have this pain.” And what are y’all using to satisfy this problem or this pain?” And again, this is probably gonna be long tail keyword type work, but that’s the first thing that comes to mind. I think the second thing that comes to mind, is we are making the assumption that search is going to be the first way that people discover this as a product. So I think my other question of course would be, if we were to sell this to folks, what are some other ways that people might discover this product in the context that of course they’re using it in? So, this is a… What was it? It’s a Chrome extension?  

Rob Walling:
Yep, for email productivity.  

Asia Orangio:
Mm-hmm. This automatically makes me think about what, about, oh gosh, like the Google App Store, or the Chrome App Store. Is there discovery happening through that? I’m also curious too about, what are some of the…. are we translating this into other browsers? There’s many other ways to distribute, is what I’m getting at, beyond just search.  

Rob Walling:
I like those. Yes, anding you, because I agree with those, and I want to kind of pile a little bit on. You actually mentioned early on about product, and how as product owners, we don’t build what customers tell us to build. We hear what their problems are, and then we have to translate that into a solution, right? So I did a rant on this podcast probably within the last year on a solo episode where I talked about the Henry Ford, “If I’d given them what they wanted, they would have given a faster horse.” No, you wouldn’t have. Not if you’re a good product person. Because they would’ve said, “A faster horse.” And I would have thought, “Well, I can’t make a faster horse. But, could I make a train run the same routes as a…” You know what mean? 

And you eventually get to where it’s like, “Could I make a device that…” Because they don’t want a horse, they just want a faster X. So what is that? Is that a steam powered car? You know what mean? Like, you get there. And if you’re a good product person, again, yeah, you figure it out, right? The second thing I’m thinking about… I guess I want to piggyback on what you said, of it doesn’t just have to be search. But, what you do need is a massive traffic channel. Massive, to make this work. The only companies that I know, who have made this type of low price point freemium model work, get hundreds of thousands, if not millions of uniques per month. 

Whatever that channel is, usually it’s search, to be honest. Usually it’s content and search, or they have a media company and they an audience. But there’s a possibility that the Chrome extension and App Store has enough traffic to do it. I don’t know of a single example. I was trying to think as you were talking, about a single example of anyone who’s bootstrapped a business like this. Because the ones that I know where it truly was freemium and then 20 bucks a month, are the Dropboxes. How much did they raise? A kajillion dollars. Mint.com, throwback to 20 minutes ago, a kajillion dollars. Trello, Hootsuite, Spotify. You know what mean? On and on and on. Yeah, they’re all freemium. They made it work and they have less than $20… And even think of Netflix with the free trial, and then they’re now 20 bucks, and HBO, and this and that. I know that’s content, not software. 

But, all of them, just bank accounts, vaults filled with money, with rooms of money. So if you’re trying to bootstrap a business, unless you were showed amazing traction and growth, TinySeed would not invest in this business. Because, I don’t believe that you can bootstrap it. I say that a little more confident than I am. I don’t want say 100 % never going to work. 95 % sure, this is an inviable business without quite a bit of funding. 

And it’s because you need to last. You need to last for years. Because Dropbox, remember their early numbers were like “3% of our users used it for free for a year, and then convert to paid.” And that was a pretty high number, actually. So do the math on that, 3%. So let’s say you have 50,000 free users, which is actually a lot. That’s a lot of free users who are… 50,000 active free users. So after one year, that means you’ll have 1,500 paying customers. And at 1,500, doing internet math, live on the internet, times $20 a month, is $30,000 of MRR. 

That is not a viable business, because you’re never going to get to 50,000 active… because 50,000 active freemium user, even if you’re sticky, what is that? 250,000 total premium signups? I don’t know what… you know, I’m kind of making up numbers here, but you got a big drop off here, so you got to think about this funnel. And other than just having a kajillion search visitors hitting you every month and replenishing that, I don’t know how else you do it, unless it’s to your point, one of these other channels that you were talking about. 

Those channels just have to be really wide. You don’t do this with 10,000 uniques a month. You do it with half a million uniques a month. If you do it at all, you do it with half a million or a million. So, this is where I struggle. I mean, on this podcast, I kind of have said, I don’t answer questions about two-sided marketplaces, about bootstrapping them, unless you already have one side of them. Because everybody seems to want to do it, and it’s just like, it doesn’t work. Stop, please. 

The other thing is B2C. And I know this is not B2C. You know, it’s B2B because it’s email productivity. But, the funnel is like a B2C product. And unless you’ve made this work, or unless you know what you’re doing, meaning you are Ruben Gamez or Hiten Shah, or Brian Balfour, or you’re getting mentorship from someone like that and you’re really trying all the things, just setting up the funnel in the way that Dropbox, Mint, Trello, Hootsuite, did, just setting up that funnel, doesn’t make it work. Because it’s cargo culting, right? It’s picking one thing and being like, “Oh, this works because of that.” And it’s like, no, it works because all of it was there. If any one of those pieces hadn’t worked, the business was completely inviable. 

And the thing we don’t see, is it’s a survivor bias a bit. It’s like, what about the… Again, I mentioned Dropbox, Mint, Trello, Hootsuite, Spotify. What about the 99 others or the 10,000 others that just didn’t make it, because they tried this model, and later they pivot? So, I don’t want to be the naysayer. I’m positive, Asia. I want to build people up, but this is a business, from what I’m hearing, I’m just skeptical it’s going to work. But I’m not saying it’s not going to work in any form. It’s like, what would it look like to not do freemium? Or what would it look like to charge $200 a month, or $250 a month, and only sell to enterprise. You know? What else can we tweak to make this a much more viable business? That’s probably where I would start if we were to say, do a strategy session on this.  

Asia Orangio:
This actually does make me think though of businesses that, they’re in the process of monetizing their Google Chrome extensions. So Adblock Plus, I don’t know if anyone’s using Adblock Plus, but they have within the last, I would say, six months or a year, have aggressively moved to, “Hey, please pay us.” And it is shocking, but also not. Because obviously I’m in the SaaS world, so I’m using software all the time, all day, every day. But, it is shocking how much I don’t want to pay for it, because I’m so used to having it for free. And I’m just like, “Ugh, I don’t want to have pay another thing.” You know? 

But, I almost guarantee, if this had been more, if I had the free trial, and I saw how amazing it was, and then… If I had been trained in that way, I probably would be more like, “Oh yeah, I’ll pay for this.” Usually, freemium, it’s crazy in the numbers game, but you’re exactly right. In order for that to be viable, it’s gotta be a two to 3% conversion rate into paid. And there are businesses who of course achieve this, and actually beyond. I’ve seen it. But I would say most folks are much below that.  

Rob Walling:
Most are, yeah. Most are below 1%.  

Asia Orangio:
Yeah.  

Rob Walling:
That, I see. I see quite a few freemium. There is a significant enough number of TinySeed companies or companies that I’ve advised, that have freedom plans or have had freedom plans. And I see the numbers on them, to know that yeah, 3% usually you would celebrate that. One other thought, I wanted to bring up the five stages of awareness. And I did a MicroConf talk in Europe about this a couple of months ago. I think that talk will be available for sale here soon. But, if you have never seen this diagram, you can type in five stages of awareness, Eugene Schwartz. 

And really, Patrick’s question was not about his business model, and asking me to tell him he shouldn’t do it. His question was like, if no one’s searching for it, which you addressed, maybe people are, maybe in different ways, but, if no one’s searching for it, how do you get awareness? And realistically, you have to do what you said, which is go after the problem. Because they’re not searching for a solution, but they probably do have this problem. And five stages of awareness are unaware, problem aware, solution aware, product aware, and most aware. 

In a perfect world, you cater to the last two of those, or maybe the last three. That they are looking for a solution, they know the name of your product, and they really know the space well. As you go further up that chain, so unaware and problem aware, becomes way more expensive, way more time intensive to capture them. And that’s what I was saying with this, is, based on your freemium model and your price point, you need a huge funnel, very wide. And usually, that search can be other things. 

Of course, if you’re truly just trying to advertise, then you go on Instagram. I mean, how much stuff have I bought, where I barely had a problem, or I really was unaware that I have a problem? Like the Amazon flash sale. Oh, I didn’t realize that I needed another pair of slippers, but they totally advertised to me on Instagram. Or, I bought this thing called a flexiCam, which I kind of realized I had a problem, but I didn’t realize there was a solution. 

And it’s a see-through thing where you hang your webcam down in your screen, so you can hang it over a Google Doc. PlexiCam I believe it’s called. I just saw an add on Instagram, I was like, “Oh, yeah, I do have that problem.” I had no idea there was a solution. And so they ran an ad. Here’s the thing, ads are expensive. And that’s why I said, if you’re going to try to do this with ads or whatever, you don’t bootstrap this business. That’s my sentiment, is you do have to raise buckets of funding to be able to optimize that ad funnel. And then why does PlexiCam and Amazon, why do they work? Why can they run those ads? Well, it’s because they sell a product with a decent chunk… You know? That PlexiCam is $50, $70, whatever it is. So they paid off that ad spend real quick. Patrick’s in this case, said “Well, they’re freemium for two months. Only if they’re a heavy user, then they convert to 20 bucks…” You know? 

What are we talking? Six months out, before we get payback? That starts to be challenging. And it’s going to be further than six months, because you’re going to lose a bunch. So you’re talking a 12-month payback, a nine-month payback. And as a bootstrap, you don’t have the money to keep doing that.  

Asia Orangio:
I think too, it seems like there’s an assumption that people don’t actually know about email collaboration tools. But there are absolutely shared inboxes. Front is a huge one. There are shared inboxes that are geared to specific audiences, like support, for example. But email collaboration and shared inboxes, they’re not a totally new concept. It just might be new for maybe the people he’s targeting. But that doesn’t necessarily mean that people are not solution aware. His audience, they are probably solution aware. They just don’t know that his product is in existence. And that’s a very different scenario. 

That’s actually a much more favorable ecosystem to be in. Because, what you don’t want is people who are truly unaware. Like, they don’t even know that they have a problem and this is painful for them. And those are people you don’t want to waste your time on. But it’s very possible that they actually are problem aware. They don’t know that ThreadLive actually exists. And that’s the difference between solution aware versus maybe product aware. That’s the difference. But I would argue that they probably are aware of other solutions. They’re just maybe [inaudible 00:50:58], and they don’t actually solve the problem, so they don’t don’t buy them, they don’t do them. 

But this warrants much more discussion, I think. I don’t think we can assume that they are truly unaware of solutions like this. It’s just much more likely that they’re unaware of ThreadLive, specifically.  

Rob Walling:
I like that. Yeah, I like that clarification. So thanks for that question, Patrick. I hope it was helpful. Asia Orangio, thanks for another banger episode.  

Asia Orangio:
Did we do it?  

Rob Walling:
We made it through. For folks who don’t know, you are the founder of DemandMaven at demandmaven.io. And of course you are Asia Orangio on the Twitters. Thanks so much for joining me today.  

Asia Orangio:
Thanks so much for having me.  

Rob Walling:
Thanks again Asia, for coming back on Startups for the Rest of Us. I hope your new year is going well. I hope it’s off to a great start. I’ll be talking back at you again next Tuesday. This is Rob Walling, signing off from episode 695.

Rob Walling:
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Welcome back to Startups For the Rest of Us. I’m your host, Rob Walling. And today I look back at my 2023, and I reflect on the highs and the lows of the year. I’m going to talk through my experiences working on and growing TinySeed, and MicroConf and this podcast because those are the three things that I focused on throughout the year, as well as give some reflections on how I can improve and make things better for myself and those around me in the year ahead. 

If this is your first episode of Startups For the Rest of Us, or you’d prefer not to hear Inside Baseball about what’s going on with me and my professional life, maybe even a little bit personal, we’ll see where it goes, you probably want to either go backwards or go forwards. Skip back forward weeks, go ahead one week, this really is going to be me talking about my experience of this year. 

And I’m not sharing it just to make myself feel good or to hear myself talk. I’m sharing it so you can perhaps see what it’s like for someone who, I think by all measures, is pretty successful, but the things that I still struggle with. I think, at a certain point, I thought, if only I had an app that did $3,000 a month, everything would be perfect. If only I had a $10,000 a month SaaS company, then I could quit my job and everything would be great. If only I built a company to multiple seven figures in ARR and then sold it for life-changing exit, if only, on and on and on. And it’s just something to realize that there is the arrival fallacy that you’ve never arrived. And when you reach that next mountain, there’s always another one on the horizon. 

And so I’m sharing this, hopefully, to help motivate you, inspire you, and show you the reflection process that I go through at the end of the year to figure out how to make the next year better. So hopefully there are some nuggets in this episode that you can learn from, but my feelings won’t be hurt if you decide to skip to the next one. 

Before we dive into that, we are running the next edition of the State of Independent Saas survey and report. Through Microconf, we’ve run the survey a couple of times, and then we decided to take last year off because the information coming through wasn’t changing. The survey is about 40 questions. It takes less than 10 minutes to complete if you have your metrics handy. And then we take that data from what usually winds up being between 600 and 1,000 independent SaaS companies. These are bootstrapped and mostly bootstrapped SaaS companies, and we compile a report with all the key findings and helpful industry benchmarks that you don’t get anywhere else. The survey closes soon. We could really use your input. All the data is kept anonymous, and every survey response we get makes the report that much better. 

Head to stateofindysaas.com to complete the survey, and we’re going to enter everyone who completes the survey into a drawing for a free ticket to Microconf US 2024 in Atlanta. That’s more than a $1,000 value. I know it’s a lot for me to ask you for 10 minutes out of your busy day, but it really would go a long way towards making this year’s report the best yet. We are mixing it up this year asking different questions and pulling out different findings than you’ve seen in the past. So even if you’ve filled out a prior survey, it’d be amazing if you could head to stateofindiesaas.com and complete it. 

If I were to describe how 2023 has felt, how things have gone, it really is almost polar opposites. It’s incredible growth. I think this year had one of the largest audience growth years that I’ve ever had. It might be the number one year in terms of how much my audience grew, between publishing the SaaS Playbook and doing the Kickstarter for that in May. Sold about, I think, just under 3000 copies there. And just last month, past 10,000 total copies sold of that book. And to put that into perspective, it’s self-published book, Start Small, Stay Small, which I published in 2010, has sold a total of just under 15,000 copies in 13 years. And that’s been amazing. I mean, that book has made me… I’d have to run the numbers. Between selling on Amazon and Audible and then selling directly, it’s got to be 350, $400,000 on Start Small, Stay Small. And the SaaS Playbook already passing 10,000 copies sold, I will admit is beyond even the ambitious goal that I had. 

I was happy with the Kickstarter raising low six figures, $108,000, and selling, again, almost 3,000 copies. What I wasn’t prepared for was the continued strong sales. And I think I’m a bit naive. I’m a bit naive on that because I always underestimate, I think, the power of creating good content and the willingness and desire for people to share that. So I’m definitely stoked to have that many copies sold. 

And then, in terms of the audience growth, this year, if you combine MicroConf, TinySeed and this podcast, our email lists and the listeners of this show and the YouTube channel subscribers, it is absolutely past 100,000 people being reached on whatever, a weekly and monthly basis. Depending on how you count it, even if you dupe and assume there’s overlap, we’re probably past 150,000. It’s a lot of people. Everything’s working as it should be. As my mission that I think has become the mission of TinySeed and Microconf is to multiply the world’s population of independent self-sustaining startups. And in order to do that, we have to reach a lot of people. The more people you reach, the more people that you can help and educate, potentially advise, invest in, match together, connect with one another, and have an impact on. And so, for me, audience building and increasing our reach is not a vanity metric. It is a top line key performance indicator of how well we’re doing. 

And so you contrast 10,000 copies sold of the SaaS Playbook in the last seven months. You contrast our reach crossing 100,000 or 150,000, it depends on how you count it, say 150,000 person reach, and you contrast that with something I talked about in a podcast episode probably five or six months ago, I think it was during the summer where I said, “I’m not burned out, but I can see it on the horizon.” And I talked in that episode about a big piece of this… I don’t want to say burnout because burnout is a very technical term, and I have not been burned out this year, and I’m not burned out now, but it’s shorthand for being tired. Maybe I’ll say I’m tired or fatigued or world-weary, whatever adjective we want to use. 

And for me, a big piece of that in the summer was the grind of our content schedule. I record 52 YouTube videos a year. I record 52 episodes of this podcast a year, and then 52 episodes of the MicroConf podcast a year. So you’re talking 156 pieces of content that we push out that doesn’t include MicroConf remotes in-person MicroConfs, five TinySeed events. It’s a lot going on. And while one could argue… The MicroConf podcast, I only record intros. It’s not a full podcast I have to do custom information for, but it’s all work and is something that it doesn’t go away. I don’t take a vacation, or when I take a vacation, I have to record ahead. 

And so the way I started getting around that fatigue or tiredness of the grind was, A, we started finding some folks who could help fill in on the YouTube channel. So I didn’t have to record four videos a month, maybe it’s three. And I started batching recordings. So I would record four YouTube videos in a week, and then I was able to take three weeks off. And that worked until the fall. So this fall, I traveled more in a maybe 10, 11 week period than at any other single time in my life. And for those of you who travel a lot for work, especially if you have a family at home that you like hanging out with, I like my family. I like my house, I like Minneapolis. I like my dog. 

So while I don’t mind being away from home taking whatever it was, six, seven trips, two of them to Europe in a pretty tight timeframe with the time zone changes and all that, it starts to take its toll on you. And there’s a physical toll of the sleepless nights and taking melatonin to try to get on time and then flying back and waking up at four in the morning and trying to operate during the day. And there’s the mental toll and the emotional toll of not being around “my people,” my family at home, and the comfort and I think the stability of what we’ve built here in Minneapolis. 

And so this fall was tough, and it was a combination of things. It was a perfect storm of, we had multiple TinySeed events, we had multiple MicroConfs, and I agreed to speak at a couple of events. And now that I published the SaaS Playbook, I’m getting speaking invites again. And around all that travel, of course, I was continuing to try to ship YouTube videos or I would say continuing to ship YouTube videos and episodes of this podcast. As I commented on a previous episode, you’ll notice there were more solo episodes than usual, and it because I just didn’t have any time to plan to record with anyone. And when I was at home, I needed to hop on it real quick. And oftentimes I had to record an episode last minute right before a flight was taking off. So I didn’t have time to schedule it. 

And so the show must go on, as I say, and I feel like I was able to maintain the quality of the YouTube videos in this podcast, but it all takes a toll. And so that’s what I’ve been reflecting on as the fall has wrapped up, because I’m done with work travel until January. I have one trip there, and then I don’t believe I have any more travel until April, which is MicroConf in Atlanta. If you don’t have your tickets yet, microconf.com/us. 

And so any year where the podcast and the YouTube channel and our audience in general grew faster than any a year prior, where TinySeed was firing on all cylinders, we funded 40 something companies this year, bringing our total to more than 150 companies. And the MicroConf YouTube channel, I realized I got an email the other day that our YouTube channel passed 3.5 million total views, which is pretty incredible. And we ran… I’m trying to think of how many in-person events. I think it was six or seven successfully broke even, made a profit on those. We matched hundreds of folks into mastermind groups. Everything’s working, everything’s up into the right, and yet you can still feel fatigued. You can still be approaching burnout. And if you don’t catch it early and do something to mitigate that and make a change, then you’re going to hit it. 

Once you get into burnout, it’s really hard to undo. Usually, you have to take months off. Sherry and I have a chapter in our book, the Entrepreneur Guide to Keeping Your (beep) Together, about if you’re dealing with burnout. And it’s pretty drastic what you need to do. And so I don’t want to get there. So you have to make changes early because if you ignore it, it’s not going to go away. The ostrich approach to burnout, putting your head in the sand and thinking it’s going to get better by itself, it doesn’t work. And in fact, I’ve tried that in the past and it didn’t turn out well. And so my thinking at this point is, all right, all this has happened. How do I avoid this next year? Because I’m in a lull now, and I say that in the most positive way that I possibly can, relax, not traveling, don’t have a ton of work on my plate other than things like this podcast and the YouTube channel. 

And so as I look ahead towards next year, I think to myself, okay, how can I do this better? And so there are a few changes, and it’s a few changes I’ve talked with my team about already. One is to continue to lean on my team around me to help create YouTube videos such that every YouTube video doesn’t need to be me. And it looks like for the next couple months, I think I’m recording about half of the YouTube videos that I traditionally have, which is great. I’m also taking time off. I’m going to take between three and four weeks off over the holiday break here, Christmas and New Year’s, and then in the early parts of January because it is pretty quiet and the ability to just unlock, unplug and not feel like I have to be thinking about, I love SaaS and I love startups. I mean, this is my life. It is my life’s work. It is my life’s mission. It’s what I think about every day, but even something you love, you sometimes need a break from. And that is the case with me right now. 

And so after recording this episode, I have another couple calls and then I’m unplugging. I do have some calls tomorrow, actually. This is what always happens, is I plan to take time off and things sneak in that are important and that I need to do, but that’s what I’m thinking about and that’s the direction I’m heading towards is temporarily taking some time off to recharge the batteries. I’m going to not think about work or… Actually, what I will wind up doing is thinking about work, but at a very high level. I’ll be thinking about strategy and high level vision of what do I want 2024 to look like, where do I want MicroConf, TinySeed and this podcast to be at the end of 2024? What are changes that may need to happen that are beyond things that I talk about on this show, beyond just handing off a couple YouTube videos each month? 

Another one of those changes is the amount of travel. And I know that for me at this point in my life, I can totally travel a handful of times a year, but six, seven trips in 10 or 11 weeks, it doesn’t make sense. And it is 100%… Especially with the time changes, the eight-hour time changes were rough. And so that’s something I’m looking at for next year is, how do we adjust schedules to make things more productive for everybody? 

That’s the other thing is I say this as if I’m the only one that got burned out. There are other people on my team who have really struggled with just getting back into the mindset of being productive. Pretty much everybody got sick, and that’s a travel thing, I think, less than a being around people. But whatever it is, almost everybody on my team who traveled got sick. Knock on wood, I didn’t. But really took a toll on the team as a whole. And so it’s one of those things where you look at the calendar, you’re like, this isn’t that bad. Hopping a flight to Miami and then heading to Tennessee to do a talk and then heading back and then a week later doing something else. It didn’t look that bad and it doesn’t look that bad. But the way it felt, for me, now I know. In the future, I just have to say no to some things. I can’t do everything. We’re all still learning. 

And when I was younger or at a different time in my life, maybe if I wasn’t married, didn’t have kids, there’s all these things that could make it different and could make it feel different. But for me, as I evaluate what gave me life this year and what didn’t, the things that gave me life, were shipping this podcast, the reactions to the YouTube videos, publishing the SaaS Playbook, putting content into the world, putting things into the world that inspire and motivate and educate people so that they can change their lives. Because after all, that all serves my mission of multiplying the world’s population of self-sustaining independent startups. And that mission brings me so much excitement and joy and motivation. And so being able to ship that content… Content’s such a generic word, but it’s books and it’s podcasts, and it’s YouTube videos and even conference talks. Being able to inspire, motivate, and educate people has been super fulfilling. 

And so I have to figure out how do I keep doing that in a sustainable way such that I… I’ve been doing this, what? I’ve been blogging since 2005, so 18 years, almost 19 as of a few weeks from now,.and been writing books since 2010, been podcasting since 2010, 13 years, almost 14 years. I’m going to keep doing it. I hope you don’t think this episode is me saying, oh, I’m retiring from all this content because that’s not the thing. I’m actually figuring out how do I continue to do that at the pace and the quality that I have been, and maybe even improving the pace and improving the quality, but you get the idea. 

And then on the flip side, when I look at things that took life for me or that drained energy, definitely travel is one of them. And it was the pace of travel. It’s not ever getting on a plane because I’m going to Cancun with my family in a couple of weeks and that is going to energize me. Being on the plane will not sap energy at that point. And so it really is the pace of travel and the grind of it. And there are some additional things that wind up on my to-do list in my email box, in my Trello board that certainly don’t give me life that I’m also revisiting in the sense of, do we really need to do this? Can I hand it off to someone? Can I just not do this? So I have my shortlist there that isn’t as relevant to share with you on this podcast. 

So as usually happens at the end of the year, I’m cautiously optimistic about what the next year looks like because I feel like I’ve experienced some high highs and some low lows, some incredible challenges that I’ve overcome, but also some challenges that have really beaten me down, but I’m making a change. That’s the key, is if I were to continue doing the same thing and expecting different results, that would just be dumb. And so that’s my charge to you as you listen to this episode, is what do you need to change in your life to keep doing the things that you love to do less of the things you don’t? That really starts with just evaluation. What do you love doing? What’s brought you life this last year? What has sucked energy over the past year? 

And whether you get away and do a true founder retreat, which actually I have not this time, I just haven’t had the time for it, or whether you just spend an afternoon or a few days, evenings, weekend just thinking about these topics, make that list, do some journaling, make some bullet points in a notebook, and then figure out what changes that you need to make to live a better life, to enjoy your work more. If you don’t like your job, it’s no one else’s fault because you’re your own boss. You run the company. If you don’t love running your company, then change it. Figure out how to make it sustainable. Figure out how to make it enjoyable for you. 

If you are going to go on a full founder retreat, my wife, Dr. Sherry Walling, has written a book called The Zen Founder Guide to Founder Retreats, and it’s an ebook. I think it’s $20 on Gumroad. You can just Google it. And it’s super helpful. It’s a whole list of questions and practices for thinking through what gave you life and what didn’t, and it goes more in-depth on that. But whether you use that or you just do a very simple version like I’ve done this year, I wish you the best of luck as you embark upon this journey and you transition from ’23 to ’24. And I hope that when you’re done with this exercise, I guess whether you do it or not, I hope that you’re looking forward to 2024 with cautious optimism as well. 

Thanks so much for joining me this week and every week on the show. It’s great to have you here. And if you keep listening, I’ll keep making these. This is Rob Walling signing off from episode 694.

Rob Walling:
It started for the rest of us. Today I have a mostly bootstrapped startup founder on the show. He is the founder of Postpone at, postpone.app. We’re going to talk about how he’s grown Postpone from zero to mid six figures, and how he came up with the idea by scratching his own itch. We talk about some early growth tactics he used, a recent price increase that was stressful, but highly successful, the platform risk that he’s experienced with Reddit, and more topics for bootstrap founders like yourself. It’s a great interview. I hope you enjoy it. 

One more thing, we’ve recently reopened the doors for our online community, MicroConf Connect. MicroConf Connect is our virtual hallway track. It’s a vibrant community of SaaS founders helping each other and discussing wins, challenges, and frankly, how to grow faster. A couple of months ago we paused new signups to improve the platform based on your requests. With MicroConf Connect 2.0, we’re rolling out three membership tiers packed with new perks, like weekly coworking, exclusive discounts, a searchable content library and more. Whether you’ve been a member of Connect or not, you really should check it out, microconf. Connect.com. And with that, let’s dive into my conversation. 

Grant McConnaughey, thanks for joining me.  

Grant McConnaughey:
Thanks so much for having me, Rob.  

Rob Walling:
Longtime listener of the show, and now you’re going to be on it. Are you going to love listening to this episode and hearing your own voice?  

Grant McConnaughey:
It is going to drive me crazy, but I will force myself to do it.  

Rob Walling:
It drives everyone crazy. I view interviews and talks. They’re painful for me to watch, but they’re game tape. How can I get better as an interviewee, an interviewer, or someone who’s doing a talk? Your app is Postpone. It’s at, postpone.app. Your H1 is the Reddit, Twitter, Instagram and TikTok scheduler for creators, automate sharing your content across all your social media accounts, and grow a following. So folks know you are a TinySeed company. You started developing Postpone in January of 2021. How did this come about? Folks who listen to this have either no ideas or a lot of ideas. Did you have a cajillion, and you picked one, or was it just so obvious to you this needed to get built?  

Grant McConnaughey:
Yeah, sorry, and just to clarify, it was January, 2020.  

Rob Walling:
Thank you.  

Grant McConnaughey:
So started working on it a couple of months before COVID hit. It really started as a New Year’s resolution project. I wanted to grow a following on Twitter, write blog posts, and get some sort of following about software engineering and things like that. I have a lot of respect for folks like Adam Wathan who’ve built this incredible following on Twitter, and then found ways to build products that those folks are interested in. And it becomes this feedback loop where you’re just building cool stuff for people. They’re buying it, you’re growing an audience, and it’s just this self-sustaining thing. So to do that, I really wanted to write blog posts and share them on Reddit as well as Twitter and other places. If I found that there wasn’t really a Reddit scheduler that existed, or at least not one that I thought was very professionally looking, there’s a couple that existed. 

I remember thinking, “I feel like I could do this. Maybe there’s other folks who also want to post on Reddit and treat Reddit the way they do their Twitter account.” Threads wasn’t around at the time, but those kinds of social media apps. So I ended up just working on it, and had this idea of, “Why don’t I build the Reddit app? I will use the Reddit app to market my own blog posts. I will write about building the Reddit app, and it will become this self-sustaining thing where I build the product, I use the product, I write about the product.” S that’s really where it ended up starting, just something I thought I needed myself and hey, maybe other people will find value in this as well.  

Rob Walling:
So scratch your own itch, which cuts both ways. Sometimes that works and sometimes it doesn’t. Sometimes you’re the only one that needs it, or no one’s willing to, but you need it, but you really wouldn’t be willing to pay for it and other people wouldn’t, or you can’t reach the customer. There’s a bunch of reasons why it potentially might not work to scratch your own itch. If someone comes to me with a scratch your own itch, I usually say, “Great, now, find 10 other people who need it. Do some validation.” It’s not a hard and fast rule, but it gives you a little more certainty that it might be actually valuable. Did you do any validation, or did you just dive into the code?  

Grant McConnaughey:
So the timing of Postpone is really a big part of the story as well. I started in January, 2020 because I was managing, and just really missed building stuff. Then March, 2020 rolled around, and as we all know, COVID hit, we’re all staying at home. So the project turned into this something to work on for fun, and I really didn’t do a lot of validation because I just enjoyed working on it. I enjoyed having something that I could write about. So there wasn’t a lot of that validation, but over time, more and more people would find it, and then that’s where I would start. I didn’t seek validation, but it eventually came after building it for months and months just for fun really.  

Rob Walling:
Your day job was at Zapier. Everyone who’s listening to this would know it. So you were an engineer at Zapier, and then nights and weekends you were building Postpone. Did you launch in March so did it only take you a couple of months to get to enough of an MVP that you felt like others could use it?  

Grant McConnaughey:
My whole goal for the year was to make a single dollar online. It’s really just an excuse to sign up for a Stripe account, have a small enough goal to just do something that someone could send me some money for, and have some project that people hopefully find value in enough to pay for. Yeah, so I tried to get it out as quickly as possible. That MVP is embarrassing. I would love to go back and see a screenshot of it. I know that it would be so bare bones, but it did the MVP. It scheduled Reddit posts, told you how they performed, the very basic feature that you would expect in something like this, and got it out in about 10 weeks.  

Rob Walling:
So that’s where. Some software developers talk about when they look at the stair-step approach, and they look at a step one business, very simple thing. They say, “What if I can just ship the whole thing, or ship an MVP in four weeks, five weeks of nights and weekends especially?” I often say, “I don’t know if I’d validate then. If I can just ship.” So that’s actually a pretty quick way to validate. Maybe I’d have one conversation, or maybe I’d do a little less. But it’s not like, if I have to go six months, I need to know that there’s going to be some type of traction for this. Getting it out in 10 weeks, 10 weeks is not nothing, but especially nights and weekends, it’s pretty impressive. What was the reception like? Did you launch it on, did do Product Hunt, or Reddit, or Hacker News?  

Grant McConnaughey:
I did Reddit, Product Hunt, Twitter, Indie Hackers. I posted it everywhere. The reception was frankly crickets. You can put all this work into it, and do this big grand reveal, but at three or 400 followers at the time, there was mostly just, “oh, that’s cool. Yeah, good for you.” So it took quite a while to actually even get that first paying customer. I remember, I think it was July, so it took a few months to even get to that point of just… Kept working on it, talking about it, and got that first person to pay me $8 a month for a subscription at the time. Boy, that was one of the most exciting $8 I’ve ever made in my life when that finally happened.  

Rob Walling:
I love that. Do you have a memory of seeing the email, or getting the ding?  

Grant McConnaughey:
Yes. I was in my car, and saw it at the grocery store. I was like, “Holy cow.’ Someone in the world thinks something I made has enough value that they’re like, “Here’s eight bucks for that. Thank you.”  

Rob Walling:
Something I should have asked at the top was to give us an idea of where the business is at today.  

Grant McConnaughey:
It’s grown a ton since then. These days we’re up to still just a pretty small group of three of us, a scrappy group. I’m the only founder, but have since found a software engineer who’s excellent. I’ve worked with him before, and a support person. We’re now in the mid six figures, ARR range, and growing pretty well.  

Rob Walling:
Did you think when that $8 came through, “You know what, in a couple of years, mid six figures, I’m calling my shot. I’m Babe Ruth in it,” at a point?  

Grant McConnaughey:
Never. It took me two years to even accept that this is, I need to go all in on this. Very risk averse, and really got it to the point where it didn’t feel as risky anymore because it was making a true salary amount of ARR. So I felt I could go all in. So I really took it the slow, steady, and risk averse way. That’s my style.  

Rob Walling:
The style of many. So folks know the context. You launched it in March, you got to 1K MRR by the following January, so it took nine or 10 months.  

Grant McConnaughey:
It did, yeah. It took several months to get the first customer in the first place, and just slowly, slowly every month getting four customers, then eight customers, and then 20. It just kept growing.  

Rob Walling:
You did something, I would almost call this a growth hack. I know people don’t like that term. But you did kind of a growth hacky does not scale thing right at the start. You want to tell us about that?  

Grant McConnaughey:
Yeah, so Reddit has a decent API that has a lot of great endpoints that you can get Reddit data. It’s really valuable, really good stuff. So in the early days, this is June, July, 2020, wrote some scripts to see who are the users who are submitting the most posts, because in theory, those are the folks who would most benefit from a scheduler like this. And tried to find who those common posters are across a bunch of different subreddits, and just sent cold DNs to see if they would be interested. As you can imagine, most cold DMs, most people didn’t say anything. Maybe 1% sent me a not so happy reply, but then every now and then a few people per day would be like, “That’s really cool. That’s awesome. I’ll check it out.” And it was a good fit for them. So the kind of thing that really doesn’t scale well, and haven’t done that in years, but in the early days it was a good way to just get anyone to care.  

Rob Walling:
You scrapped to 1K MRR in about nine or 10 months. Then you continued working full-time at Zapier until October, 2022 because you applied to TinySeed. You were doing 10K, or a little more than that when you applied?  

Grant McConnaughey:
Yeah, it was north of 10K MRR at the time I quit. Funny enough, I’d actually put my notice in at Zapier, this is October, 2022, before getting accepted in the TinySeed, and then a week later got the email from you all that I had been accepted. So I really wanted to do this either way, but then when I got that email, it was like, “All right, this is the right thing to do for sure.”  

Rob Walling:
That is cool. Folks who listen to the show know that I don’t make the podcast an advertisement for TinySeed. So I have a couple of questions for you about your experience, not to say, “Well look how great TinySeed is.” But I’m curious, there was a thought process there of like, “Should I do TinySeed?” Why do it, is my question?  

Grant McConnaughey:
I talk to a lot of… I try to have as many mentors around me as I can. I really value other people’s input, especially folks who’ve done what I’m hoping to do. So I talk to a lot of people about, is this the right decision or not? Ultimately I just thought getting in this community of other people who are doing the exact same thing, especially as a solo founder who doesn’t have another founder to bounce ideas off of. I just thought there’s going to be so much value in the mentorship, the comradery of other folks who are also going through the TinySeed process at the same time as me, and have companies that are around the same size as mine. So it just ultimately felt like the right thing to do.  

Rob Walling:
Over the last year, you’ve grown by several X, right?  

Grant McConnaughey:
Yeah, so since joining TinySeed in November of last year, it’s been about 13 months, but we’ve grown 3.4x annual recurring revenue in that time.  

Rob Walling:
That’s got to feel good. What’s been working? Someone listening to this is like, “Well, if I was at 10 or 12 KMRR, and I wanted to grow substantially,” why do you think you’re where you are today?  

Grant McConnaughey:
I think a big part of it’s hard to give an app a ton of, or a company a ton of focus as a side hustle. I really was giving Zapier my full 40 hours, and then working Saturday, Sunday mornings, evenings. But it’s just hard to really focus on big initiatives at a company when you’re doing something like that. So I think having the full time working on Postpone to really dive into like, what are the big things customers are asking for, not something I can just knock out on a Saturday morning. But a big multi-week initiative, a feature, or a new way to position the product that is going to have a really big impact. That kind of stuff has been night and day. You could see the line just trend differently as soon as I could start getting these really big, impactful, valuable features out much more quickly.  

Rob Walling:
Are you telling me that focus helped you grow faster?  

Grant McConnaughey:
Focus.  

Rob Walling:
Focus.  

Grant McConnaughey:
Just focusing on it, yeah, not splitting my attention.  

Rob Walling:
Well, why didn’t you launch four or five more apps to see what sticks? Because isn’t that, sorry, a little starter for the rest of a drinking game joke there. Yeah, you actually, I believe you published a graph on Twitter. It was with the MRR removed, but it was a graph of your MRR with no y-axis. There were two inflection points where you bootstrap or hockey stick. One, you pointed arrow, it said, “join TinySeed,” which I was like, “Oh, it warms my heart.” The second one was increased prices. So tell us about that. Was it little bit, was a lot bit of A&R and I busting your chops, TinySeed playbook raise prices, or did you already have it in the back of your head?  

Grant McConnaughey:
It was almost exclusively you all busting my chops. I think A&R and you both, we had a meetup at one point, I think you both said, “If we do nothing else but you get you all to raise your prices, by the end of this, we will have succeeded.”  

Rob Walling:
We will have succeeded, yeah. That’s pretty much the mantra.  

Grant McConnaughey:
I thought, “Well, I should probably do it right then.”  

Rob Walling:
So you did raise prices. Well, it was June of this year, so it was about six months ago, right?  

Grant McConnaughey:
Yes.  

Rob Walling:
That was when you locked, because you were Reddit only until then, I believe. And now you have Twitter, Instagram, and TikTok. So you launched the Twitter support, and you increased your prices. About how much to give people an idea?  

Grant McConnaughey:
So about 20%. So we had a $19 a month plan that went up to 25. We had a $39 a month plan that went up to 49, and so on. So about 20, 25% or so increase. And yeah, tried to coincide with the launch of that of Twitter support so it didn’t just feel like increasing prices. It’s also, “Hey, I’m getting twice the value as I was before. I can now connect more accounts, manage them all from one platform, and paying a little bit extra. I don’t mind doing that.”  

Rob Walling:
Did you grandfather existing customers, or raise the prices on existing customers as well?  

Grant McConnaughey:
So I didn’t end up raising prices for everyone, despite the advice I got from several folks was to go ahead and just rip that bandaid off. But ultimately I decided to go with an approach where I introduce brand new plans but only include Twitter support on those new plans. So folks are grandfathered in on their old plans if they want to keep that they can. But these newer plans are where we’re going to start adding new platforms like Twitter, Instagram and TikTok. So for access to those, you do have to upgrade. So it was a good way to entice folks to upgrade if they want to, but also not feel like they’re being forced to. What we found is a huge percentage of our customers use one of those other platforms, and gladly upgraded to the newer plans in order to bring on more accounts plus expanded it onto higher tiers in order to connect more accounts because we do limit some of our plan tiers by number of accounts connected. So it’s been great for both bringing in new customers, and expansion revenue as well.  

Rob Walling:
Got it. And your average revenue per account has gone up pretty substantially as well.  

Grant McConnaughey:
Yeah, that was not just increasing prices, that was also adding higher tiers, which is where we started first. Just don’t have your highest tier be $99 a month because then no one can pay you more than $99 a month. So adding on those higher tiers I think went a long way as well.  

Rob Walling:
Because you have a more for agency’s plan, basically that’s above your 99. So when they come in, and people can go to Postpone app/plans if they want to see what you’ve added in there. So you didn’t have the agency plan at this point?  

Grant McConnaughey:
Not really, no. We had plans that would support multiple accounts, but we called it Ultimate or something like that. We weren’t really speaking the language of agencies themselves because we were mostly marketing toward creators. But it was a really missed opportunity for a long time to bring in these agencies who are willing to pay more, and churn less often as well. So it’s been really big for postpones a ARR.  

Rob Walling:
I often say that raising prices is technically easy to do. It’s like, “I’m going to change the stripe call. I’m going to change the number on my pricing page.” You do some stuff. Technically it’s usually not terrible. The big block is usually emotional. It’s a mental thing of like, “I might break my business. I’m going to make people mad. Is it even the right thing?” There’s a lot of, it’s a big change. It could break the business. Did you experience that before raising prices?  

Grant McConnaughey:
I did. It was scary to do. I had to have friends and just people I know come in, and talk me up a little bit to, “Hey, it’s going to be okay. You can always roll it back if it goes horribly.” So I finally did do it, but it was something I was pretty hesitant about, and was really afraid that new signups are just going to fall off a cliff if we do this. Shockingly, I’ve shown you the ARR graph. I can also show you the subscriptions graph. And it also went up. We raised prices, and number of subscriptions went up as well, which seemed completely countered to me, but that’s what had happened over the next few months as well.  

Rob Walling:
That’s incredible. It’s a good story. In most cases, that’s what happens. I’m invested 171 companies across TinySeed, and my own personal portfolio. Almost all those have raised prices at one point. If they haven’t, and they’re listening to this, they should raise the prices right now. But no, but seriously, the usual result is that everything goes up into the right, and obviously the counterintuitive part is you can raise prices too far. If you doubled all your prices today, it might work or it might not. At a certain point if you’re just priced too high, the alternatives are cheaper, they’re easier, they’re whatever, if you’re easy to switch away from, and there are alternatives, you just can’t. There’s only so much elasticity. But even with that in mind, I can’t remember the last time a TinySeed company raised their prices, and then had to roll it back. 

With every batch of companies every six months, we fund 20, 25, 27 companies, more than half of them, probably significantly more than half, raise their prices during the batch year. So that’s a lot. I don’t know the exact number, but obviously it’s dozens and dozens. It may approach a hundred, but it’s a lot. I cannot remember. I’ve had people raise prices, and need to change, “Oh, we got the value metric wrong.” Or, “We need to tweak the plan, we need to do some stuff.” But to raise prices, and then truly roll back. I don’t know that I remember a time when that’s happened. So it’s interesting, it’s anecdata. But nonetheless, it is usually the right call specifically if you haven’t done it in a while, or never done it, I think in your case, right?  

Grant McConnaughey:
Yeah, well, I’ve done it a few times. Like I said, we launched with an $8 plan.  

Rob Walling:
That’s right.  

Grant McConnaughey:
I think our highest tier was $25 at launch.  

Rob Walling:
Got it.  

Grant McConnaughey:
But as at the time, I truly didn’t understand customers, and what they’d be willing to pay, what their price sensitivity was. But we hadn’t raised prices in over two years. I sent everyone an email, and really included this laundry list of like, this is all the amazing things we’ve added in the last two years, as well as this new Twitter support that we’re launching. I think that that really helped to show folks, the app has grown so much in that time, and there’s been so much extra value that you’ve been getting. It makes the price increases maybe just go down a little bit better. But frankly, I wish I would’ve done it six months earlier, or soon after joining TinySeed based on how well it went.  

Rob Walling:
That’s the thing, if you’re in a very slow moving space, you can evaluate prices every year or two. If you’re in a faster moving space, like marketing technology, MarTech, you’re in every six to 12 months to me, is an evaluation. Doesn’t mean you raise every time. But I used to have a notebook because I’m old school of all the major drip competitors. I would write down all the prices that were published, and about every six months, nine months, I would go and I’d redo that. 

I just had pages and pages in notebook. I would compare them and be like, “What are these other people doing?” That was a mental evaluation for me. I would also, and it wasn’t just, look, it’s not just competitors. What are your customers saying? What features have we added? Do we need to rework our value metric deal? Is it working, is it not? So there’s more to evaluation that’s looking at competitors. But that’s where fast moving space like yours, I do think that if you’re not pretty seriously considering changing your prices, raising them, or tweaking value metric about every year, think you’re going to fall behind a little bit.  

Grant McConnaughey:
Part of what makes it scary is, once you realize you’re raising your prices, and becoming maybe the most, your prices are now a little bit higher than some of your competition. There are other post schedulers out there certainly. But the Reddit space is pretty niche still. And of the ones that do exist, their prices are a little bit lower. So just coming to accept that we’re going to be the higher priced one, but that’s going to be because we offer so much extra value that you simply can’t get from competitors in a much better package, and just being okay with not being the least expensive one.  

Rob Walling:
We’re not cheap because we’re not cheap. There’s an ad, I think I mentioned it in the episode that went live last week about you don’t have to be the cheapest and own that actually. No, we’re not cheap because we’re the best. You can’t get anywhere near this from other tools. Speaking of Reddit, I remember a Reddit API debacle that happened, say in the last four or five months. There’s folks listening, if they didn’t pay attention, you want to catch them up on what happened, and I want to drive home. You are a scheduling app for Reddit, Twitter, Instagram, and TikTok, but you are solely Reddit for what, two years? And that is still the bulk of your business. 

So to hear that the Reddit API had this platform risk, that’s what we’re going to talk about here. But to hear that, that had some difficulties, I remember stressed you out a lot. You and I talked, we did some Zoom calls, we did some slacks, and it was a little bit tenuous. So why don’t you tell the full story because this is great. I think for people to hear, to understand platform risk sometimes doesn’t work out, and sometimes you can get around it.  

Grant McConnaughey:
It was definitely a scary time. It was in April, 2023, I think when Reddit-  

Rob Walling:
It’s nine months ago.  

Grant McConnaughey:
Yeah, they announced some new API pricing, but they weren’t specific about what the pricing would be. They just said that API pricing is coming, and will be required. It’ll be required to pay for the API essentially. So that just inherently, you get a little hesitant because you don’t know what that means, and is this an existential risk or not?  

Rob Walling:
I think hadn’t Twitter just done their API thing where they were like, suddenly we’re charging $12,000 a month or some insane number.  

Grant McConnaughey:
Yeah, it started at 42,000,  

Rob Walling:
Forty-two thousand a month, it’s bananas. So I remember you and I got on a call, and you’re like, “I’m concerned Reddit’s going to charge 42,000 a month because then we can’t.”  

Grant McConnaughey:
Well, exactly. That was a big part of it. If the pricing is fine, no big deal. Happy to pay it. If it’s $42,000 a month, then there’s the existential risk. You just got to close up shop. And to be clear to folks, the Twitter pricing has changed as well. They now have a hundred dollar tier, $5,000 tier, and $42,000 tier. So they have added multiple tiers since then. But Reddit did come forward with their API pricing about six weeks later in May. And fortunately for Postpone, it was something that just based on the nature of our business, the average revenue per user, and the number of API calls we make, totally doable, ended up working out just fine. 

For third party Reddit clients who have a huge amount of free users, who are using tons of API calls all day every day, it was an existential risk, unfortunately for many of them, and much lower average revenue per user for those as well because they’re very B2C mobile apps. But fortunately for Postpone, it was something that we could handle, and ended up not being a big issue. But for a while there it was like, “What do we do? This could be it right here,” because we had all the eggs in the Reddit basket at the time.  

Rob Walling:
It was touch and go. I remember you were pretty stressed because it was truly potentially existential that it would destroy the company, and there was no, you hadn’t launched. Now I’m remembering you said it was April, so you hadn’t launched Twitter, Instagram, or TikTok, right? Those came in June, I think.  

Grant McConnaughey:
Yeah. Honestly, that’s where the benefit of being a TinySeed really came up because we added Twitter, Instagram, and TikTok because of a conversation I had with you where you said, “I think it’s just time to expand.” It was a great way for Postpone to diversify a bit. I think it was definitely the right call.  

Rob Walling:
And also a way to get a little more MRR, little more average revenue per [inaudible 00:25:26]  

Grant McConnaughey:
More MRR, make it a little more sticky. Lots of benefits that came with diversifying.  

Rob Walling:
Well, I’m glad the platform risk didn’t wipe you off the face of the earth this time.  

Grant McConnaughey:
Me too. But it is. It’s scary. There are folks who built Twitter apps who, their app didn’t exist after the $42,000 a month pricing came out, and they just had to close up shop. So it’s something that I think about quite a bit. Platform risk is real. So I have to keep that in mind and really ask whether it’s something you can work around, or if it’s truly existential.  

Rob Walling:
I think I want to wrap up with this question of, you’re a successful bootstrap, mostly bootstrap entrepreneur. You’re in an enviable position that I think a lot of listeners of this podcast would love to be in. With that in mind, what do you wish that you were doing better right now as the founder, operator, and CEO of Postpone?  

Grant McConnaughey:
Great question. I started working on Postpone as a software engineer at Zapier. Really wonderful company that I enjoyed working with them, but I just wanted to build these other skill sets as well. But I’ve found that in building Postpone, building up this product, and a small company, I still spend a lot of my time building, working on product stuff. I still feel like an engineer at heart. You simply have to focus on marketing as well. If I could go back, I would tell myself to spend three times as much as I’m spending on marketing over the last couple of years, whether that’s working on SEO building landing pages, especially signing up for affiliate programs that your users can join, and things like that. Don’t get into a rut of just building, and building, and thinking, “If I build this feature, then they will come,” because they might not. So definitely sticking with marketing would be a big thing for me to focus on. Huge recommendation to the book. I think it is called, Traction?  

Rob Walling:
By Gabriel Weinberg.  

Grant McConnaughey:
Yeah. Finding customer acquisition channels, trying out new ways of that. A Huge shout-out to that book, which really kind of opened my eyes to how to start getting a little bit of leverage on these different marketing avenues, and really doubling down on the ones that work.  

Rob Walling:
Grant McConnaughey, it’s been great having you on the show. You are, G McConnaughey on Twitter. We will link that up in the show notes because your last name is not the easiest to spell.  

Grant McConnaughey:
It is not, no.  

Rob Walling:
We will also try to find your tweet with the graph of your MRR because I thought that was really cool. We’ll link that in the show notes as well. Thanks again for coming on the show, man.  

Grant McConnaughey:
Sounds good. Thank you so much, Rob. I appreciate it.  

Rob Walling:
Thanks again to Grant for coming on the show. It’s great to be back in the saddle doing some interviews. I’m done with a ton of travel this fall. So I’m trying to schedule a few guests to come on the show. I look forward to seeing you back again next week. This is Rob Walling, signing off from episode 693.

Rob Walling:
Right now I’m just giving examples of perhaps anti-patterns of getting in your own head and staying in your own head and thinking that just because you prefer it, that your customers do as well and that your market does as well. And look, if you’re selling to other developers, maybe that’s true, but the moment that you step outside of that and you start selling to anyone who is not writing code 40 hours a week, you need to seriously rethink your approach and to think, not of how you buy, but how do they buy. 

Welcome back to The Startups For the Rest of Us. Today is a Rob’s Solo Adventure where I’m going to talk about making sure that your product works. Talk about how little you’ve proven until someone gives you money, why not being the cheapest option can be good for your positioning. And maybe one or two more topics depending on how the time shakes out. Before we dive into that, tickets for MicroConf US in Atlanta next April 2024 are on sale. 

This event will sell out. If you’re thinking about coming to Atlanta, April 21st through the 23rd to see me co-host this event with Lianna Patch and to see speakers like myself, Rand Fishkin, and several others, head to microconf.com/us to grab your ticket before they sell out. We had an amazing event just a few months ago in Denver, and I expect the event in Atlanta to be no different. 

So microconf.com/us to grab your ticket today. So the first topic I want to cover today was actually sent to me by content producer, Ron. He helps make sure the podcast gets out on time and is really in charge of getting the YouTube videos all through our editing and production process and out every week, 52 YouTube videos a year, 52 episodes of Startups For the Rest of Us per year. In that role, producer Ron gets a lot of cold email outreach. 

In this case, I actually got the cold email and it was AI for podcasters. And so that sounds intriguing, could this be something we could use that could help us get the podcast out faster? So I forwarded that to producer Ron. He signed up with a credit card. He tried the app, didn’t work. I think it crashed or 404’d or something that obviously just didn’t produce a result. So he left. He came back later that day or the next day, tried it again, still didn’t work. 

So he says, “All right, my credit card’s on file.” So he goes to unsubscribe in the app, can’t do it. So he has to get on chat or email with the support person and he says, “I need to unsubscribe.” And the support person didn’t ask anything, didn’t ask why, didn’t ask if it worked, just said, “Okay.” And so think about the level of effort, the amount of time and money that was just wasted and the opportunity that was just wasted by not having their signup flow and their application working as it should be. 

It’s you have one job and the job is to make sure someone gets through your flow and then that they just get that first very simple use case. This is not a complicated app. It’s not as if you’re logging into marketing automation where there’s 50 different features and one of them broke. It is basically a one, maybe a two feature app. It’s kind of just a feature wrapped in a web page. And the challenge is we are actually a really easy customer to sell to. 

We pay money, we self-sign up. If it works and it’s great, we don’t need to talk to anybody. We self-onboard. We have budget. It’s crazy. So I think the big takeaway here for me is when was the last time you or someone on your team went through your own onboarding and actually tried what you think the first feature people should try is or that first step of the onboarding flow? 

This is one of those things that can easily get lost and forgotten because you deploy it once and you polish it up and then a year later your app, your positioning, your entire funnel, even maybe even your ideal customer profile has changed. But we just forget to revisit those first few steps, those first few moments that are so critical for new customers. 

So hopefully this can serve as a public service announcement for you to either assign it to someone on your team or to just step through your onboarding and try to travel your minimum path to awesome, that first spark where you think, “Man, this is a really cool piece of software.” And make sure that that is not only frictionless, but that it works. My second topic is from a cold pitch. 

Someone cold emailed me saying they had a B2B SaaS app. The idea was interesting. I’ve never invested in an app where the founders have cold emailed me. It’s always through, it has traditionally been through MicroConfs, and of course now it’s through TinySeed. But I believe someone emailed me and I was trying to size them up to figure out are they a fit for TinySeed, either the accelerator or our investment syndicate. And they had a good story and they had a solid founding team. 

I like the app idea. I think I went back and forth once or twice and I was like, “Great, what’s your revenue?” And this sentence, I’ve heard this in the past, I’ve heard it multiple times, which is why I’m bringing it up now. This sentence always kills me. Sentence was, “We are pre-revenue still as we have been focusing on early user acquisition with a free offering.” 

And that makes me cringe. Because unless you’re a pretty experienced entrepreneur or free really well, don’t do this. This is the early entrepreneur’s trap. Yeah, that’s what it is. I talk about several big mistakes, common mistakes that founders make in the SaaS playbook, and one of them is translating your app to other languages to or early or it’s white labeling or adding other verticals too early, underpricing your product, right? 

These common mistakes that folks make. Another one is thinking that free users offer any value. Now, if you’re a second, third, fourth time entrepreneur, if you really know free, if you have listened to Ruben Gamez, speak about it. If you’ve listened to me take Ruben Gamez’s four criteria for when free plans work and you’ve heard me say them on this podcast, then maybe you try it out. 

But what I find is it’s an excuse for doing something hard, which is charging people. It’s an excuse for at a minimum telling people, “I’m going to charge you when you get value from this product.” The first several months of Drip, as I was hand onboarding new customers, first 10 or 20, I would say, “Look, I’m not even going to take a credit card from you. Get in. Let me help you get onboarded. Let me know how much help you need. When you start seeing value from it, let’s get a credit card on file. It’s going to be 49 bucks a month.” 

And some people got onboarded in a week and some people got onboarded in six weeks. And in fact, it helped me understand how long I thought that our trial should be once we were automating this. But had I just told them, “Oh yeah, it’s just free. I’m just getting free users.” Unless there is a network effect where getting free users actually increases the value of your business, in almost every case, almost every case, I see of an early stage or a new entrepreneur trying this, it’s a mistake. 

Because it’s noisy as it is when you have 10 or a hundred or 500 users of an application. There’s so much noise. You don’t know who to listen to, you don’t know what to build. You’re getting conflicting, distracting reports of, “Build this feature. Pivot this way. Have you thought of just replicating all of Mailchimp’s functionality inside your app and adding a mobile Android and iOS apps?” It’s too much already. 

And if you’re doing it free, what you’re doing is not segmenting your customers to find out who really needs this. Who is this truly a pain point for? Because if it’s painful, someone should be willing to pay for that. And if they’re not, it’s probably time to move on. Right? On this podcast I talk about B2B SaaS that solves a problem, a pain point that people are willing to pay for, people in businesses are willing to pay for. 

And so if you are not able to charge someone something and you’re getting free beta users, “Free beta users,” I’m doing air quotes for those of you listening to the audio, you have proven so very little until someone gives you money. Specifically with B2B SaaS, you’ve proven almost nothing until someone gives you their credit card. 

I want to talk about my third topic of the day, and it’s around positioning about not being the cheapest option. So every once in a while on Instagram, I come across an ad that I really like, and I think several companies have copied this ad. I don’t know which one was the original, but I’ve seen it for pens, I’ve seen it for shoes. And the one I have in front of me is for socks. But I like the tone of it, the confidence of it. The headline is, this ad is for socks. 

And the headline is, “They’re not cheap because they’re not cheap. It’s not cheap to make a sock that lasts four times longer than cotton. It’s not cheap to create a merino wool that won’t lose its shape. It’s not cheap to reduce waste by 80%. It’s not cheap, but it makes a big difference. Introducing Aerowool, four times the life of Cotton. Twice the performance, one fourth of the waste.” That was an ad read for Aerowool, but you get the idea, the confidence. 

They’re not making excuses, they’re not trying to be Walmart. And this is how I’ve often felt about the businesses I built, specifically TinySeed. I was at a dinner with a friend, kind of in the broader MicroConf ecosystem within the last six months, and they are not a founder and they don’t raise money and they don’t know much about fundraising, but they said, “Yeah, someone told me that TinySeed money is expensive.” And I said, “Yeah, that’s true.” 

We are not the cheapest money. By design, we are not the cheapest money. If you want cheap money, go to a doctor down the street, a dentist, maybe a local angel group, go try to raise on Sand Hill Road, go to one of kind of the copycat like the tier B, tier C funds, whether they’re indie funds or whether they are major venture funds. Those have cheap money because they have no differentiator. Right? They don’t have world-class mentors like TinySeed. 

They don’t have the Hiten Shah, the Claire Suellentrop, the April Dunford, Asia Orangio, Chris Savage, Rand Fishkin, Jordan Gal, Steli Efti, DHH, Jason Fried. They don’t have that mentor list, right? It is a who’s who of B2B SaaS. You can go to tinyseed.com/people if you want to see the full mentor list. They don’t have myself and Einar Vollset giving you advice. They don’t have a year-long program. They don’t have the best B2B SaaS alumni network with 151 companies, 250, 275 founders. 

And look, this piece here, I want to be super clear, not an ad for TinySeed, but what I’m telling you is the reason that we are able to not be the cheapest money is because of the value we provide. We’re not a commodity, right? When you’re a commodity, then it’s a race to the bottom and it’s who can get it here the fastest and the cheapest at a quality that’s good enough that it doesn’t break. And in thinking about your own positioning, I’m not saying everyone needs to be the premium play. 

In fact, if you can find a hated competitor that has artificially kept prices up because of their brand or because of the space or because of their sales model, you can slip in underneath them and actually be less expensive and have an amazing product, there’s a real opportunity there. But for me, by the time I’m building a brand, by the time I’m at a million ARR, 2 million ARR, and people list me as one of the top two or three options in a space. I say, list me, they list my product, my company, as one of the top two or three options in a space. 

That’s when I’m starting to think about pricing power. Because now people are coming to me, to my product by name. They’re not just looking for a generic replacement and looking for the cheapest option. So in this conversation, I actually posted this in the team TinySeed Slack. Because I said, “I like the thinking about this, and this is how I think of TinySeed. We’re not the cheapest money and there’s all these reasons.” 

And Alex, who’s our program director in Europe for our EMEA program, he rewrote the ad just in our Slack and posted it. And I want to read that here because I like it. He said, “Our funding isn’t cheap because we’re not cheap. It’s not cheap to build a program that’s four times longer than the average accelerator. It’s not cheap to create a world-class group of industry-leading mentors. It’s not cheap to connect a network of hundreds of SaaS founders through events worldwide. 

It’s not cheap, but when it comes to your business’s growth, it makes a big difference.” Thanks, Alex. I use that without permission. I’m sure he won’t mind. But I liked that thinking of if you are going to be the premium brand, don’t apologize for it. In fact, do the opposite. Point out that you are more expensive and why. Get ahead of the objections by saying, “We are not the cheapest option.” 

And in fact, go to Instagram and type in, “We’re not cheap.” And maybe see if one of these ads comes up. Because every time I see it, I get a little smile on my face and I think, “This is not lazy marketing. That’s pretty cool, creative marketing.” Finding the perfect software engineer for your team can feel like looking for a needle in a haystack, and the process can quickly become overwhelming. But what if you had a partner who could provide you with over 1000 on-demand vetted senior results-oriented developers who are passionate about helping you succeed and all that at competitive rates? 

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My next topic is on mirror research versus market research. This is a quote that I heard from the Comic Lab podcast. I’ve referenced them several times on the show, actually pulled, it’s one of those, it’s two comic artists. They’re comic creators, they’re entrepreneurs, and they do Kickstarters and Patreon and they have books and they have stuff online. And it’s neat to see the overlap between startup founders and comic, these two comic artists as well as the things that are different. 

And that’s why I listen to the show. I love going into other disciplines that are tangentially related to see what I can learn. And so in a recent show, one of the hosts said, “Are you doing mirror research or market research?” Mirror research is when I look in the mirror and I say, “Well, this is what I would prefer. Therefore, that’s what everyone would prefer.” Market research is when you listen to prospects, customers and your broader market. Developers are famous for this. For saying, “Well, I would never pay for that because I could build it in a weekend. 

I would never pay for that because I could cobble it together in no code, low code or some other form. I don’t like to talk to salespeople, so I’m not going to do sales.” No one likes talking to salespeople. “I’m not going to do demos because they don’t work. They’re annoying. I’m not going to have high prices or have prices that increase with the value someone gets because I don’t like that kind of pricing. I don’t like that with MailChimp that as I get more subscribers, I pay more money. 

So I’m going to start a competitor where it’s just flat pricing for infinity subscribers.” And that last one is actually kind of what BeHive is doing right now and they’re having success with it. So I could talk about that as a case study on another episode. Right now, I’m just giving examples of perhaps anti-patterns of getting in your own head and staying in your own head and thinking that just because you prefer it, that your customers do as well and that your market does as well. 

And look, if you’re selling to other developers, maybe that’s true, but the moment that you step outside of that and you start selling to anyone who is not writing code 40 hours a week, you need to seriously rethink your approach and to think, not of how you buy, but how do they buy. To think not how you approach a purchase process, onboarding and retention, but how do your customers and your market think about this. 

And the way to get educated on that is to have conversations with them, to observe them as they use your application and to ask a lot of questions and figure out who’s succeeding and who is not, and what can we do differently to help more of them succeed rather than stand in front of a mirror and ask, “How would I like to buy and assume that my insurance agents,” if that’s who I’m serving, “Are going to in any way think anything like I do,” because they’re probably not. 

So that was mirror research versus market research. My last topic of the day is about ventriloquism and how it doesn’t work in comics, but realistically, it pulls from the Pablo Picasso quote that says, “Learn the rules like a pro so you can break them like an artist.” And I have a couple examples of this actually. I think this really drives home with SaaS in the sense that if you want to do something creative, like have a free plan in a B2C two-sided marketplace, first learn the rules of the common pitfalls that people run into. 

Right? So if you’re thinking about doing a free plan, maybe launch an app without a free plan and learn how that works first or maybe have a lot of conversations with folks who have actually made free plans work. Don’t just gut your way into it. Learn the rules of what makes them work and not before doing it. 

I think of this with all the rules of thumb I have around should you ask for credit card upfront or not? Should you do demo only or should you offer demo plus start a trial as an option? What are the rules of thumb around B2B SaaS pricing? There’s a lot of them around enterprise pricing. There’s all these rules, and they’re not rules, they’re rules of thumb, they’re guidelines. 

And now that I have them kind of locked in my head and all lodged as this whole framework, again, that I kind of bled onto the page, so to speak, for the SaaS playbook. That’s my most recent book, saasplaybook.com, if you haven’t read it. But now that I have them in my head, I kind of have a gut feel of when they should be broken because I know the rules, rules of thumb that is, because there are no rules. 

Right? There’s no hundred percents, but there’s a lot of eighties and 90 percents. 80, 90 percent of the time you should do this unless you have a really good reason not to. So in SaaS, it’s pretty obvious to me that this idea of coming in not knowing any of the rules, you’re likely going to make some really basic missteps. The common mistakes, I referenced some of them earlier, but there are dozens of them. Things SaaS founders should never do. I talked about this, what? Five, 10 episodes ago. 

Those are the rules of thumb that you should learn and then learn when to break them. And the example I referenced earlier is about ventriloquism not working in comics. I would never even think about ventriloquism in comics. But referencing Comic lab, again, they were talking about this rule between the two of them of how trying to have ventriloquism in a written art form, a visual written art form, like a comic. Imagine Garfield or Calvin and Hobbes and them trying to do ventriloquism. 

You could pull it off, but you really need to know how to do it. It doesn’t really work in comics unless you are an expert, unless you’ve learned the rules so you can learn how to break them. And I loved that analogy of it because again, this is something I just would never think about because I’m not a visual artist, can’t draw to save my life, but I love that thought of, it’s just kind of a rule of thumb. 

And they talk to a lot of beginners, right? That write into their show and they’re like, “Yeah, it just doesn’t work in comics.” Basically, don’t try it. And then the other example that I thought of as I was talking to someone about Rob Walling Drinking Game, the Beatles, and they were asking, why were the Beatles early songs so kind of generic and poppy? You go back to 62, 63, 64 and you have She Loves You and Please Please Me and I Want to Hold Your Hand. 

I still enjoy these songs, but they aren’t very deep compared to Sgt. Pepper’s and A Day in The Life and Strawberry Fields Forever, even Yesterday, Let It Be, Hey Jude, these amazing songs that are timeless and some of the certainly, inarguably some of the best songs of all time. But you compare it to their early work and they do covers and they write just a lot of kind of catchy poppy four chord songs. 

And I was trying to explain why that was. And I was like, “Hey, it was a sign of the times.” That’s how everyone else sounded. And then the Beatles, once they were number one, they just started innovating. And so they drove really the shape and the direction of music in the mid to late 60s. But realistically, I think a big piece of this is that Picasso quote, “They were learning the rules so they could learn how to break them.” 

The early songs sounds so old because they had to conform to the norms of the day to get on the radio. Right? They had great songwriting at the time, but it was very much this template of this three minute song with a verse, a chorus, a verse, of chorus, a middle eight with a solo and then a verse, a chorus and an ending. And then they got popular. And once they got popular and their name was recognized and their name was a brand, then they could start getting creative. 

If they’d been creative before getting on the radio and being really popular and selling a lot of albums, they probably would’ve never gotten popular. So then they could start setting the trends, right? No other songwriters, popular songwriters of the day were doing introspection about themselves, like the song In My Life. And Yesterday. They were doing deep topics, psychedelic topics like on Revolver or even Sgt. Pepper’s and Magical Mystery Tour. 

And after that, pretty much whatever they did was considered ahead of its time and cutting-edge. And in fact, that stuff that they recorded on a lot of four tracks and a few eight tracks, which is mind-blowing, they recorded it 60 years ago, still holds up today. But the Beatles had to learn the rules first, and they had to conform to the standards of that day just to get on the radio before they could break so many of the norms of music and songwriting of the day. 

Speaking of the day, I’m about to call it a day. I really appreciate you joining me for this episode and every episode of Startups For the Rest of Us. If you haven’t left a five-star review in your podcatcher of choice, that would help me a lot. And if you haven’t read the SaaS Playbook, you should head to saasplaybook.com or Amazon.com and pick it up. It’s only $10 on Kindle. I also sell it for $10 on PDF on my website. And if you have read it and you like it, it’d be amazing if you could leave me a review on Amazon. Thanks again for listening. This is Rob Walling signing off from episode 692.

Rob Walling:
If I’m competing against big, entrenched incumbents, I usually don’t care because I know I can outmaneuver them, but there are some exceptions to that. If there’s a network effect, like a two-sided marketplace or where everyone being there means everyone stays there. Think about eBay and Craigslist. These sites that so many people have tried to copy, including Amazon, tried to copy eBay, they had their own auctions. So, I mean, there’s been all these things that have tried to unseat eBay and Craigslist and they couldn’t because even though the sites didn’t change, it didn’t improve. They have tremendous network effects. And so, if the legacy trade organizations and associations you’re talking about have network effects as a bootstrapper, I personally would be very wary of trying to unseat those. 

Welcome back to Startups for the Rest of Us. I’m Rob Walling. And if you want to see one of the worst hair days I’ve had in years, go to twitter.com/startupspod and check out the clip from today’s episode. In today’s episode, I am going to be answering a handful of listener questions ranging from having a free version with an honor system to pay for it, how to gain traction against entrenched competition, doing sales as an introverted founder, and how to proceed if you don’t have time for the stair step method of entrepreneurship. Before we dive into today’s questions, if you haven’t checked out my YouTube channel, it’s at microconf.com/youtube. I’m putting out 52 YouTube videos a year with topics ranging from new SaaS ideas that you should build. Looking at acquisition funnels, high touch, low touch, talking about sales, talking about the SaaS sheet codes, pulling some things out of my book and expanding on them. It’s free and it’s easy to subscribe. microconf.com/youtube if you’re interested. And with that, let’s dive in to our first listener question, which is a voicemail because voicemails go to the top of the stack.  

Speaker 2:
Hi Rob, and thanks for the show and books. I recently launched my first product, a vulnerability scanner, available at opalopc.com. It is a desktop application. It is free for non-commercial use and for commercial use only for small organizations. The rest need to buy license to use it. I currently trust users to buy licenses if they are not eligible for free use. The program does not do any license checking itself. My reasoning behind this is that those interested can freely test the product, and the target market consists of very large organizations, and I doubt they will take the risk of breaching the end user license agreement. What do you think of this? Should I remove the free plan? How would you continue? Keep up the good work. Thanks.  

Rob Walling:
So, I’ll be honest, I struggle with this ’cause it feels like just one step above a tip jar of saying, “Hey, if you like us, support us.” I know that you will have a license such that big companies won’t want to break that license, but I’ll be honest, there are a bunch of people, individual contributors at big companies that will download it and just never say anything. You’re going to lose out on revenue, and I’ve never loved the model where I get a small bit of money from a very small percentage of my audience. I feel like if people get value out of my software, I want them to pay for it. 

Now, the exception of course is freemium having a free plan, and in that case, we look at our four, I don’t know, rules or rules of thumb around freemium, which of course were swiped as most of my good ideas are from Ruben Gomez of SignWell. And one of them is there a tiny bit of virality such that another user using it can potentially refer a separate user. Is it low support? Is it low onboarding? And is there almost no cost to you for them to use the software? 

And my guess is the last three are accurate, probably no virality for you. So, I guess the question is does it need to truly be free forever? Or could it be a 14 day, a 30 day, a 60-day free trial that then stops working at a certain point? That’s probably a default way I think about it or having your version so limited to where if it’s a vulnerability scanner, maybe there’s 500 types of vulnerabilities and it only scans for 50 or 100. And so, to actually get value out of it ’cause if I’m an individual user, a consumer, and I want the full value, shouldn’t I upgrade? And enter a license key such that it unlocks those. I don’t know. 

It feels to me like having a true free consumer version. I know that’s how WinZip made their money back in the days. “Oh man, that’s a throwback. Remember WinZip?” And there was that old Winamp player thing from Microsoft, I believe. I mean, but it is Microsoft. They have infinity money and can do whatever free they want. If I was bootstrapping this and actually trying to make money on it, freemium pushes out your revenue, right? It pushes out that revenue line, and if you have a bunch of funding, that’s okay. And you can play the long game like Dropbox did. And the other freemium players that we could mention off the top of our head, Figma, that was one, right? But if you’re bootstrapping, you’re trying to get to the point where you’re quitting your job. While I may have a free version, I personally would kind of want there to be more impetus than just honor system for someone to pay me money because my gut is even of the people who should pay you money, it’s going to be one in 10, one in 50, just some tiny, tiny number. 

And unless I get a cajillion installs of this thing, you need hundreds of thousands of installs of this in order to make any type of real money. And that’s tough ’cause you’re getting tens of thousands or hundreds of thousands of anything is hard if you’ve built it. So that’s my take. I mean, I’m more of the SaaS mindset rather than the old school. You’re almost talking Shareware is what you’re talking, and that model is not one that I personally would return to. So, thanks for your question. I hope that was helpful. Our next question is from Zach.  

Zach:
Hi Rob. My name is Zach and I’m a new listener to the Startups for the Rest of Us podcast. I’ve already listened to a few episodes and bought The SaaS Playbook and read it in two or three days, and it was a fantastic read and would recommend it for anyone looking to start a software company. My question is in regards to competition and maybe some use cases that I just haven’t heard before, I’ve tried to search online, but my niche is in the local government space and the competition would be dominated by legacy trade organizations or associations. Curious if there’s been a product or a company that has gone up against these behemoth legacy companies who, in my opinion, aren’t innovating and aren’t providing a valuable product, but it’s well known throughout the industry. So, curious if you’ve had that before or if you have any suggestions, I would love to hear it. Thanks so much.  

Rob Walling:
Okay. So, this depends on a couple of things. Realistically, I don’t quite understand what your businesses or exactly how you’re competing, but when I think about it, if I’m competing against incumbents, big, entrenched incumbents, I usually don’t care because I know I can outmaneuver them, but there are some exceptions to that. If there’s a network effect, like a two-sided marketplace or where everyone being there means everyone stays there. Think about eBay and Craigslist, these sites that so many people have tried to copy, including Amazon, tried to copy eBay, they had their own auctions. Did Amazon try to copy Craigslist too? I mean, there’s been all these things that have tried to unseat eBay and Craigslist and they couldn’t because even though the sites didn’t change, it didn’t improve. They have tremendous network effects. And so, if the legacy trade organizations and associations you’re talking about have network effects as a bootstrapper, I personally would be very wary of trying to unseat those. 

The second thing is switching costs and switching frequency maybe ’cause if folks, let’s say big construction firms and often governments will sign two, three, four-year contracts for their software, and if you’re trying to get people to switch, they literally cannot without eating a bunch of money for years. So, a, if there’s a lock-in there in terms of duration of contract, but beyond that, switching costs are brutal, right? Imagine if you are like Planify, which is a TinySeed company that builds software for construction firms to run their business on their entire business system. The switching costs to or from them is huge. You have to train all of your employees, everybody out in the field, everyone in the office, and you have to get everybody up to speed and on one day just flip it over and you just hope it works. 

And these are not… It’s not tech-savvy people, right? You’re not dealing with the people who work at TinySeed, right? Or the people who work at MicroConf where we all know how to use Trello. And so, moving to Notion wasn’t that big of a deal and building something in Airtable, we just kind of figured it out. You’re dealing with folks who I’ll say like my dad who worked 42 years in construction, he kind of knows how to use a computer. I mean, that’s about it, right? He’ll call me and say, “I can’t find where Firefox is.” ‘Cause the shortcut from the homepage got deleted and he doesn’t know where to find it, right? So that’s can be the level you’re dealing with. And so, switch and costs are a big deal because the retraining and getting people up to speed is tough. So, I’m not saying don’t do it if they’re a big switching costs, but if they’re big switching costs, like I would want to enter a space where new people are coming in all the time, right? 

Let’s say I build trip email service provider competed with Mailchimp. Switching costs are not that high, but in mentally people think they are, but there are new people coming in all the time just getting started and new people with kind of email lists that want to move it to an official ESP or whatever. So, while there were switching costs, there was also a lot of opportunity each month for new people who were looking for a solution. If you don’t have that and you have high switching costs and you’re literally trying to pull them from entrenched competitors, it’s going to be tough. I’m not saying don’t do it, but those are the two headwinds I’d think about. The third one is brand, right? Do they have a strong brand and does everyone love them? Then there’s no reason to switch unless people are complaining or there’s an actual problem like, “Oh, they’re so expensive. They don’t actually do anything for the money. Oh yeah, we all hate them, but we’re just with them because they’re the only option.” 

Well, now I start thinking, “Okay. How hard is it to switch?” And if one person at a time or one company at a time switches to my software, do they get the same value or do I need a hundred or a thousand to switch out once because there’s a network effect, right? Again, coming back to if it was a network effect thing, I probably wouldn’t do it or I would seriously consider not doing it. Now, if you weren’t talking about trade organizations and associations and city governments, local governments, I guess you said it’s a whole different story, right? Because if we’re going into MarTech marketing technology where the switching costs are low and there are no network effects, and there are some big brands in the space, but people don’t like, I mean, there is huge opportunity in my opinion, but that’s not the question you asked, so I answered it with the information given. 

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Next question is from Bavesh, and I’m answering this one even though it’s a written question because it is almost 11 months old, and that sometimes happens with these. So Bavesh asks, “What makes a SaaS product a low-touch strategy? If all the competitors are undertaking a high-touch sales strategy, can a low-touch sales strategy be possible?” So, the answer to the latter question is yes, it can. The answer to the first question of what makes a SaaS product a low-touch strategy, there’s a couple of things, right? So, if you aren’t charging very much, it kind of has to be low touch, but you really have to do the touch strategy to support the way that your customers buy. If they all want demos and they all want high touch sales and onboarding, then that’s what you do to get the most customers. That’s just what you do. You adapt to what the customers want. 

Here’s the kicker. If they all want high touch, but they’re super cash strapped, let’s say they’re a school or a library or a nonprofit and they need the high touch, but they’re only willing to pay $30 a month, that’s a tough business. I don’t say bad business, but I would never start that business because you’re going to need a lot of person hours that aren’t justified based on the average revenue per account per month or the lifetime value or the annual contract value. Whatever you want to say, you’re just not making enough money to justify it. So, usually I look at how do the customers want to buy, and in some spaces like construction firms buying their business system, I was just talking about with Planify, they’re not going to self-serve, always going to go through a really long sales process. 

I think most lawyers like if you’re serving legal, they want to do usually there’s at least a demo or a conversation. If you’re selling to developers or marketing technology or to entrepreneurs, there’s a split. Usually with developers, there’s more low touch, no touch. With entrepreneurs there’s a subset who are not as technical, but I think of the startup founders, I shouldn’t say entrepreneurs broadly, but more kind of technical, semi-technical startup founders. The more technical they are, oftentimes they want that lower touch, but that’s a generalization. And so, once you enter a space, it’s like getting to know your customer, right? Getting to know your prospects, how they want to buy, and then realizing, can I charge enough to make it worth that level of effort? And to go back to your second question, which is if all the competitors have a high touch strategy, can a low touch strategy be possible? 

The answer is yes. If your customers are willing to buy on the low touch, and in fact, if you can then charge a lot less and have a great product and make it simpler because there’s a certain subset that don’t want high touch. I’ll give you an example, Infusionsoft, which is now known as Keap, I think it’s spelled K-E-A-P. They did high touch only and their marketing automation, by the way. They did high touch only and they were like three or $400 a month and up, so they were priced high, and they did this sales strategy. When I launched Drip, we had a decent subset of their functionality once we got automations and we had, you could say 80% of their marketing automation functionality. Now they have other stuff built in a shopping cart. We weren’t going to build affiliate management, blah, blah, blah. But just in terms of email marketing and marketing automation, we had enough of their functionality that a good chunk of their users could use us. 

And I went with a low touch strategy, frankly, a lower no touch, and I think we did have a book, a demo, and it was only if you were over $100 a month or whatever, we would do a demo, but otherwise you could self-serve, and our pricing was way cheaper because the sales model supported it. And so, we got a ton of Infusionsoft refugees that didn’t like the sales strategy, they didn’t want to buy that way, but they were being forced into it. And so, there was opportunity. The hard part is figuring out how do people want to buy if I’m not in the space? How do you figure that out? And that really is the question. It’s by talking to people, by being in forums, by being in the Facebook groups, by being in the Slack groups, hearing people complain, “Oh my gosh.” At the time Infusionsoft requires a one-year annual commit and a $2,000 onboarding fee, and their support is crap. 

They don’t let you see the product before you buy, and it’s a heavy sales process, and dot, dot, dot, dot, dot. So, I looked at that and said, “Our product is a lot easier to use, therefore, we don’t need all the onboarding and all this other stuff. And I know that we can make money charging starting at 50 a month and that there will be expansion revenue.” Which there was. And that frankly, we could have net negative churn if there’s enough expansion revenue which there was. And therefore, I knew that we could undercut them on price and change the sales model and really take a lot of their disgruntled customers away, which is what we did. So, thanks for that question Bavesh. Hope it was helpful. My next question is about doing sales as an introverted founder.  

Jordan:
Hey, Rob. I’m Jordan from the Netherlands. I’ve been listening to the show for about six months, and I absolutely love the show. So, thanks a lot. I’m a developer myself and have a question about introverted versus extroverted founders. So, on the show, you mentioned founders doing the sales up to a certain point of the business, and to me, that makes total sense. But as a more introverted person, I’ve always found sales to be difficult, perhaps more difficult than for more extroverted people, or yeah, at least that’s my assumption. So, I’m kind of curious where you see yourself on the extroverted versus introverted scale and what advice you have for founders that are more introverted when it comes to sales. Thanks a lot, Rob. Bye-bye.  

Rob Walling:
I like this question. So, to answer, I think it was your last one first. Where do I fit on the scale? So, I’m introverted. And there’s a reason that I talk to a microphone and a video camera instead of hanging out with a bunch of people. While I do this, I enjoy thinking and talking one-on-one or alone, frankly, as you all have heard me do for however many hundreds of solo adventures that I’ve recorded. I’m an introvert. And so, I definitely get drained when I go to big events, even though I run them, I get drained, and I get drained when I have to do sales calls ’cause it’s just outside of my wheelhouse. It’s something I can do. It’s not something that gives me life. 

So, here are my thoughts for you. I would read a couple of books that are focused on this topic. That’s exactly what I would go for because there are a lot of introverts, and I don’t know what the numbers are, but is it 50% of the world? I mean, it’s certainly some percentage that experience this kind of stuff. And so, there is information out there on it. So, one audiobook that I actually have in our audible library that I believe Sherry bought, I’ve not listened to, but it’s called Quiet: The Power of Introverts in a World That Can’t Stop Talking. And I think as a general book, just to learn more about how you can make introversion a superpower, I think that would be interesting. 

And the other book that I have not read, but I have had recommended to me, and it’s by Matthew Pollard, it’s called The Introvert’s Edge: How the Quiet and Shy Can Outsell Anyone. And that’s $11 on paperback on Amazon, and it looks like there’s an audio version or whatever. I mean, frankly, go to Amazon and type in sales as an introvert or go to Google and type in sales as an introvert book and just pick one with high reviews. And I think the one that I’ve heard recommended the most is The Introvert’s Edge, but someone is going to have a book’s worth of info about this and a thought process and a framework, and a here’s how you take sales and turn it on its head. If you’re introverted, that’s actually an advantage. 

So, here’s one thing I do ’cause I’m introverted and so I’m a little anxious about sales. So, I would get on a sales call when I was doing it for Drip, and I would say, “Hey, I’m Rob. I’m the founder. I’m really not a salesperson, but I know that you wanted a demo and I’m here to show you what we can do and try to figure out if we’re a fit for your use case, if we can help you and maybe save you some money ’cause I know you’re on Infusionsoft. Talk to me about your setup today.” Right? And I would kind of get them walking into it, and then I would be evaluating my head, “Are they actually a fit? I only want to sign them up if they’re a fit.” I didn’t want bad customers that are going to churn or are going to be a bad use of our time. 

And so, I would just be pretty honest with them and be a human upfront about this is who I am and this is the goal, the call rather than trying to talk them into it or trying to act like someone that I wasn’t, right? I didn’t try to channel some fake extrovert in order to do sales, but that’s just my experience. I hope you can find more help in one of the books that I called out. 

And my last question of the day is from Jake. Jake asks, “Thank you for the amazing content and insights you share on the podcast and the blog. My question, what if your idea is time sensitive and you don’t believe you have the time to do the stair-step approach to learn? I’m working on a site to test the idea and see if it has traction.” Thanks, Jake. I would probably just go validated then. You know what I mean? The stair set method is I don’t have any ideas, and I’m going to go try to do it in a repeatable, predictable fashion that I have a decent confidence that I’m going to build it up over time, and I’m going to have some moderate successes over time that build and build and build. If you have an idea that you really want to build, you’re just very passionate about, then go validate that, right? You can do the 5:00 PM idea validation framework to kind of do a first pass at it, and then do some type of validation. 

I’ve talked about this. There’s the high-touch validation where you’re actually having conversations whether via email or Zoom or Looms. And then there’s the low touch validation where you build a landing page and you can send traffic to it, either just by talking about it to your audience or running ads or SEO or whatever. There’s a bunch of different ways to do that. So, there’s kind of two, there’s more validation modes than that, but those are the two that I think about. I would certainly not go build this because I didn’t have time to stair-step, but to skip to validation on something that you think there’s a real need for and you believe that you’re excited to build it. There’s no rules in this, right? It’s just recommendations, it’s frameworks, it’s best practices to try to help get you to success faster and more often and more predictably. But none of this is set in stone. It’s all just the insane ramblings of some guy who has been starting companies for 20 years, has a few million-dollar companies under his belt, and has been talking on a microphone for 13 years. 

Thanks so much for joining me today and for sending in your questions. If you have a question for the pod, go to startupsfortherestofus.com. Click ask a question at the top of the top nav and audio and video questions will go to the top of the stack. This is Rob Walling signing off from episode 691.