Episodes

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? 

Meet Lemon.io, they only offer hand-picked developers with three or more years of experience and strong proven portfolios. With Lemon.io, you can have an engineer start working on your project within a week instead of months. Plus, you won’t waste your time on candidates who aren’t qualified. Lemon.io gives you easy access to global talent without scouring countless job boards. And it’s more affordable than hiring local talent. 

And if anything goes wrong, Lemon.io offers swift replacements. So it’s kind of like hiring with a warranty. If you need to grow your engineering team or delegate some work, give Lemon.io a try. Learn more by visiting Lemon.io/startups and find your perfect developer or tech team in 48 hours or less. As a bonus for our podcast listeners, get a 15% discount on your first four weeks of working with a developer. Stop burning money, hire devs smarter. Visit Lemon.io/startups. 

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. 

So, thanks for the question, Zach. Hope that was helpful. 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 1,000 on demand vetted senior results-oriented developers who are passionate about helping you succeed? And all that at competitive rates. Meet lemon.io. They only offer handpicked developers with three or more years of experience and strong proven portfolios. With lemon.io, you can have an engineer start working on your project within a week instead of months. Plus, you won’t waste your time on candidates who aren’t qualified. 

Lemon.io gives you easy access to global talent without scouring countless job boards, and it’s more affordable than hiring local talent. And if anything goes wrong, lemon.io offers swift replacements, so it’s kind of like hiring with a warranty. If you need to grow your engineering team or delegate some work, give lemon.io a try. Learn more by visiting lemon.io/startups and find your perfect developer or tech team in 48 hours or less. As a bonus for our podcast listeners, get a 15% discount on your first four weeks of working with a developer. Stop burning money, hire dev smarter, visit lemon.io/startups. 

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.

Rob Walling:
Going from an idea sketched on the back of a napkin, to a robust, stable product requires a wide range of skills. You can spend ages looking for a one in a million developer who can do it all, or you can quickly ramp up an entire product team to help you build and launch a product with our sponsor, DevSquad. 

DevSquad provides an entire development team, packed with top talent from Latin America. Your elite squad will include from two to six full stack developers, a technical product manager, plus experts in product strategy, UI/UX design, DevOps, and QA, all working together to make your SaaS product a success. You can ramp up an entire product team fast, in your time zone, and at rates 75% cheaper than a comparable US-based team. And with DevSquad, you pay month to month with no long-term contracts. Take the hassle out of assembling and managing a sprawling team of freelancers and work with a group that’s ready to hit the ground running. Visit devsquad.com/startups and get 10% off your engagement. That’s devsquad.com/startups. 

Welcome to Startups for the Rest of Us. I’m your host, Rob Walling. In this episode, I’m going to answer listener questions. I have several voicemails and video calls that, as always, go to the top of the stack, and digging into topics like, if someone signs up for my SaaS and I now have their email address, can I make that part of my marketing list? Also, a question about which customer type they should sell to, and what’s the best way to collect customer feedback. 

Before we dive into that, if you haven’t picked up my book, The SaaS Playbook, after the very successful Kickstarter a few months ago, momentum has continued with the book. And if you haven’t picked it up, you can go to saasplaybook.com, or search for SaaS Playbook in Amazon or Apple iBooks. Is that even what they call it anymore? Audible, all the places. And if you have read it and you like it, I’d really appreciate a five-star rating on Amazon or Audible. That helps me get discovered by new readers. 

I’ve been very pleased with the reception of the book, so much so that my wife, Dr. Sherry, and I have sat down and written a table of contents for a new book. Glutton for punishment, I believe, is the expression you’re looking for, but we are looking to start writing that here in the next few months, so that would be, at the earliest, an end of ’24 release, most likely maybe spring of ’25. That’s going to continue to be around topics about being a startup founder, diving into the psychology and mental struggles of a certain aspect of being a founder, a certain point in time that many of us aspire to achieve. So more on that later. 

I want to dive into our first listener question. If you want to send a question to the show, go to startupsfortherestofus.com. Look for Ask a Question in the top nav, and submit your question. Obviously, as I always say, audio and video go to the top of the stack. I will try to get to a couple of text questions in this episode. So let’s hear our first one of the day.  

Luke:
Good day, Rob and team. I’ve got a small SaaS that is performing humbly, with a few thousand users having created an account and used the product. My question is regarding the email addresses of those people who have created an account. Can I consider that part of my “email list”? So if I were to start working on something new, can I email those people and let them know about it? 

For the longest time, I thought that I could absolutely do that, but then I saw some chatter about spam, and that my approach could actually be considered spam. If emailing those users isn’t technically allowed, how is an email list actually built, if it’s not from collecting them through various online ventures? Do we need to have a clear checkbox alongside the email input field that states, “I allow you to keep me informed about all the things you’re working on, not just this specific product.”? Look forward to hearing your thoughts.  

Rob Walling:
Thanks for that question, Luke. There’s the letter of the law, and that of course is literally going to depend on which country you live in, because the laws are different. And then there’s, I’ll say the kind of moral or ethical implications of it. Because letter of the law, if you acquire an email address and someone opts in and checks the box that they can hear from you or that they want to hear from you, I don’t know of anything in CAN-SPAM, which is a US law, and that’s what I’ll refer to the most during this conversation. I don’t know anything in CAN-SPAM that says I can’t email them about anything I’m working on, until they opt out. They need to be able to click on subscribe and opt out, but realistically, could I email them for years and years about different projects that I’m working on? I believe so, not legal advice, but that is my understanding. 

However, I am of the mind and the belief that I only want to send people things that they have opted in to hear about. And if I’m stretching that definition, for example, let’s say someone opts in at robwalling.com, which they get one of my books for free. It’s called Start Marketing the Day You Start Coding. And in that email, I welcome them and I say, you will hear from me again about stuff that I’m working on. And I hit them up a few weeks later with more info about things I work on on MicroConf and TinySeed. 

Now, if I go to email those users about a TinySeed batch application opening, I always put, at the top, first paragraph, first several sentences is, usually it’s something like, “You’re receiving this email because you opted in at robwalling.com. And as you know, I work on many things, one of which is TinySeed. It’s my accelerator, blah, blah, blah. If you don’t want to hear from me anymore, click this link right here and you unsubscribe.” Then I go into the email about TinySeed. 

Similarly, folks opted in at saasplaybook.com, which is my book website. And some folks give their email in order to receive the sample chapter. And that goes into my robwalling.com email list. It’s all one big list in Drip. And so legally, I believe I could just start sending them email about whatever I want because they’ve opted in. But I don’t. If you go to saasplaybook.com, in your email, what you’ll receive from me is the sample chapter. And then a few days later, I believe I send an email, it may be in the first email, I’d have to go and look at exactly what it is, but I basically say, “I work on a lot of things all related to SaaS. If you opted in to hear about this, you’re probably going to be interested in some other stuff I’m doing like Masterminds, like this podcast, this YouTube channel, maybe the accelerator.” And I give people plenty of notice and plenty of options and the ability to unsubscribe. 

And what I’ve found, I’ve done opt-in and opt-out over the years, where I will not put them on the main list. I’ll only have the list for this single product. And I found that most people were confused by that and said, “Well, I opted in. I wanted to hear about…” We used to do this with MicroConf. This is a great example. We would have a different email list every year for MicroConf. So like the MicroConf 2011 list, we didn’t roll it in to the 2012 event. And we started a new launch list from scratch. We did that for a few years. And then people would tell us, “I’m so confused. I thought I opted in to hear about MicroConf.” So that’s one example of, obviously, we should have just been smarter, but we eventually just started, all right, there is a MicroConf list, and once you opt in, you are going to hear about MicroConf stuff. And we don’t get complaints about that. 

And in fact, even the way I’m talking about with my book, how I ease people in, if you sign up for a sample chapter, then I merge you into the Rob Walling list. But I call that out, either at the top of an email or in an individual email, saying, “Hey, here’s other stuff that I work on.” For example, “You opted in for a sample chapter of The SaaS Playbook, but here is an entire book called Start Marketing the Day You Start Coding that is free and here’s the link to the PDF.” So to me, the laws are less strict than I think that we should act. We should be looking to be transparent and honest with people who opt into our lists. 

And so I’ve been in your shoes. You have an example of, I’ve had 2,000 people sign up for this product to get an account in this product over the last several years. So I’ve been in that situation, where I have emailed all those people who had signed up and canceled, and some were still customers, when we launched a big new feature as part of that product. And I couched it with, “You signed up and you canceled, and I’m not going to keep emailing you about this, and unsubscribe here if you want to. But, I felt like you would be interested in this.” And I did this with Drip 2.0. “Drip 2.0 is this whole new thing with automation and blah, blah, blah, and you signed up a year ago. And I think you might be interested in hearing about this.” So that feels like an easy sell to me. I don’t think you’re going to get many complaints. 

However, if they opted in to try out a product, and while technically, I have the legal right to email them about a new book I’m working on that’s completely unrelated to that product, I don’t think that’s cool. I wouldn’t do that myself. I would want to think, is there enough connection between these two things that I can bridge that with a paragraph or an email? And if I can’t, if it’s really far flung, there is an app for social media posting, that’s the app that they opted into, and then I’m going to go write a book about something completely different, building SaaS companies. In that case, personally, I would ask them if they wanted to opt in, rather than opting in by default and just letting them know, as I’ve said in my previous example. 

So there’s a little bit of judgment call here and I will say, you said that you felt like you’d be able to email them and then there’s talk online that your approach is spam. I’ll be honest. Look, I ran an ESP for years. There are privacy purists on the internet who say, any bulk email is spam and they’re just (beep) about it. And we would get this complaint all the time and we’d have these people who were either, they were so far off in their perception of how the real world works, that they were just kind of obnoxious (beep). 

And so if you get online and you’re in Hacker News or you’re on Reddit or you’re on Stack Exchange, especially with developers, and especially with open source developers for some reason, I’m sorry to throw shade, this is the pattern that I kept seeing was, the whole internet should cater to their whim and exactly their opinion. And even though the law says something different, and even though I kind of have my own moral and ethical code around sending email, boy, if it didn’t line up with them, then you’re a (beep) communist or whatever they want to throw at it. It’s like, there is no room for conversation. 

And so what I’m saying is, be careful with taking people’s perspectives on the internet, especially on public forums, especially on anonymous public forums, about what they consider as spam and what you should and shouldn’t do. In my experience and what I do is I ask myself, if I was on this list, and I opted in for this thing three years ago, and they emailed me, what would I need to read in that email to not feel like I’m pissed off they’re spamming me? What would I need to read? And if I can’t write anything that would make me not think that, then, at best, I’m going to email them and say, “Hey, you signed up for this. I’m working on a new book. I’m not going to email you about it again. Click here to opt in if you’re curious.” That’s the most I’m going to do if these two things are completely unrelated. But if they are related enough that I feel like I can bridge that, then usually, for me, that’s what I do. 

So thanks for that question, Luke. I’m sure it’s something that other people have encountered as well. And this actually brings up an interesting point of the advantage of building things that are related. Because if you opt in to robwalling.com, and then later on, I email you that I have a new book out, that makes total sense, you would expect to hear that. If I email you about Mastermind Matching with MicroConf, probably still in your wheelhouse. If I email you that Startups for the Rest of Us had a great guest or three great episodes or we’re hitting our 700th episode soon, I’m the host of the podcast, it kind of makes sense. 

I have this luxury. It’s an intention. It’s not like I lucked into it, but I have a luxury of, most of our lists, if you look at robwalling.com, Startups for the Rest of Us, MicroConf and TinySeed, they’re all closely related enough, that any one of them emailing another list with their announcement can be couched with just a few sentences of why you’re hearing about this. And while we are careful with the volume of email we send, it’s a nice to have if your projects are related enough that you can contact an existing audience that you have, rather than doing what I used to do, where I had nine or 10 products completely unrelated so none of the customer bases could be co-promoted to another of my products. 

And that was just the way things played out in my early career. But if you’ll notice, as I’ve gotten further along, my software products and my companies have become more and more aligned, because this concept of building kind of a single audience and being able to share audiences between them is pretty powerful. So thanks for that question. Hope it was helpful. 

And with that, let’s roll our next question about whether to build a service or sell it as an affiliate.  

Inad:
Hi, Rob. My name is Inad. Thanks a lot for all the content you have been providing over the years. I’ve been trying to follow the advice of, find a solution to an existing problem, focusing on B2B. My challenge though is that I found several ideas based on problems certain people in certain roles are having, but I also found that there are solutions out there they are not using. They are either using a crappy service that has better alternatives out there, or they are not using a service at all and they are just struggling manually. 

I see this as an opportunity, but I’m not sure how I can take advantage of it. For example, should I build another service, even though that there are alternative services out there, just because they are not using any of these? Should I check for an affiliate program for these existing services and I connect these people to these services? What do you suggest how I can tackle this? Thanks a lot.  

Rob Walling:
I like this question. It’s pretty creative actually. So I think it depends on your goals. I think that being an affiliate for a SaaS product that offers recurring commissions could be an interesting step one business. Y’all know, drinking game, stair-step method of bootstrapping, step one business, it has platform risk. Usually it’s not going to get you to $10, $20, $30K a month, and that’s how I would view selling someone else’s software as an affiliate. 

So do I think it could be an interesting step one? I do. Do I think, if you don’t have an audience in this space and you are just doing maybe cold outreach or maybe if you’re creating content around it and actually treating it? Yeah. Think of it like the skeezy review sites where they’re like, we’re going to review the best podcast host, but really, the ones that pay us the highest commission are ranked number one, two, and three. So I personally wouldn’t go down that road. But if you’re going to actually go out and actively try to market other solutions. 

But I guess if you’re doing cold outreach, it’s going to be kind of a grind. You need to make a lot of money for that to be worth your time, versus if you create more of an inbound funnel where people can click and you can get the commissions, it’s two separate skill sets. But you’re also going to learn a different amount. If you do the cold outreach and you actually are doing demos or consulting, and maybe even charging an onboarding fee to help people get set up to where you really become a freelancer contractor agency that is helping people get onboarded with solutions. And we have these back in the day with Drip where people just came out of the woodwork and said, I offer this service. It’s like the Drip onboarding and setup service. And they would get an affiliate commission and then they would get paid X thousand dollars to get people set up. 

There were some folks charging like 10 grand to migrate and get your stuff set up on Drip. Is that interesting? I mean, if you’re interested in learning about the space. And what you might learn is that building another tool is a great idea. And what you might learn is that building another tool is a terrible idea. But I think doing that handholding and assuming that the money is there, and at least giving it a shot, I don’t know what you have to lose other than some time. 

And I think for me, I’d be optimizing for learning, rather than money. Because I think if you’re in it to try to get recurring revenue from an affiliate commission, and for that to be enough to move your needle, I think it’s going to take a long time and a lot of effort if you’re starting from scratch right now, because there are going to already be companies that are ranking for these terms. Unless you see a real through line and a straight line for you to go from zero to an audience, or zero to recurring traffic channels in this space, it’s going to be a ton of work. Again, if you’re optimizing for learning, that’s okay. A ton of work without making a lot of money, at least let’s have learning going on, learning meaning I’m learning about this space, I’m learning maybe we don’t need another tool, or maybe I’m learning that, oh my gosh, if we just had another tool that did X, Y, Z, it would be so much better. These are the things I’d be trying to learn. 

So I’m not a hard no on this, but I definitely don’t see it as this has such platform risk. You’re not in control of the product. Do I see you wanting to do this for five years? No. But do I see in the short term doing it to make some money to learn about the space, to evaluate whether or not you want to launch a competitor? It’s an interesting idea. It depends on how much work you want to put in and the approach. Like I said, do you want to do a high touch approach and charge a lot of money, almost as a consultant? Or do you want to try to do this low touch approach and just learn the marketing, learn the funnel and see if you can get people to click through and convert? Certainly an interesting question. I appreciate you sending it in. 

Third question of the day, I’m actually going to bounce over to a text question, because this one has been in the coffers for eight months, it looks like. Apologies, y’all, but I can only do so many of the listener question episodes. But this one, the asker asked to remain anonymous. The subject line is SaaS sale and valuation. And he says, “I’m parting ways with my business partner due to a fallout. In short, I’m looking to get full control of the SaaS, but I’m struggling with evaluating the valuation. Do you happen to help with valuations or investing in SaaS companies? We have a turnover of around $18,000 a month. Please let me know your thoughts.” 

Given that this was eight months ago, I’m guessed that the asker has sorted it out since then. I wanted to read this on the show and answer it because I have known, I don’t know, a couple of dozen founders who have had to deal with this, who have had a fallout with a co-founder and they’re trying to value the business. And so what I would do is, I would talk to a broker and I would probably pay them for a valuation. So you contact quietlightbrokerage@quietlight.com or FE International, explain the situation and ask for what they think the business would be valued at. Maybe they charge a few hundred dollars or whatever, some number in order to get a third party valuation. 

You could also ask privately. I have weighed in privately on some valuations based on my experience. You have to take all this with a grain of salt. It’s not like buying and selling stocks. It’s an inefficient market and there’s a lot of it depends, and that’s what you’ll hear. It depends on the growth rate. Like having a static $18K per month. Well, if it’s growing a hundred percent year over year, the valuation’s different than if it’s 30% or less. What’s your churn like? What’s the space like? There’s all this stuff where it’s kind of like, well, it changes the multiple. The generic multiples that we throw out really depend on a lot of this stuff. 

But I have been involved in multiple companies, some of which I was invested in, where one co-founder leaves and the other one buys them out. And usually, the buyout is a little less. It’s usually less than market rate for that app, if you’re buying them out in cash. Because it just should be. Because you are left with the business and you now have to slash get to run it. 

But realistically, I think the easiest, the cleanest way is you’re going to be brokers in our space. So it’s Quiet Light Nefi for this type of business. I think as you get larger, let’s say you get north of a million ARR, you could still talk to Quiet Light Nefi, but Discretion Capital, run by my friend and co-founder, Einar Vollset, would be great to reach out to for them to weigh in. 

And if you’re big enough, what’s interesting is, let’s say you’re doing two or $3 million a year and you’re growing pretty quick. And you decide the valuation is $12 million bucks or something. And you want to buy your co-founder out and they own 50%. Well, that’s a lot of cash to come up with. There are outside parties, and Einar has experience with this through TinySeed and Discretion, with these private equity firms that are growth-oriented and they’re willing to write a bigger check to buy out founders. And they can buy out the founders if they’re staying. They can buy out a founder if they are moving on. And they’re willing to come in and some of them even have a playbook of how to take a SaaS from that $2 million to $10 million ARR mark. So this is something that I’d never heard of and really just didn’t exist 10 years ago. And so it is another option for liquidity for a situation like you are talking about in this email. 

But as I said, that would only be available if you were further along. It is not going to be at $18K per month there. I don’t know of anyone that’s willing to do partial buyouts at that early a stage. If there are any, there’s probably one or two and they’re probably extreme value buyers, meaning they’re going to give you very low multiples. 

And then of course, your other option is to sell the whole company. It’s to go to any of the brokers I just mentioned. And add acquire.com to that and just try to cash out the business. You each walk away and then you get to start your next one. So thanks for that question. Hope it was helpful. 

The next question is about the best way to collect customer feedback.  

Speaker 4:
Hey, Rob. How are you doing? I want to say that I’ve been fan of the show, had been listening these whole year, in the beginning of the year when I discover it. And a bit about me and I aspiring founder. I still on the process of validating a few ideas that I have. But this question is a bit related to customer feedback. You had mentioned extensively in a lot of your podcasts, in your book, which I have by the way, The Saas Playbook, and many other people also have mentioned that customer feedback, acquiring customer feedback, is super important. So my question is, what will you recommend for acquiring this customer feedback? Which mechanisms, forms, emails, phone calls or video calls? Anyway, I appreciate all you are doing and keep it on. Bye.  

Rob Walling:
It’s a great question. It’s a common question. So to me, in the early days, if you’re doing one Z two Z, then the higher the fidelity, the better. If you can get a customer on a Zoom call or a phone call, that is going to be greater than anything else. Because again, it’s just high fidelity. You can read body language. You can have, even if it’s a 20 or 30 minute conversation, there’s so much information that is communicated in that that won’t be communicated if you have a form or an email. So that’s optimum if you can get people on calls. 

Sometimes, people don’t want to go on calls. I will be asked for feedback about a tool I’m using and I don’t have time to do that. So I might write three sentences in an email. Or I might record a Loom. So Loom is interesting because it’s kind of halfway between maybe a text email and a video call. You don’t have the back and forth interaction that I would like, but you do get the high fidelity of voice intonation and body language and hearing someone’s real interactions or seeing their real interactions with your product. 

To give you an example, with MicroConf, we just added paid tiers to MicroConf Connect and that is our online community, 5,700 bootstrap founders. You should check it out, microconfconnect.com. But producer Xander did dozens and dozens of one-on-one calls to learn more about what people are looking for from Connect. And once they get in to learn what they’re liking, and perhaps where their expectations didn’t align with what we’ve delivered. So he did a ton of calls. At one point, so in the early days of Drip, before we launched, I had 3,400 people on an email list. And so I think I did a couple of phone calls, but most of my early, early stuff with about the first 20 people was via email and that’s what they preferred, and frankly what I preferred too. 

But I was also trying to get data from the broader list and 3,400 people’s a lot. And so I did use a survey. I actually covered it… What episode was it? Boy, it’s got to be in the 200s, maybe the 300s. I realize it’s not a bunch of guidance. If you go back and look for an episode, it would’ve been in 2013. And it’s going to be me talking about kind of a customer development survey. It’s a really good episode. It’s one of my favorite episodes from around that time, where I walked deep into exactly the survey I sent out to the entire list. And then I will walk through some of the results. And I still have those results actually in a Google Sheet. I was looking through them the other day and I was like, man, it was very helpful for me to learn that. 

But if you don’t have 3,400 people on the list, don’t send people to a form. No one wants to fill out a survey. They’re not going to type a bunch. They think no one reads it. Like having the one-on-one connection, that’s the highest fidelity learning that you will get. So I would lean much more towards phone calls or video calls, and at worst, one-on-one emails, assuming that people will respond to you. Because oftentimes, the hard part is not the mechanism of feedback, it’s that people just won’t respond. And they don’t want to spend the time out of their day to help you out. And getting on a Zoom call is cumbersome for a lot of people who are busy. And so that’s the thing is, I lean towards higher fidelity if it’s possible, and that’s the caveat. So thanks for that question. Hope it was helpful. 

My last question of the day comes from longtime listener, David.  

David:
Hey, Rob. This is David, longtime listener and appreciate all you do for the startup community. My first startup was acquired a couple of years back, completely bootstrapped. My co-founder worked a full-time job up until the day we were acquired. It was great. And now, after about two years, I guess, I’m looking for my next startup, and I’m focusing on the HOA space. 

Homeowners associations are a big market. I’m on my board right now and there are tons of challenges. One of the challenges is figuring out whether we sell to the property management companies, which seems a little bit more of a saturated market than the HOA boards themselves, which could be really hard to contact. So we have an MVP, at least a concept, we haven’t built it yet, and I’m thinking about just trying to start selling to boards and property managers, just to see if it resonates, before creating a landing page. But just asking for any advice you have on how do we figure out whether we can actually distribute and sell to HOA boards or whether we’ll have to go the property management route. Thanks.  

Rob Walling:
So to truly answer this question in detail and tell you exactly what you should do, I would personally need some experience or have funded companies who have tried to sell to HOA versus property managers. And I do not have that experience, and I have not funded companies that are selling to those. So all I can do is weigh in on how I would think about it if I were in your shoes, knowing what I know. 

And the two things that come to mind are, number one, I would try to figure out, is it harder for HOA boards to make a decision to buy than it is property managers? My gut is that it is, because it’s a board of people. And anytime there’s a group of people, they’re going to kick decisions down the line. There’s going to be 4, 5, 6 chefs in the kitchen, so to speak. My gut tells me they’re going to be a pain in the to sell to. So I would lean towards property managers where I’m guessing that I could find one decision maker and close more deals. That may or may not be true. I don’t know enough about the space, but that’s probably the hypothesis that I would look to validate or invalidate if I were in your shoes. 

The second thing that I would think about is running a test and actually marketing and trying to sell to both. I know that it would require a bit more work because I’m doing, let’s say, cold outreach. Well, now I need two campaigns because I’m reaching out to the HOA boards and the property managers. Or if I’m doing inbound marketing, I obviously need probably different content marketing or SEO posts or whatever it is I’m doing to attract that inbound. I know that it means more work. But until I know for sure, I want to keep asking questions and trying to validate this. That’s really the way that I’m thinking about this. And the way I think about everything is everything’s a hypothesis until I’ve mostly proven or disproven it. 

Now, am I ever going to get to a hundred percent certainty that it’s only HOA boards or property managers? You’re not going to get there. You’re not going to get to a hundred percent. And I’m sure you know this, having listened to this podcast. But some founders come to me and say, “I’ve just done all this conversation. I still don’t know what to do.” And it’s like, you’re never going to know what to do. You just have to take your gut and add it to the information you have and make the best choice. And even if you get to 50, 60, 70% validation that your hypothesis is correct or is incorrect, that’s better than you had a month ago or two months ago. 

And so that’s what I would try to think about is, what’s the next step that I could take to figure out, are HOA boards hard to sell to versus property managers? Does this involve going to an in-person event for property managers? Because we know those exist, right? Are there in-person events for HOA boards? I think HOA boards, aren’t they mostly volunteers? Question mark? You can tell, my familiarity with the space isn’t there, but my familiarity with making decisions like this is there. And the first thing I would do is, how do I collect more data? 

And so maybe it is cold outreach to HOA boards to see if anyone will respond. If they’re not looking for it, and you reach out with a question around, “Hey, you have this problem, does it need to be solved? I’m a local entrepreneur trying to solve this problem. Is this even a big problem? Just starting. I’m not here to sell you anything. I’m just curious if this problem is enough of a pain point that…?” And if you reach out to HOA boards and property managers, and one of those groups just completely doesn’t get back to you, then how are you going to find customers when you actually have a product? I’ve said that on the show before. It’s like, response to outreach and response to marketing, before you have a product, can be a pretty good signal of how hard the space is going to be to sell into. 

And realistically, let’s say you get in touch with a bunch of HOA boards and property managers and no one responds, so where are you then? Well, then I’m thinking, okay, so cold outbound at least isn’t working. So then, do I need to do inbound? And which of these is most likely to be looking for this solution? And if there’s no inbound opportunity, how are you going to market it once you’ve spent the six months to build a product? That’d be at the top of my mind is, are there any Google AdWords? You can run Google AdWords and just lose money right now, because what you’re trying to do is learn. 

And if HOA boards versus property managers search for this software, and if they search for it the same or different, I don’t care. Even if I’m paying 10 bucks a click, if I have the budget just to get into conversations by buying ads, this may be AdWords, maybe it’s Facebook, maybe it’s Instagram, where do property managers and HOA boards hang out? I don’t actually know. Facebook groups? If you’re in my hobbies, I know where the people hang out. But I don’t know it for this specific industry. And so in your shoes, that’s what I’d be trying to do is find out where they hang out online. Find out where they look for solutions. 

My guess is, there is some in-person component to this, and it’s a lot of word of mouth. And whether there’s an industry… Again, is it industry event or trade pub? Or is there a Slack group or an industry Facebook group where they hang out? That’s usually something that forms around these organizations. I would personally want to familiarize myself enough with this that I can make a decent gut instinct to call on. I think these are going to be easier to sell to rather than the others. 

And with all that said, there’s a chance that going after both is the right call, that literally going after two verticals at the start, it’s not a hard pass for me. Just because we talk about niching down or focusing our product doesn’t mean that we can’t have a couple of highly related verticals, especially if both of them onboard and use the product in the same way, even if the sales process is slightly different. I don’t know. It’s something I would consider in your shoes. So thanks for that question. Hope it was helpful. 

Thanks for joining me again this week. As a reminder, if you haven’t checked out The SaaS playbook, you can head to saasplaybook.com. Search for it on Amazon. And if you’ve already read it and you liked it, it’d be amazing if you could click that five star rating. This is Rob Walling signing off from Episode 690. 

Ooh, only 10 episodes away from 700. What should I do for that episode? If you have an idea of something I should do special for 700, questions at startupsfortherestofus.com and let me know. I may or may not do anything special. If you look back at 600, it was me talking about some Beatles songs, Strawberry Fields Forever, and I didn’t even mention it was 600 until the last 30 seconds of the episode. So we’ve done something special for most of the 100 anniversaries. I think 1, 2, 3, 4, and 500 we’re always special episodes. 600 was less so. At a certain point, I think you kind of run out of ideas of new and creative things to do at the 00 episode mark. But certainly, if you have an idea, shoot it over to me. And with that, I’m really signing off from episode 690.

Rob Walling:
Welcome to Startups For the Rest of Us. I’m Rob Walling, and today I sit down with Robert Cserti and we’d talk about how to keep your remote team motivated and engaged. This topic is based on a request that I received at MicroConf Europe, and Robert as the founder of SessionLab and a team of 13 has quite a bit of experience on this topic. He’s a founder, not a business coach or a consultant on how to keep your remote team motivated and engaged, but they have experimented a lot over the years with strategies and approaches for doing so. And I think it turned out to be a great conversation. 

If you’ve ever thought about selling your SaaS company or your WordPress plugin or even a content website, head to microconf.com/sell. We have some great resources for you there, such as The Psychology of Exiting Your Company which was a talk by our very own Dr. Sherry Walling, as well as a way to opt to hear about our Exit Event, which is an exclusive MicroConf retreat we’re thinking about running next year, plus links to episodes of Startups For the Rest of Us. 

And all of this is brought to you by our brokerage partner for 2023. It’s Quiet Light Brokerage. They’re an entrepreneur-led organization that assists people with growing, buying, and selling online businesses. I have a very high opinion of Quiet Light and how they operate their business. Their reputation is stellar in our space. Thank you to Quiet Light for supporting MicroConf and this podcast. And I hope you’ll check out microconf.com/sell as well as quietlight.com if you’re interested in learning more about buying, selling, and growing your online business. 

And with that, let’s dive into my conversation about keeping your remote team motivated and engaged. 

Robert, thanks so much for joining me.  

Robert Cserti:
Thank you. Excited to be here.  

Rob Walling:
Indeed, sir. So you are the co-founder of SessionLab. You are a TinySeed EMEA company, and the H1 of SessionLab is an easier way to design workshops, drag, drop, and reuse content, calculate time automatically, collaborate in real time. Create a workshop in minutes, not hours, with SessionLab. Can you give folks an idea, first of all, of the stage that SessionLab is at, whether it’s revenue or employee headcount?  

Robert Cserti:
We are 13 people growing profitably. And about SessionLab itself, we help facilitators, consultants, team leaders to design and deliver effective workshops. Typical use case, you would use our workshop agenda planner tool if you have a full-day strategy workshop or a two-day leadership retreat. Somebody plans these processes, what people do at what time of the day, and that’s the facilitator. And these are typically facilitators, agile coaches, org dev professionals, learning and development people. So we help them design better workshops. And next to that is also we have the biggest online library of workshop activities. So if you look for icebreakers, energizers, brainstorming techniques at the sessionlab.com/library and you can get inspiration for your next meeting or workshop.  

Rob Walling:
And in case folks are curious, where are you located in Europe?  

Robert Cserti:
We are a fully remote team. Our company’s officially Estonian. I live in Hungary. My co-founder’s in Sweden. We are Estonian e-residents and our company’s 10 different countries. That’s for our team members. Practically, we are remote since day zero. We happen to be in different countries and that’s how we started to grow the company.  

Rob Walling:
Well, that’s bootstrapped and mostly bootstrapped playbook almost, right?  

Robert Cserti:
Oh, yeah.  

Rob Walling:
That’s what we do. We don’t have the money to hire in these major cities and so we look around for the best people we can find. 

I want to set the stage for this episode. I actually was approached at MicroConf Europe in Lisbon just a month or two ago. And I didn’t get his permission to use his name so I won’t use his name. I’ll keep him anonymous, but he said, “You know what? I’d love to hear an episode about team engagement, specifically remote team engagement. How do you keep your employees, contractors, whoever you consider to be on your team, motivated, engaged?” Even just knowing one another, the more you know the other people on your team, the less likely there are to be, I don’t know, maybe conflicts. Or it’s easier to work together. 

I actually posted in the TinySeed Slack and I said, “I’m going to record an episode around this. Who has some thoughts on this?” And I got a bunch of really good responses, probably a dozen responses, from very knowledgeable founders, all running teams remotely. I think the first thing I was struck by was how many founders, including you, said, “I’m not an expert but here’s what we do.” So that’s the thing, you run this team. And how long has SessionLab been around?  

Robert Cserti:
Practically, we started the company 10 years ago. First five years was a hobby or side project. Then we realized, “Oh, we have customers. This is a business. Let’s build it.” Then we went full-time. A year later, we started hiring people as our revenue grew. So essentially, there’s two big distinct stages. And the interesting thing with remote engagement is it was definitely a process for us to realize that, well, building a team is a job itself and getting people engaged. Because initially as founders, we are into product and figuring out marketing and sales, and then realize, “Oh, we have now people on the team. It’s not only myself or two of us.” So we need to figure out what is our culture and how to keep people engaged. And that’s a very organic thing and it’s not the first thing that came to my mind. We also had our stage like, “Oh, we actually need to put more attention to how we engage people and what’s our culture.”  

Rob Walling:
Right. I think a lot of us who worked at other companies… I worked at a startup that was probably 40 people when it started or when I started there, and then it was several hundred by the time I left. And the company culture stuff always felt like just bull (beep) to me. It was like, “Let’s just come here and do the work.” But what I realized later as I started running teams as well, if you don’t introduce a culture, then the culture will happen on its own and you won’t be in control of it. And so that’s where mission, vision, values, I always thumbed my nose at them, these 50% companies. But a lot of that was because I didn’t feel like they were accurate or true versus my mission now. And I think MicroConf’s and TinySeed mission is to multiply the number of independent self-sustaining startups in the world. That’s a real mission and you see it, we’re actually doing that, most missions and values.  

Robert Cserti:
And you’re walking the talk, and that’s a big difference between a small and large company that you as the founder in a small team, you have an integral part in setting the culture.  

Rob Walling:
Right. We’re going to dive into your response along with some other points that were brought up by other folks. As I said, there were 12 different responses, but yours was good. It was long. It was detailed. It was thorough. And then your co-founder Filip even weighed in, and we’ll look at one of the points he raised. But in addition, there are some other TinySeed folks who weighed in, and certainly want to thank everybody who offered some points. 

Again, couching it with you’re not a company culture, neither am I, a company culture expert nor a consultant, but this is what’s working for you. And I’ve run remote teams. I would have to even count. It’s got to be four or five range. TinySeed is six people and MicroConf is five or six depending on how you count. And Drip was 10, half remote when we were running it. Anyway, I’ve just had a bunch of experience as well and I’ve seen what has worked and what has not. 

So let’s start with daily check-ins, and this is something that you mentioned that you do. You async daily check-ins specifically. A lot of people I know do not. We don’t do daily check-ins at TinySeed or MicroConf. We do have a weekly meeting where we get together and talk about stuff and then everyone, the introverted in our midst go separate ways and get work done. But specifically you said there are a bunch of tools for async daily check-ins. You are using Geekbot and usually when you start your day, if you’re working, it’s at SessionLab, you answer four questions, a combination of social and work-related. “How do you feel today? What did you do since yesterday? What will you do today? And what obstacles are impeding your process?” 

Talk me through this. Is this working? Did you try other things and weekly wasn’t enough? Why do a daily async check-in?  

Robert Cserti:
Yeah, absolutely. First of all, it’s a very iterative process to come up with what works for you and your team. We had different processes in place at a size of 3, 4, 5 people, and now at 13, and probably will have different as we grow. I think just to take a step back, one thing I would structure the thinking on various tools and processes, I see two big purpose. And we can break down to further subpurposes, but two big areas, both want to help with efficiency. So enable people to get their work done efficiently because everybody likes to do great work and be enabled to do that. And in the same time, also help people to feel valued, to feel appreciated, and to feel belonging. And most of the tools and structures are either for one or the other or a mix of both. 

For this part, the keeping aligned, we actually do weekly alignment calls as well. So every Monday, we have three bigger teams in the company, product, marketing, and customer success. We have a 30 to 45 minutes sync call where we align on the weekly priorities. And if there’s any questions, then we discuss those more in detail. And then these check-ins, then it’s a mix of keeping that alignment and also a social part, because essentially it feels good when we know that people are around. They are present. They’re available. And also it’s how we shape these things. I think important that, again, you’ve walked the talk, what you expect when you communicate with your colleagues. 

A fun thing that emerged over the years, we have people joining and they say, “When I was working in-person, I never knew that much about my colleagues.” And that’s because we share a lot of personal things in this first question, “How do we feel?” They don’t just say, “Yeah, I’m okay.” But what did I do yesterday, what I did the weekend with friends, with my kids, whatever. And it’s really up to the individual how much effort you put into it. But once you start opening up, you share more personal thing, you show some vulnerability, people get that and then they also join in that. So then it’s like a good, I think, water cooler. And just like when you enter a real office, people say hi to each other and they may have some short chat. Here as well. You can engage with it if you want a given day, or you can just not if you have other things to do on that day when you start. 

So that just evolved both with a social purpose of having this water cooler, and next to that, essentially helping each other know that what am I focusing on a given day. There was times when it just these slightly different question, it didn’t work as much. And then every once in a while, we reflect. Does this still work? Is this still giving value? If not, we tweak on it. If it’s good, then we keep doing it.  

Rob Walling:
And in addition to a daily check-in, it’s very common to have weekly, monthly. And there’s one-on-ones and there’s groups. And you specifically called out a few of these. You said these regular practices that some other folks mentioned were, I believe, do you have a week starting team alignment call?  

Robert Cserti:
Yep.  

Rob Walling:
45 to 60 minutes?  

Robert Cserti:
Yeah. Practically, with each Monday we have a team call with a subteam. So in our case, product, marketing, customer success where we align on the priorities, see where we are with our quarterly objectives projects, and that gives a focus for the team. And these daily check-ins are more like just what do I do on a given day, breaking it further down.  

Rob Walling:
The weekly get-on-the-same-page meetings, is that the entire company or is it team-based? So if there’s product and dev, that’s one. And then customer success and support maybe is another.  

Robert Cserti:
In our case, we now do it, team-based. But again as we evolved, I think when we were size of five, six, we had it together and then we broke it up. Then product was a bit bigger team and then customer success and marketing did together. It’s really like what type of projects and goals we have in a given quarter and just making sure that these alignments support achieving what you want to do in a given quarter.  

Rob Walling:
Got it. And then I believe, do you also have a biweekly all-hands that’s 45 minutes?  

Robert Cserti:
Yes. We just change it actually from weekly to biweekly because it’s a lot of meetings, and in product-  

Rob Walling:
Yeah, that’s the problem.  

Robert Cserti:
In a way, there is some meetings have a cost and so does working on a dead end path has cost. So there is a fine line between the two. And it really depends on your team as well, how much experienced people you have, what type of things you work on. We are trying to use for example the all-hands more for the purpose of some more inspiring presentations or things that everybody is useful to know about. Let’s say if you work on customer personas or have a big design project, that affects everybody. Those are good to be presented, while it’s less for aligning in terms of a practical operational way.  

Rob Walling:
Got it. And those are still work-focused, not a monthly hangout that I heard several folks talking about?  

Robert Cserti:
Yes, that’s right. So yeah, the all-hands are more for keeping us on the same page, what’s happening on a big picture or more on a strategy level. We also want to make sure that on the side of let’s have some more team bonding and team connection, we have every month, month and a half, some online team event, an hour of ideally something facilitated activity where we get to have some fun. I would say if we would work in-person in one city, we’ll probably go out in an evening or do some activity together. We don’t have that so we want to make space. 

On the grander picture, what really helps us is to have also team retreat. We try to have it twice a year. All of us get together for a week, and we use it both for a work purpose to workshop on a project that really benefit from that focused attention that you can have in live, and also have some leisure day when we have some organized activities and all the leisure time, all the unstructured time we have together. But in our case, there is half a year between them. So we want to make sure that next day, the everyday work, there is some activities where we both celebrate successes and also have some moments to build connections and build bonds, and again, just have opportunities where we can bring a bit more ourselves.  

Rob Walling:
Yeah. It’s a luxury that we have at MicroConf, TinySeed that we have so many in-person events that we don’t have to structure or we haven’t traditionally structured external team retreats where we just go to a place. Because we meet up at MicroConf, we meet up at TinySeed retreats.  

Robert Cserti:
Yeah, that’s an amazing opportunity.  

Rob Walling:
It’s really nice, and it’s an opportunity that SaaS companies don’t have because you’re located remotely and there’s just no reason for you all to be in a room. But the value of getting into a room, I know as companies get bigger, I believe Zapier went down to a once a year company retreat because it’s a quarter million dollars or something to throw their company retreat because it’s so many people. But it’s like I think three times a year would be ideal to get people together.  

Robert Cserti:
And it’s amazing how much those intense in-person meetings fuel collaboration. There’s a concept of a trust battery that you build with small human interaction and when you spend time together. And when that battery is high, then collaboration is happening at a higher quality during online work. So we definitely see after retreat, we communicate more, we shift things faster, we solve these agreements faster. It makes a difference. And then we need to also get by between two retreats to build up these trust batteries practically or maintain them to a high enough level that it doesn’t deeply do much before reach next one.  

Rob Walling:
Right, for sure. And so we were talking about an all-hands that you do every other week that is still focused on work stuff. Do you also, much like several of the folks who weighed in on the TinySeed thread, do you also do a monthly hangout where it’s still remote and it’s the team getting together just for happy hour-ish and more personal conversation?  

Robert Cserti:
Yeah. I would say that that’s more the team bonding focused events where we don’t have work agenda but it’s really to have an hour of time spent together ideally doing something which has some themes, some activity. One of our favorite activity that has been a big success whenever we played is an online board game called Cozy Juicy Real, which is again an activity which is somewhat facilitated and you open up about certain aspects of your life and you give appreciation to each other, you express gratitude to each other, and that just makes feel everybody happy. 

In the end, I think all these retreats and team activities definitely does have a cost in time and money, but people want to be part of a workplace where they are valued. If I reflect in my previous work experiences as well, whenever I feel that my bosses value me, I really put my best there because I don’t want to let people down who care about me. And that feels good to be at a place where you’re valued.  

Rob Walling:
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 1,000 on-demand vetted senior results-oriented developers who are passionate about helping you succeed, and all that at competitive rates? 

Meet lemon.io. They only offer handpicked developers with three or more years of experience and strong proven portfolios. With lemon.io, you can have an engineer start working on your project within a week instead of months, plus you won’t waste your time on candidates who aren’t qualified. lemon.io gives you easy access to global talent without scouring countless job boards, and it’s more affordable than hiring local talent. And if anything goes wrong, lemon.io offers swift replacements. So it’s like hiring with a warranty. If you need to grow your engineering team or delegate some work, give lemon.io a try. Learn more by visiting lemon.io/startups and find your perfect developer or tech team in 48 hours or less. As a bonus for our podcast listeners, get a 15% discount on your first four weeks of working with a developer. Stop burning money, hire dev smarter, visit lemon.io/startups. 

I want to read a couple of other responses around a monthly hangout that were in the Slack thread. These are from other folks who weighed in. One person said, “We have one monthly call with the entire team. We do a round of personal and work-related updates followed by a round of talking about a fun fact or playing a game on the call.” So it’s similar. It’s a good way to get to know everyone and learn a thing or two about them that usually doesn’t come up in normal work-related conversations. And then another founder weighed in. “We started doing a monthly happy hour for a social gathering of the entire team. We do social activities like trivia games, Guess the Desk,” I’m not sure what that is, “et cetera. People seem to love it.” So this does seem to be a relatively common theme with remote teams.  

Robert Cserti:
Absolutely. And I think it’s like you don’t have that intense human interaction as you would have in-person, so you need to make space for various ways for people to interact, both in a group setting, also if you can in a one-on-one setting. One of the useful things that we have seen that we are trying recently is people working in same teams, they interact often. But people who don’t work in the same teams don’t talk as much or don’t interact as often. And we introduce, for example, one activity where we have randomly assigned one-on-ones. So not for work purpose but just take half an hour from working time and just have a chat. And we use a Slack app called Donut for this, which essentially takes the scheduling or the randomization, which is also a nice small thing that it makes sure that between two retreats or between two such intense occasions, you actually get to speak with everybody on the team if you want. 

By the way, most of these things are also optional. The online team events, the extra one-on-one chats. So if people want, they can. They’re not forced to participate. But most people love it because it just builds human connections.  

Rob Walling:
I’ll be honest. You all do more than I typically do with my remote teams. And when I hear you describing the meetings, it feels to me like, “Wow, that’s a lot of meetings.” But maybe it isn’t that way. Maybe it doesn’t feel that way in your company. How do you think about that? At what point is it too many? And does the value decrease? Because each of these things you introduce can increase connection, but I think at a certain point, people will also glaze over at another Zoom meeting.  

Robert Cserti:
Yeah, that’s a good question. I think everybody need to evaluate it for themselves. What is the point where you feel it’s too much? In our case, that’s an average weekly two meetings for alignment and team purpose. Is that much or not> we feel when we have less, that we either have a gap in the team bonding side or we have a gap in the alignment side. And essentially, one of these is more for alignment, one of these is more for the team spirit. And very importantly if you have a team, I think one thing that we initially thought this all on us as founders to figure out, but people who are in our team, they have experiences themselves as well, what worked well in their previous jobs and not. So we try to reflect together what works well and what not. And there is a process. For example, we recently figured out that it’s not worth it to have every week in all-hands so we do it biweekly. And if it doesn’t give value biweekly, then we do it monthly.  

Rob Walling:
Right. So if you find you’re in too many meetings, you space it out further, as you said. You went from weekly to every other week to monthly. And I want to touch on two other points in this interview. Two things that you specifically called out that this first one I found interesting you put in the Slack thread. “Another interesting addition in the past half year in our workflow was part of our team using a sort of spatial video conferencing tool to hang out there during the day. The concept is it’s easy to move your avatar away. But if you want, then it’s very quick to start communication with other people just by moving next to them.” And you’re using spatial.chat for this.  

Robert Cserti:
Yeah, that was a fun experiment which is more in the work efficiency category, in that initial categorization that we realized that we had a couple of more context projects where it was important that we can align quickly when we have a problem. We had a major infrastructure change and we had series of bigger questions where it was just important that the key developers could interact quickly. And then it’s definitely not a tool we use company-wide, but there is opportunity for people who find it useful to do it. Essentially, you need to still have a chance to work focused and it gives that, but if you quickly need to regroup to discuss something, then you do that. 

And for our case, our dev team enjoys it so they going back there on a regular basis. And I think most days, one or two hours. It’s important to have the discipline though because you just don’t want to hang out because it’s definitely a need to have focused time to do deep work. But if you find what is the intersection then, and especially if you have a need for that, if you have a project where… Because sometimes work is simple and you have well-scoped projects to work on that everybody can take on individually and execute. Sometimes there is way more complexity and you need two people to be able to jam quickly on something. And when we recognize that case, then this is useful.  

Rob Walling:
One other tool you mentioned that I thought was pretty clever is you said, “It’s not so remote-specific, but one management tool I find really useful is sending a monthly reflection survey at the end of each month. It asks about accomplishments and challenges of the past month, asks how I can help, and asks for a rating on how happy, satisfied, they are and why.” And the results go directly to you the founder, not to the person’s manager. So talk us through the thought process of that and what information perhaps you’re learning that you wouldn’t if you didn’t have those.  

Robert Cserti:
This is a bit of a heat check on the team to get an impression of how everybody is doing individually. And first and foremost, which is even more important, that everybody has a mentor manager who takes care of one’s personal development and that one progresses. But this is more when we reached a stage that I was not anymore in a regular connection with each team member, then it was just a really practical way to… First the reflection part, that each month you actually have a moment when you look back, “This is what I achieved this month, and also what are my challenges?” And if everything is perfect, an ideal word, then this has no new information because the manager of the person already took care of that. 

But there’s always a couple of people who, for various reasons have various difficulties, more challenges, and they just essentially one outlet where you can voice that, “Well, I’m not that frustrated to proactively seek out support, but if I ask and I build the trust that whenever you say something that you need help, then I follow up.” Then people give that trust and they indicate, “Well, something is just not going the right direction,” and then they can help faster. So it helps to catch issues earlier on. And also it’s definitely have the element of not to go around once managerial line. It’s a complex word for a small company, but still give one more space to say if you feel that things are not in the right direction. 

And also what I found really useful is this essentially quantitative feedback of rate how you feel on a scale of 1 to 10 in the company, and it really is a quick feedback tool. If you give us lower than a certain rating, I know that I need to really follow up and pay attention. And not just me, but then we discussed with the manager there, “So what can we help? How can we support you? Whether you had a more difficult personal life in the past weeks or it’s work-related, what can we do to help?” So it just helps to catch these things.  

Rob Walling:
Well, thanks for talking us through all the tools that you’re using to grow SessionLab. I think before we wrap up, I wanted to offer one more comment that a TinySeed founder who I didn’t get their permission to mention him in the show so I’ll just keep them anonymous for now, but something they said that I think you and I probably both agree with but I’m curious to hear your take on it. They said, “I feel async remote requires different strategies versus purely remote where you can be synchronous.” 

This founder says, “We have very small overlaps of working day with the majority of our team, so we have to spend a lot of time on developing processes to ensure everyone is on the same page and working on the right goals. As much as we would love to do a big all-hands weekly catch-up to build team culture, it’s impossible for us to find a time that works for everyone. So we have to rely on Slack and ClickUp communication most of the time with varying levels of success.” 

So async remote different than remote, do you have experience with this? Do you have thoughts on it?  

Robert Cserti:
Well, only partially because we are in a lucky situation. We are roughly plus/minus one, two hours, same time zone. So we have the luxury to be able to meet each other. And I think it’s a sliding scale between almost having a full overlap versus having zero overlap. That’s a spectrum. 

In the end, I think the processes are very similar. It forces you to document effectively, to have the right processes. But also I think that’s a hard thing to start from. And I would definitely in this case make sure that it’s great to work with people remote if those people are experienced in remote and experienced in their specific job as well. So if I would not have overlapped with somebody who I worked together with, then I would be very cautious to handle somebody who just starts out. And one way is to just try to find people who are experienced both with remote work and with their specific field because that decreases the need of how close you need to communicate. 

And other than that, just take efficiency to a higher level. Yet you still, you need to build those async processes as well to have people feel valued and appreciated and part of that team if you want to build it for the long run. It’s easy to say and hard to do.  

Rob Walling:
I agree. I feel like in a perfect world, I would be in an office with my team maybe two days a week, two and a half days a week. That’s what we had when we were building Drip with most of the team, and it allowed us to collaborate, stand in front of our whiteboard, hang out, go to lunch. And then the other days we were at home and I was focused on getting work done. That was my ideal situation. That’s just not feasible really for the types of companies most of us are building. And the next hard, I’d say harder way to do it, it’s not hard mode per se but it is more difficult is to have a remote team and to have to try to get people together and get everyone to like each other and get people on the same page and build a culture. 

Then the next hard mode is async remote. It’s so hard when everything has to be a Slack response or a video recording or an audio recording or whatever it is. It really is a next-level challenge. And I would guess that most companies, whether bootstrapped or not, most companies around the world will have significant challenges doing async remote.  

Robert Cserti:
Yeah, that’s so true. It’s such a great opportunity if you can start at least with a team that is in roughly your time zones. That makes interaction easier. And also it just makes it easier to meet in live once a while because that’s a strong starting point. Also, to help defining your culture and align with those people.  

Rob Walling:
Right. And I know that’s what we’re talking about is just not feasible in every part of the world. You and I have this luxury of living in the US and in Europe and there’s a lot of talent within, as you said, plus or minus two, three hours of us. And some parts of the world, that’s just not the case. And so you certainly have your work cut out for you in that situation. 

Robert, thanks so much for joining me today. Folks want to keep up with what you’re building, sessionlab.com. And is there any social media that folks should follow?  

Robert Cserti:
Yeah on LinkedIn, Robert, C-S-E-R-T-I. Happy to connect there. And thanks so much, Rob. Pleasure to be here.  

Rob Walling:
Thanks for coming. Thanks again to Robert for joining me on the show, and thank you as always for listening to yet another episode of the show. This is Rob Walling signing off from episode 689.

Rob Walling:
Welcome back to Startups For the Rest of Us. I’m Rob Walling, and this week I talk with Lane Wagner of Boot.dev about how he’s mostly bootstrapped his coding learning platform to the most recent month’s net revenue of 110,000. We cover a bit of his journey, getting it started, how he was able to bootstrap it, why he raised funding, whether or not that wound up being a good idea, as well as diving into what got his growth to dramatically accelerate, where he was growing, not very fast, and then suddenly things ticked up into the right. I asked him about that. 

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 Leanna 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. 

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. Before we dive into our conversation, if you haven’t downloaded the two top secret exclusive episodes of this podcast that have never been in the feed, they’re called Eight Things You Must Know When Launching Your SaaS and 10 Things You Should Know As You Scale Your SaaS, head to startupsfortherestofus.com, enter your email and you’ll get both of those episodes, and each one comes with a PDF guide. With that, let’s dive into my conversation with Lane. Lane Wagner, welcome to the show.  

Lane Wagner:
Hey. Thanks for having me on, Rob.  

Rob Walling:
I’m excited to dig in to Boot.dev today. Your H1 is learn backend development the smart way. Welcome to the most captivating, finger-flying, addictive way to learn to code. That’s good marketing copy. Did you write that?  

Lane Wagner:
Thanks. I wrote a very similar version and then I have a marketing consultant that also helps tweak it.  

Rob Walling:
Nice. That helps. So, to give folks an idea of where you’re at today in terms of the business, you have graciously published your revenue numbers on Indie Hackers. We can link that up in the show notes, but you had some pretty incredible growth recently. Even as of four months ago, five months ago, you were at 24K MRR. No, 24K net revenue, in gross revenue in the month. This previous month, which was October of ’23, you were at $110,000. 

That’s a heck of a growth rate. What has gone on over there? We’ll get into your whole origin story, but what has happened to 4X in four months?  

Lane Wagner:
It’s been absolutely crazy. I was on the Indie Hackers podcast. It was actually back-to-back with your episode, I think. This is before they stopped doing the podcast, or at least took a pause from it. Yeah, that was when we were about 26K, and the last three months have all been over 80 or 90. 

We’ve pulled a few growth levers that seem to have actually had some good returns on them, and we can get into that, but it’s primarily YouTube. YouTube has been good to us.  

Rob Walling:
I do want to dip into it a little bit because I’ve been doing so much on YouTube myself with MicroConf. We’ve tried, probably three different … I’ve tried so many approaches on YouTube, where it’s like, “Well, I already record this podcast and video. Can’t we just put it on YouTube?” It’s like, “You can, and no one will watch it. You’ll get tens of views per day.” It’s totally meaningless. 

Then we tried doing clips because we have, sometimes fun clips, or we do Q&A, listener questions where we can have a question and an answer, and that’s going to be the topic of the video, and we publish those. Crickets, for the most part. I mean, basically our audience would watch it, and it was not growing the audience. 

Then we tried another thing and eventually we figured something out, and I won’t go too deep into it, but we basically went from 10,000 subscribers to almost 70,000 subscribers in about 18 months. So, we figured out our system and what works. 

So, I’d love to hear from you. You don’t have to give up the golden goose and tell everybody what you did, but I’m curious what your strategy has been to get this type of growth out of YouTube.  

Lane Wagner:
Good question. So, this is actually, is probably a good thing. I don’t have the typical, “Well, we grew a lot on YouTube.” Actually, my YouTube channel and my podcast channel has had growth, but it hasn’t been this astronomical thing that’s driven all the revenue. 

It’s been partnerships, primarily. So, collaborations with other YouTubers. So, a ton of legwork, Twitter DMs, emails, getting to know folks. I have a podcast, and you were a guest on my podcast, right? Getting to know people, writing great stuff that, kind of is adjacent to our product and getting in front of their audiences has, honestly been a huge growth channel for us. 

A lot of those people come in direct. So, they’ll hear about us on someone else’s YouTube channel or on someone else’s podcast and then come direct to our site, which is kind of hard to track, annoyingly enough, but we know that it’s the only thing working, so it has to be that. Right?  

Rob Walling:
Yep. To give folks an idea, obviously if you’ve never done backend development. You teach Python and Go. If you’ve never done it, or you want a refresher, or you want to get better at it … I was actually just clicking right before we hit record, going through your first Python demo course, and I was like, “I’m actually learning something.” 

So, it’s a B2C play, usually. I’d imagine you’re not selling to businesses, you’re selling to end users, who either want to become developers or who want to up their chops in these languages. How is that … I mean, my opinion, or my answer when people write in with questions about, “Hey, B2C. I’m going to do it,” and my answer is, “Don’t.” It’s jokingly, and there’s reasons. 

I mean, it’s not truly, don’t, obviously because you’re an example of a very successful business. Did 100 grand in revenue this last month. So, it’s not don’t, but there are, usually churn is high, and on and on. I’ve talked about all that stuff before. 

As you were building this business, did you know it would have the B2C issues, or really does it have the B2C issues? Is it relatively high churn, and is it little higher support than you’d like, and is it the typical, kind of B2C situation?  

Lane Wagner:
So, it does have some of the B2C issues. When I was early getting into this space, I was speaking with another founder of a company in the same industry who was farther along than we are. We’ve, kind of started to catch up now, which has been great, but they were quite a bit farther along than we were, back when I was talking to him. 

He’s like, “Just so you know, this space, churn is high,” and he’s not wrong. This is not a tool that, if you like it, you’ll just use it for the rest of your life. At the end of the day, whether someone succeeds with the product, goes through the course, learns a ton, gets a job, or fails, they get through the part that initially got them to sign up. 

There’s obviously, exceptions to that. Some people just love taking every new course that comes out. They’re big fans. But as a model, it is fundamentally different than a SaaS company. Then on the consumer side, actually we have not had that second thing you mentioned, which was support issues. I think that’s partially been how our entire team of three are all engineers, and we’ve engineered our way out of some of those problems, but they could have been bigger problems than they’ve been.  

Rob Walling:
You made a comment that I want to dig into. You said, “This is not really SaaS,” but technically it is a subscription for a tool to learn. So, technically we could say, “Oh, it is Software-as-a-Service,” but I think of it, the job to be done of Boot.dev, it could not be software, it could be someone driving to your house. 

The job to be done is teaching you how to uplevel your skills, or frankly just to learn from scratch, Python and Go. But when you say, you thought it was SaaS, but it’s not, what’s your thinking behind that comment?  

Lane Wagner:
Yeah. This really, I think, set me back quite a bit especially in the early days, just being confused about the business. This is my first company. It’s so deceiving for several reasons. 

First of all, Boot.dev is not like some of the other platforms that are essentially, videos where it’s really just a content play. You could put it up on any CMS and have a product. It’s a very interactive, kind of gamified environment. 

In my head I’m telling myself, “This is a different thing. This is not just content creation. This is like we’re building a product.” So, that was mistake number one, because exactly as you pointed out, what matters is the job to be done for the customer. Because the job to be done is training, then you fall into that industry. 

Having a different product is fantastic from a branding, finding a niche perspective, but the business model is fundamentally locked into the industry, or whatever the customer’s trying to get out of it  

Rob Walling:
Training.  

Lane Wagner:
Yeah.  

Rob Walling:
Yeah. That’s a good, solid realization to have because then you realize the pros and cons of a training business versus trying to compare yourself to SaaS benchmarks, for example, which just aren’t going to make that much sense. 

I was impressed because right before we got on the call, it says, “Try your first course for free,” and I clicked and I expected it to be a video teaching me to do something, like Udemy, and it’s not. It’s fully interactive software that’s in the browser, and there’s a Python interpreter that, and the code appears, and you submit it, and you click on it. 

I was like, “Oh, this is pretty well-done.” This is not something that someone could replicate in a week because there’s code behind this. I say that because I know that there are a lot of courses out there to learn programming, backend, frontend whatever, but you’ve built something here that feels pretty unique, at least well, certainly for Python and Go, I think. Are you the only way to learn these on the internet in this fashion?  

Lane Wagner:
Most learning platforms, not only as we mentioned, are video-based, but another thing, is a lot of online learning in the programming space is based on the frontend. So, we’re going to get you started on the frontend, and if you want to learn backend, you can go watch a video, or maybe you can go get a CS degree. 

For whatever reason, it’s so undercatered to, and this really blew me away. It goes back to the origins of the company in the first place. I was a hiring manager. I managed a team of Go developers. Whenever I opened up a new job position, I’d get 10 applicants. My colleague who ran the frontend side of the stack for the same company, he’d open up a job application and get 150 bootcamp grads, or people who’d been through online learning platforms for the frontend side of the stack. 

I’m like, “What is going on? Only half of the backend developers on my team had CS degrees. It’s not like we required credentials.” I think there’s an argument to be made that learning the backend side of the stack takes a little bit longer, maybe 10 or 20% longer than the frontend side. It’s got a couple of more moving parts, but it’s not significant. Just no one was doing it, so we jumped on it. 

I’m glad we did when we did because I needed a full 18 months of absolute floundering in order to finally start to figure out how to get traction.  

Rob Walling:
Sometimes that’s how it goes. I mean, let’s talk a little bit about that, your origin story. You were writing technical blogs that developers were starting to read, and you were getting traffic. Then, what was the impetus to be like, “Well, devs are reading this. I want to teach them something”?  

Lane Wagner:
Yeah, so I’ve always been really into teaching. I was a tutor in college. Just really enjoy … My wife says I really like mansplaining things, and there’s definitely truth to that. There’s some founder fit in this company already. But no, early on it was blogs. Yeah, I was blogging on Medium, I was blogging on this other domain that we used to have, Qvault.io, and it had nothing to do with courses. It was whatever was interesting to me at the time, whatever I’m learning about in the programming space, which of course was all backend-oriented because I was a backend developer. 

Then it was really when I was this hiring manager, right? Hiring people, realizing how hard it was to find good backend developers. It was particularly tricky back in 2020 when the market was really good for developers. I was like, “We need to be training people on this stuff. I don’t know why we’re only training people on HTML, CSS, and JavaScript.”  

Rob Walling:
That drives me nuts. So, folks here know that I once wrote code, and I consider … Back in my day, you did all of it, right? HTML, and you did some CSS, and you did JavaScript with no … It was before jQuery. I eventually used jQuery, but there weren’t all the frameworks for the frontend, but the bulk of my code was always backend. So, I would consider myself, if anything, a backend developer. So, it’s shocking to me that, I guess this shows my narrow lens of it, that all the sites cater to frontend. 

I mean, I say this with full disclosure through TinySeed, I’m invested in Frontend Mentor, which is a frontend development education, you know? So, I’m not against them at all, or learning frontend dev or whatever, but it just seems so weird to me that there would be this bias towards it. 

Is it seen as a simpler, “Oh, it’s easier to learn,” or, “It’s just easier to get more jobs in it,” or is there just “No …” Because there’s more jobs on backend, right?  

Lane Wagner:
Yeah. According to the last Stack Overflow survey, there’s twice as many self-identified backend developers as frontend developers, which gives you a demand. I mean, there’s a supply and a demand aspect to that, but that’s just that number. 

I think there’s a few things that go into it. I think the online learning world is, it’s hard to build Boot.dev, let me put it that way. It is hard to teach backend development interactively in a browser. It’s not as hard to do with the frontend because JavaScript, CSS and HTML all render in a browser, natively. Right? 

So, to build this interactive experience in a browser for backend developers is, there’s a lot more engineering work that you have to put in upfront, but I’m a big fan of, I don’t know if you’ve read Seth Godin’s Purple Cow book. I think in the long run, that’s actually a really good thing for us, because to replicate it. It’s a moat. Right? It’s something that sets us apart.  

Rob Walling:
Right. Usually, the things that are hard to do, if you grind through them and you slept through them, you get to the other side, A, you’re glad you didn’t know how hard it was going to be when you started because you never would’ve done it. But then you get to the other side and you’re like, “No one’s following me through that shit pile.” 

It’s like, “I’m going to be alone over here for a while,” and that’s a good thing. So, about just over a year ago, it was about 14, 15 months, Boot.dev was doing 6,000 a month, and you quit your day job. Obviously, you’ve had really nice growth since then, but what gave you the confidence to leave? You were an engineering lead, so I’m going to assume you were making pretty good money, or an engineering manager, right? You were actually managing people. What gave you the confidence to leave when you only had 6K of MRR?  

Lane Wagner:
So, let me go back six months before I quit my job. The year before that, Boot.dev had essentially been around for a year. We were under a different domain name at the time, and we’d had no growth. I felt like I’d been grinding just as hard then as I am now, just really trying to get this thing off the ground. 

Getting to $1,000 in revenue for a given month felt impossible, so hard to get traction. That six months leading up to when I eventually, actually quit my job, there were a few things that I feel like, we actually, kind of figured out. One was rebranding, one was niching down. 

Originally, I was just like, “I’m just going to teach Go. I know Go development. I’m just going to teach Go.” That niche was not strong enough. It wasn’t unique enough or distinct enough. There’s Go programming books. So, we started to figure out some things and we started to get traction. 

So, that was really what gave me the confidence even at just $6,000 in revenue to be like, “All right, I’m out of here,” because yeah, I was making almost 200K, or right around 200K in total compensation at the time.  

Rob Walling:
You also raised some funding, which I was really intrigued to hear because when I think about starting a site like this or a tool like this, in my head I’m like, “Oh, this is totally bootstrappable.”  

Lane Wagner:
Yeah.  

Rob Walling:
You know what I mean? This is something that you really could. Now I know there’s a software component to it that, as you’ve said, it took a lot of time to build, and it takes time to continue to expand, but I was a little surprised by the fact that you raised … Is it public, $330,000?  

Lane Wagner:
Yeah.  

Rob Walling:
Is that a public number? Yeah. $330,000 in August of ’22, around the same time you left your job. Why did you decide to do that rather than bootstrap it?  

Lane Wagner:
Yeah. So, I would say I’m 50-50 on the scale of risk-adverse to risk-taker. I’m probably not quite as much of a risk-taker as most entrepreneurs, but I definitely have some of that in me. My wife is extremely conservative, very, very conservative. So, the idea of me quitting right as we’re about to have our second baby and not be able to take paternity leave, paid paternity leave made her quite nervous. 

So, raising some cash and being able to take a salary, even though of course it was a much smaller salary without all the medical benefits and everything, definitely just gave us so much peace of mind. So, hindsight being what it is, there really was no reason to raise money. We’ve been profitable this entire year. We have more money in the bank now than what we raised, but at the time just knowing the information I knew. 

I had projected, I was like, “It would be really great, if by,” what’s the date, “November of 2023, we have it a month where we make $30,000.” That was the goal, and here we are at 110, but that’s what I was planning for.  

Rob Walling:
You never could plan that you were going to grow like this. So, it’s that whole thing of, just because the decision didn’t pan out the way you thought it would, doesn’t mean it was the wrong decision at the time. Right? You made the best decision you could with the information.  

Lane Wagner:
Yeah.  

Rob Walling:
So, when you think about a long-term play here, you have investors. Investors, typically want to return at some point. Usually, that’s an exit. There are some exceptions, like the TinySeed terms and SparkToro, where you can pull out dividends because you’re structured in a way that, that makes sense, and you pay investors dividends over time. 

Again, I have one or two angel investments of my own out of 20 that do that too, as well, that actually pay dividends. Well, I guess at SparkToro, I’m an investor in and then there’s two others, but the usual one is to have an exit, right? I need to sell within five to 10 years or whatever it is. 

Also, founders get bored and decide they want to sell eventually, but you’re still early. I mean, you’re really … I know you’re three years into it, but really you’re full-time free just over a year. So, I don’t expect you to be thinking about what’s going to happen 10 years from now, but does that cross your mind of, “How do I pay investors back? What’s the future hold for me?”  

Lane Wagner:
Yeah, absolutely. When I raised with the investors, first of all, these investors are awesome. I actually knew them from before, which is why I only pitched one investor. I raised from that investor, and that’s all the raising we’ve done. I don’t think we’re going to raise any more. 

The conversation, originally was like, “Hey, I have this platform. We seem to have found the traction thing, and I have different ideas for some growth levers we can pull. I think they’ll work, but I want to quit and go full-time on this. I’ve been doing it 15 hours a week,” or whatever. “I don’t know if we’ll sell this company.” 

That was the conversation I had to have with the investors. “I don’t know if this is a thing that we sell. I don’t know if this is a sellable thing. It’s not a SaaS application. It’s not a recurring revenue tool. It’s an education platform.” It certainly could have an exit. There’s no reason we can’t, but I just had to be super upfront with them. “Maybe we just do distributions.” Right? 

So, we raised a million-dollar valuation, so they bought a third of the business. We could just do distributions at that point.  

Rob Walling:
Right, because at typical valuations you get half a percent, 1%, 2% of a company, and then it’s like, “Great, for every $100,000 you pull out, I get $1,500.” It doesn’t make sense, but if the investors have that much, that does make it a little more palatable.  

Lane Wagner:
It also changes how you compensate employees. So, rather than just doing the standard, “We’re going to give employees options, and then maybe they have this big windfall when we go public,” I’ve had to be a little more conscientious. Right? 

So, we basically have a split program, where we do the options thing just in case we sell, but also, kind of a profit sharing plan on top of that just because we don’t know if we’re going to sell.  

Rob Walling:
Yeah, it’s nice to have that, to provide both options. I’d love to hear if there has ever been a moment in the life of Boot.dev, where you were really not enjoying it, like the worst lows, where you were either up at night or you were, “I want to throw in the towel. This sucks. Why did I become an entrepreneur? I should go back and be a full-time employee.”  

Lane Wagner:
2021 was an awful year. So, I wrote the first course and launched a very, very small MVP of the platform in 2020. I can’t even remember, exactly the month. It was right after COVID, so it was summer, spring of 2020, but it was a new fun project, no customers. I did all the classic things, had zero distribution channels. 

So, I just published this thing no one used and I thought it was, kind of fun. 2021, I was trying to get customers that entire year and we had, effectively no growth. There was a time, I remember it was early in 2021. I was like, “Can I just get rid of this thing? It’s causing me more mental … It’s more taxing on me mentally than it’s worth, and I can’t just put it down. It’s making 500 bucks a month,” or whatever. So, I can’t just kill it, but it’s destroying me mentally. 

So anyways, I went on Reddit and I was like, “Someone want to buy this thing? Does anyone want this?” The result of that conversation was actually that I found someone that was interested in helping me market it, and great person. They were super nice, super smart. They were in a different industry. We tried for all of 2021 to market this thing and we absolutely failed. 

We had no growth in 2021. It was terrible. So, I actually bought my section of the business back from him. He put in a bunch of sweat equity over the course of the year, and at the end of the year I just bought it back from him and I’m like, “I don’t know what to do.” So, we tried a few more things and it started to work. 

Beginning of 2022, we started actually seeing some growth getting up into the two, the three, the 5K monthly revenue numbers.  

Rob Walling:
What were you doing differently, because there are a bunch of people listening to this right now, who have a business doing 500 or 1,000, and it has been. They’re like, “I don’t know what to do.” 

Not that your solution will work for everyone, but I’m just curious if you can touch on … If you even know, because sometimes you don’t, but what did you start doing differently that got you from the plateau to actually a pretty good business?  

Lane Wagner:
There were three things that we all did in fairly rapid succession, so I actually can’t be sure exactly which one was the most impactful, but I will list all three that I’ve had time to reflect on. 

The first is that this guy that I was doing marketing with in 2021 was not an engineer, was not a developer. It is really hard to write good copy, to come up with good messaging for an audience that you don’t know very much about. 

So, one thing I’ve definitely learned over the last couple of years is thinking about hiring a marketer or thinking about using a contractor. Marketing, almost is not a specialty in and of itself. It’s like, you need to be good at marketing to this audience, or you need to be extremely familiar with what they want, what they need, what the content they consume online. You need to hang out where they hang out. Right? 

So, I just found that, that wasn’t working. That actually, at least in that moment, I could do a much better job just because I knew how to talk to these people. That was a big turning point. 

Rebranding the site was a big one. I read this book. I’ll probably reference it a couple of times because I really do think this was probably the biggest turning point for the company, was just reading this book called The Purple Cow by Seth Godin. 

It’s all about finding a unique niche, because this is a crowded market. There’s a lot of people teaching courses online in lots of industries, but especially programming. Programmers love to share their knowledge. So, you really have to figure out how to stand out. 

We did a bunch of stuff, visually, with the name, with focusing on the backend side of the stack that really allowed us to start getting more word of mouth marketing, because nobody wants to talk about another learn to code platform. No matter how good you think your courses are, you need something else that’s remarkable. Something else that someone will talk about. That was another big one.  

Rob Walling:
What’s the purple cow for Boot.dev? What is it, the thing that people talk about?  

Lane Wagner:
We have two, which might be antithetical to the thesis of the book, but I still think it’s correct for us. The first is the focus on the backend. Just no one else is doing this, which is frankly, kind of lucky. We, kind of stumbled into that. I just happened to be a backend developer, and everyone else is teaching HTML, CSS and JavaScript. So, that’s the big one. 

You could even sub-niche it and say, “Go is not the most popular backend programming language, but it’s the one that we focus on, primarily.” So again, we get a lot of attention in Go communities for that reason. It’s much, much easier to get traction in a small community than in a large one. It’s not even close, which is another thing that I really made a mistake of in the beginning. 

Qvault.io, back in the day was a very generic. I was just branding it as this, “Come, learn to code. We happen to have this course on Go and this course on Python,” or whatever, but the messaging was all extremely generic, because you like to tell yourself that this thing could be big, right? Anyone could use this thing. I think that’s such a huge trap.  

Rob Walling:
Was that both purple cows? You named the one of niching.  

Lane Wagner:
Oh, yeah. The other one is the gamification. This one’s more recent. I’ve always enjoyed e-learning that leans heavily into the admission that we are human, and that we like hits of dopamine, and that we have all these things, these very human things. We’re not mechanical when we learn, and there’s not a lot of learn to code websites that lean into that. 

So, just every month it feels like we’re leaning harder and harder into that messaging. I don’t know if you saw on the site, it feels like this fantasy game. Our mascot is this wizard bear, and everything we do is around unlocking achievements, and earning XP, and getting on the leaderboard. 

That’s all really good and is based in pretty well-known psychological principles about getting yourself to keep coming back and keep learning, but it’s also just super unique. Nobody else is doing it.  

Rob Walling:
Very nice. Yeah, I do. Of course, I’m a fantasy nerd myself, and so I like the visuals on the site. It seems like you’re catering pretty well. 

Before we wrap up, you had commented earlier about how you originally thought of Boot.dev as SaaS. It’s not really SaaS, it’s training. Also, before we hit record, I was asking you for MRR and you mentioned your gross revenue of 110, and I said, “Oh, what’s MRR?” You said, “Well, MRR’s 50K, but that’s not the right metric to look at for this business.” What did you mean by that?  

Lane Wagner:
Yeah, so Stripe shows us our monthly recurring revenue. Out of the box, Stripe defaults to SaaS metrics. For a long time, I really worried about that one. There’s a couple of reasons I don’t think it’s important, or as important for us. 

Again, this threw us off. We’ve been a subscription revenue company, and that really, to a new founder that doesn’t understand all these different business models, really confused me. I was comparing myself and my metrics to other SaaS companies, and that’s not the right way to think about it. 

So for example, our net revenue in, what was it? October of 2023, $110,000. Our recurring revenue, about $50,000. Our revenue that came in that, was recurring was $30,000. There’s a distinction, right? The actual money that came in the door, that rolled over from yearlies last year, and monthlies of the month before. This is not a tool, where people stick around forever if they like it. People drop out for all sorts of reasons. 

So, our churn is much higher than the traditional, what is it? One to 4% of a SaaS company.  

Rob Walling:
A healthy SaaS company. Yeah.  

Lane Wagner:
Of a healthy SaaS company, exactly. Yeah, what we are actually optimizing for is just lifetime value of a customer. Is our lifetime value of a customer in a healthy spot, and can we acquire customers at a price that’s lower than that? Ideally, much lower than that, and then you get better margins. Right? 

But every year, this is another interesting thing because you actually do have some advantages. This all sounds worse. This is just worse. This is worse than SaaS, but there are some nice things. Word of mouth is much higher in this industry than in other industries. 

So, if people really like your thing, they’re much more likely to share it than, I think is the baseline in, maybe SaaS tooling, B2B SaaS tooling specifically.  

Rob Walling:
For someone listening who’s trying to get their head around why you have $110,000 in revenue, but MRR is 50K and actual recurring revenue is 30K. We won’t go through all the math because on a podcast it would be terrible, but the idea is that when you sell annual plans, you can’t recognize, you shouldn’t recognize all that revenue in that month. 

Usually, let’s say for easy math, your annual plan, you have an annual plan for $348 a year and then you have a monthly membership for $49 a month. So, you sell a lot of annual plans because it’s almost half the price to just pay annually. Right?  

Lane Wagner:
It’s about a 50-50 split of about half our customers do annuals, half do monthlies, but of course there’s more revenue, immediately from the yearlies. Yeah.  

Rob Walling:
Right. So, you get a bunch of that cash upfront, which is great. It means you have money to market. It means just getting cash upfront is always good, but for someone who’s never thought about how … I’m going to do a simple math example of, if I sell an annual plan for $1,200, what I should do if I’m doing my accounting right, is divide 1,200 by 12 and recognize $100 of MRR per month for the next 12 months. 

So, that’s what you’re doing with your 348. That’s why the numbers are all different. It can be deceptive in either direction. If you do all annual plans, you get a ton of cash upfront, but your MRR seems really low.  

Lane Wagner:
Yeah, we think about it as, essentially we’re selling a product that’s being financed over an amount of time. Right? Because these dollar amounts are so low, we don’t actually have a contract for you to sign, and we’re doing loan terms, and interest. 

It’s more just like, you want to get access to this thing for six months. You’re financing the total cost of the course over the six months that you’re accessing it, which makes us think about it, again in terms of lifetime value of the customer, which is somewhere between $100 and $300. There’s averages in there. 

That third point about the revenue that I made way back when that, I’m sure everyone’s forgot about, was we do care about this number that is the actual dollar amount coming in every month.  

Rob Walling:
The cash coming?  

Lane Wagner:
Yeah, and it’s even lower at present because of our really fast growth that we’ve had recently, than the actual MRR. So, our SaaS MRR is for 50K. The actual cash coming in from recurring revenue every month is down into the 30K range. But that’s an important metric to just keep in mind because it’s like, if we do no marketing, if we bring in no new people this month, how much cash is coming in the door? So, keeping a tab on that is actually really important.  

Rob Walling:
Lane Wagner, thanks so much for joining me today. Folks want to keep up with you on Twitter. You are wagslane, that’s W-A-G-S L-A-N-E. Of course, Boot.dev if they want to see what you’re working on. Thanks, again for joining me.  

Lane Wagner:
Thanks for having me, Rob.  

Rob Walling:
Thanks, again to Lane for joining me on Startups For the Rest of Us. Thank you for listening this week and every week. This is Rob Walling signing off from Episode 688.

Rob Walling:
It’s Startups For the Rest of Us. I’m your host, Rob Walling, and this week is kind of a Hot Take Tuesday but to be honest my two guests were unable to make it. One got sick and the other one had a pretty gnarly schedule, and I have no flexibility later this week because I’m traveling and we have MicroConf Remote and I’m giving a talk, etc, etc. So you’ll notice more episodes than usual over the past month or two have been solo episodes, and that has been because of my schedule. I have very limited time in front of my computer these days and trying to schedule folks to actually record an episode, whether it’s an interview or a Hot Take Tuesday it just hasn’t worked out. So even though I had this on the calendar with two guests planned, here we are with me and several topics to talk through today. But rest assured, as my schedule calms down over the next few weeks we will settle back in to our normal Startups For the Rest of Us schedule 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 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, microconfconnect.com. So I want to cover a few topics today, one of which is more of a, Rob, solo adventure topic and the others are things from the news that I had put together for this episode of Hot Take Tuesday. The first topic ties into an episode of the podcast that went live a couple of weeks ago about things startup founders should never do, and I listed seven things in that episode. In between the time I recorded that episode and a couple of days ago, I realized there’s another one. 

And of course I think this will be a fun Startups For the Rest of Us drinking game over the course of the next year or two. That every time we all collectively as a community think of the next thing that folks should never do we can all take a sip of an adult beverage. But this one popped up during a conversation I was having with friend of the show, Ruben Gomez, and we were texting back and forth about different things. And I realized that an eighth thing that startup founders should never do is to take funding and then start side projects. And the reason for this is that three of the things that lead to your success as a founder are focus, focus and focus. I say it jokingly a bit, right? Obviously there’s a lot of other attributes of founders that make them successful and unsuccessful. But I do see a lack of focus as a major red flag with founders and in fact, when we’re interviewing founders for TinySeed. 

If we get a lot of pushback about asking them to say go full-time on their startup, or someone who we notice is all over the place doing the indie hacker dream where they have five or six different products. I would never invest in that person because they don’t have commitment to one idea or one company or one product to be able to push it forward in the way that it’s going to need to be to become a successful product. And I think of success these days as it’s a seven or eight or a nine figure ARR company, usually seven or eight figure. And trying to have a bunch of things going on, starting side projects that you’re investing quite a bit of time in and taking seriously and actually launching and working on it is this interesting drain of your creative energy. And I know some of you out there are hearing this and saying, “That actually makes me better at what I do. You know what? Once I’ve had one or two drinks I’m actually a better driver.” Which was the whole cliche what in the ’80s and ’90s. 

But seriously I get it, we all have entrepreneurial ADHD and I would love nothing more than to work on five or six different things. Because you know what? It allows me to always be stimulated, it allows me to feel creative and it allows me to spread my efforts across a bunch of stuff. But that’s precisely the negative impact that it has is I’m spreading my creative thoughts, my creative energy and my time and my attention across side projects and my main company. So there’s no reason that you can’t work on two, three, five, 10 things at once you should go do that, but what you shouldn’t do is take investment for one of those. Because any investor, especially venture capitalists and especially professional angels and especially accelerators will require that you do not continue working nights and weekends or maybe it’s during the day. Right? No one’s watching you, but that you continue to work on these side projects, launching these things, promoting these things. It’s a terrible signal. Now, you may find friends and family or you may find inexperienced angel investors who are willing to give you money. 

If you are playing Dungeons and Dragons on the side and you have a Dungeons and Dragons podcast or you run an event for startup founders most people don’t care. But it’s when you are essentially launching other products that are also software. Right? That are also SaaS. You can’t grow three SaaS companies at once, no one does this. Right? It’s an anti-pattern. You can grow one and then have a couple that are flailing around and so if people see you tweeting about one, two, three, four, five, different projects at once. It’s pretty obvious that you’re not giving any one of those the attention they deserve and so the solution, if you do want to work on multiple things or you want to be able to start side projects don’t take investment. Investment only works in certain situations and although I have my 1990 rule, which is I think about 1% of tech startups should consider raising venture. I think about 9% should consider raising what I call indie funding, which is TinySeed, Indie.vc, Upeka, and the other alt VC funds that you might hear about, and then 90% should probably bootstrap. 

And I think that if you want to do a bunch of products, and this comes from someone like myself who at one point had somewhere between nine and a dozen depending on how you count products, all generating revenue. But I didn’t raise money for those, and when I went to focus on HitTail I didn’t raise money for that either because I wanted it to be a lifestyle business. The only one that I would’ve considered raising money for was Drip and then frankly TinySeed, because I’m focused on those and committed to those and you might say, “Well, Rob, you work on TinySeed and MicroConf, and you have this podcast.” And that’s true, but if you look at them they’re all in the same ecosystem and it’s this virtuous cycle of all three of these things feeding into one another in a good way. Everything I do for MicroConf helps the podcast and vice versa. Everything I do with MicroConf helps TinySeed and vice versa. Each of these things feeds on each other and they’re all growing and supporting one another and I also have teams of people running these companies. 

If you think I’m in the nitty-gritty of every decision that’s being made at all the companies I work on you would be incorrect. Now, there’s a vision and a direction and high level guidance and advising that I’m giving. But if any of these were a SaaS company that I was trying to grow I would need to focus on it almost full-time. Now, I ran MicroConf and this podcast on the side. Mike, and I did this essentially as a hobby and it was a side project and when I went to sell Drip I actually got in a conversation with our acquirer and the CEO asked me, he said, “Are you going to keep doing these things on the side, the MicroConf and the podcast?” And I said, “I am. That’s been part of my personal brand, I actually think it’s beneficial for Drip and it’s something I think I will do for decades.” And he was okay with that. 

But what he wouldn’t have been okay with or I don’t think he should have been okay with is if I said I’m going to sell this to you, I’m going to come work for you for a year or two, and while I do that I’m going to launch a side project or four side projects. Because I get bored with stuff and because this one isn’t working and so I’m going to hop to the next one. I didn’t do that and it’s anti-pattern, it’s a bad signal and so it’s tough because as much as anyone I like starting new stuff, as much as anyone I have entrepreneurial ADHD I know that. But the founders that I see succeeding are the ones that focus on something for enough time to get it off the ground and to get it to escape velocity and that takes focus. So to recap, the eighth thing that startup founders shouldn’t do is to take funding and then start a bunch of side projects. 

My second topic of the day is more of a Hot Take Tuesday topic I was going to discuss with my other two co-hosts, but I have some thoughts on this and I’m pretty intrigued by it to be honest. This is an article from Slashdot, I know you haven’t heard that website in ages, have you? I haven’t read Slashdot well over a decade. I was never super into it, but I found it to be a pretty decent source of nerdy news stories that kind of relate to this podcast and that can be discussed on a Hot Take Tuesday episode. So the headline is, “Facebook and Instagram to offer subscriptions for no ads in Europe.” To comply with evolving EU regulations Meta says they’re introducing a new subscription option in the EU, EEA and Switzerland. It’s going to cost $10.50 cents a month if you buy on the web or $13.75 cents a month if you buy on iOS and Android. My take, I would pay for this in a heartbeat. I actually like the idea of having freemium and paid versions of all these systems. 

Because it allows someone like me who doesn’t want to see ads and who has the means to eliminate the ads and on YouTube, I have been paying for whatever YouTube Premium I think it’s called. I’ve been paying for that for years. For so long in fact that if I wind up on YouTube in an incognito browser I’m shocked and appalled at the pure volume of ads that are coming my way. I forget, I forget that YouTube has ads as crazy as that sounds. But you know what? My 17-year-old, my 13-year-old, they’re not going to pay this much and so they can still use the product and be ad supported and that’s what I like about this kind of thing. I don’t use Facebook at all, I deleted it from my phone about eight months ago and I only use Instagram for it’s to keep up with a few people in a niche hobby that I’m in. But my hope is that Meta looks to roll this out worldwide. 

I don’t know that they will unless the US requires it because this is EU regulations that are essentially requiring them to do this and given that Meta is in the ads business. Right? That’s where they make their money. I don’t know that they want to cap their upside by having a subscription that they then have to increase the price of every year and take a bunch of flack like all the streaming providers do. So it remains to be seen if this will come to the US, but any of these systems that want to do this why not give us the option? And if you do this they won’t use your information for ads because they’re not serving you ads. And I like that even more to be able to pay for that privilege while again having the option for folks who can’t afford it to still be able to use the free version. So I’m envious of you, EU, EEA and Switzerland, I hope you take advantage of this once it’s available. 

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? Meet Lemon.io. They only offer handpicked developers with three or more years of experience and strong proven portfolios. With Lemon.io, you can have an engineer start working on your project within a week instead of months. Plus, you won’t waste your time on candidates who aren’t qualified. Lemon.io gives you easy access to global talent without scouring countless job boards, and it’s more affordable than hiring local talent and if anything goes wrong Lemon.io offers swift replacements. So it’s kind of like hiring with a warranty. If you need to grow your engineering team or delegate some work, give Lemon.io a try. Learn more by visiting lemon.io/startups and find your perfect developer or tech team in 48 hours or less. 

As a bonus for our podcast listeners get a 15% discount on your first four weeks of working with a developer. Stop burning money, hire devs smarter, visit lemon.io/startups. My next topic is a thread from Hacker News. Don’t read the comments, but we will link it up in the show notes. No, actually it’s so funny to look at Hacker News threads and to see the first comment or the comment that’s all the way to the left as you scroll down. Right? So it’s the ones that are the main comments responding to the original poster. Those comments for the most part are pretty intelligent, well-thought-out and helpful. Now, the further you scroll down they’re not. But what happens is you get someone post an intelligent comment and then it instantly devolves into this pissing contest and this argument between people who it’s pretty obvious like you have no idea what you’re talking about. Or wow, dude, you are way too opinionated about something that no one else cares about and/or pedantic trying to correct a word someone wrote. 

And they write a 500 word response and you disagree with a single word of their response because that’s totally worth talking about. So anyways, it never ceases to amaze me both the value you can get from Hacker News and also what a mistake it can be to actually read into the comments. But this thread is an Ask HN where the OP says in, Paul Graham’s, essay he talks about manually doing what you later plan to automate. So this is the essay do things that don’t scale, and in the essay PG gives the example of Stripe manually onboarding startups. Does anyone else have other examples? And I really like this thought process. What’s funny is manually onboarding startups like Stripe did was considered, it was like, whoa, you can do that? No one does that. And that was what, 2012, 13, 14? It was in that range. Nowadays, anyone who’s starting out I would say manually onboard your first 20 customers. 

Don’t write any code, figure out what the hiccups are, figure out how long it takes them to get onboarded and to get value and that will inform the duration of your trial and even run billing manually for a while. One of the first things that we did when we were getting Drip off the ground, was not write any billing code. There was no subscription code, I believe we could accept their credit card through a form… No, actually we didn’t even have that. We would manually create an account, and this is for maybe the first 20 or 30 trial users really most became customers. We’d manually create an account, Derek, would do this in the console, into the database directly. So then they would have a login, they could reset their password and they could log in and they could use it and there was no billing page. There was nowhere to enter a credit card and I was manually working with folks mostly via email. 

I think I did a little bit of a Skyping, because this was pre-Zoom, so we would literally jump on Skype to show you how long ago it was. And I would just tell them, “Look, don’t pay anything before we get value and if you never get value just don’t pay anything. But I’m going to check in with you every week or two and let’s figure out how to get this installed and how to get you using this and whether or not it’s more valuable to you than the current tool you are using.” And I learned a ton about this. I learned that from the time you installed the code, it was about 14 days until you maybe had enough subscribers that it kind of made sense that Drip was valuable for you and we had folks in the system that would eventually say, “All right, I feel like I’m getting value. I want to start paying you.” And I had told them it’s going to be $49 a month. 

And so what I was going to do was go directly into Stripe to log into stripe.com and I was going to take their credit card and type it in. But, Derek, said, “No, let’s get a page up and let’s get a page in the app so they can enter it. It’s all secure, you don’t have to get on a phone call with them and it’ll make sure everything’s synced between our database and Stripe.” And so in an hour or two he hacked something together that allowed them to enter their credit card, post it to Stripe to get the customer token and now we could bill them. The thing was we didn’t have any code written to bill people and that was okay, and we ran like this for months and I would set a calendar reminder in Google Calendar that after 30 days or a month I would go in and I remember billing, Brennan Dunn, manually. And I remember billing several other early customers going into Stripe and literally clicking a button that said charge this much and that doesn’t scale. 

And that sounds a little crazy, but it saved us hours of development that we were pushing towards other things, features that actually made a difference to our customers. And eventually of course, Derek, created a little billing engine and we put a rig task into the system. A Cron job for those who aren’t familiar with Ruby and Rails and set it to run every night, check if anybody needed to get billed. We did all that eventually. But I mean building that takes time, right? It takes how many to QA it and to write the unit tests and to make sure it runs because man, you don’t want to screw up billing. That took time and we pushed that off as far as we can. It was literally months and months and we had I would say 20 people using the app willing to pay for it before we cranked up the subscription engine. Another thing we did, this is less about things that don’t scale but this is top of mind for me. 

Because I did a call about a month or two ago, someone backed the SaaS Playbook Kickstarter and they backed it at the level where they could do a one-on-one conversation with me. I don’t do consulting, but I made just a handful of spots available where people could pay it was either 800 or $1000 and they could talk to me for 45 minutes and those all sold out. It was great. But someone had the question of what can I leave out of the app? When people talk about an MVP, what does it really need to do and what can I leave out? And one example I gave her was in Drip, which was an email service provider. Think of it like a competitor to MailChimp, it’s a little different but you get the idea. You can create emails, you can send them to people and you can send sequences and there’s some automations. We had no delete buttons anywhere, so you could create a broadcast email, a one time broadcast, you could send that or it would be a draft. 

But if you decided that you wanted to delete it, we had to literally go into the console and delete it out of the database directly. There was nothing in the user interface to delete anything. In fact, there was no searching anywhere. So if you’d had 100 or 200 broadcasts at the time that you wanted to search through, you couldn’t and it actually took us a year or two to get to adding search. But in the early days, no one had 200 of those. So they didn’t need a way to sort or search or really even delete. For the most part, people would just rename it and use it next week if they had mistyped something or if they’d created a broadcast they didn’t want to use. We got shockingly little pushback about this. As developers who have worked on complete systems that are mature five, 10, 15 years in this piece of code or this application does all this stuff. 

You can’t imagine not writing sort and search and delete buttons and reorder and all the basic functionality of what you might think of something in a table layout, but you don’t need much of that. You need almost none of it, you need to display it and you need to allow them to do what is the minimum viable action for that screen. It’s to create a new thing and it’s to edit that new thing and in this case it’s an email, so it’s to send that new thing. But that was it, everything else we pushed off as long as we could and sometimes we did get some pushback. I can’t believe… Put in quotes, “I cannot believe that you don’t have any delete buttons.” And I’d respond with, “Yeah, I appreciate that. And if you want us to delete something send us the name of it or whatever and we’ll delete it for you.” But honestly, we are so busy providing value to our customers at this point and there are more valuable things to be building than delete buttons. 

To wrap up this topic, as I read this in this Hacker News thread the number one response to doing things that don’t scale is actually super interesting. So the comment is from one of the co-founders of Lugg, which is lugg.com and Lugg’s H1 is move anything with the push of a button. So it’s about actually moving furniture and such and one of the co-founders posted and they said, “At Lugg we did a few things that would not scale. Number one, my co-founder and I did all the lugs ourselves in trucks we rented through Getaround for the first four months. My co-founder and I’s names, pictures and phone numbers were hard coded into the app as the crew to fulfill the lug before we had crews or proper dispatching.” And this is Rob cutting and see if you’re going to do a two-sided marketplace, this is it. They were one side of the marketplace and it must’ve been incredibly local. I don’t know where they lived, but then… Oh, they’re in the Bay Area, it looks like the next one they talk about being in Emeryville. 

So they lived in a city big enough where there was enough demand because if you lived in a tiny little town this wouldn’t work. But living in a big enough city and then being willing to grind it out like these guys did, it’s pretty impressive. The third bullet is, “We launched without payments and would charge customers with a square reader at the door.” That’s amazing. Fourth one, “Most mornings we would camp out in the IKEA parking lot in Emeryville, California.” That’s in the East Bay, “And approach customers that were struggling to get their purchases in their cars and we pitched them that we would deliver their items if they downloaded the app and made a request. In the early days, we didn’t have operating hours and anyone could request a lug at any time and my co-founder and I would hop in our rented truck and do it. A few months in we did a lug for someone that knew, Sam Altman, and made an intro for us. 

We met him for coffee shortly after had a YC interview and we were later accepted in the spring of 15 batch.” So that’s eight years ago. This is not something that I would personally do, it doesn’t sound fun. But talk about grinding and doing what it takes to get the job done, right? And if you’re going to do a two-sided marketplace, as I said this is how you do it. But also none of that scales, but all they were doing was just trying to prove things out and just trying to learn and if you think about that that’s what doing things that don’t scale is about. And there are a lot of companies that apply to TinySeed that we talk to and some that get in that are doing the human automation man or woman behind the curtain just pedaling like a duck under the water like crazy to get the service done just to prove that there’s a need. 

Because if you prove there’s a need and you prove that you can sell it and you prove that people are willing to pay for it, fulfilling the service and automating that, writing it in code is often not the hard part. It’s usually not the hard part. The hard part is just figuring out what is it that people want? How do I build something that people want? How do I offer something that people want and are willing to pay for? And however, you can validate that obviously assuming you’re doing it ethically and you’re doing it in a way that allows you to learn. I’m all for doing things that don’t scale in the early days and that’s going to wrap us up for this week’s episode. Thanks for joining me this week, I know it was kind of a mashup of multiple episode types and it’s one of these weeks where the show has to go on. I wanted to get an episode out to you. 

I hope it was valuable to you to hear the insights I had to share on these topics and as always, I’ll be back again next week with another episode. This is, Rob Walling, signing off from episode 687.

Rob Walling:
I remember being stressed in the early days, early, early days of Drip, that we aren’t moving fast enough, right? But I knew Derek was a baller developer, but I knew he also wrote really maintainable, high quality, scalable code. And so if it took an extra few days or an extra few weeks on a larger project to ship something, I was willing to live with that because I wanted long-term to have a code base in a company that would scale. Unlike some companies that we see where you get this non-technical founder who hires a Dev or has kind of a minority technical co-founder, and they drive them and push them to write code faster and faster and faster. And the code is, and then they get to a million, 3 million, 5 million in ARR and they stop. They lock up. You can’t build features because nothing is maintainable. You can’t add new things because you break old things. There’s no unit tests, there’s just low quality code. 

Welcome to another episode of Startups for the Rest of Us, I’m Rob Walling, and today I answer listener questions. Some text questions from all the way back in January of this year, so it is at 10 months and I sprinkle in some video questions as well. 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 a 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. 

Before we dive into that. Tickets for MicroConf Local in Austin, November 14th of this year are on sale and they are going fast. If you are a Bootstrap SaaS founder in the Austin area, you don’t want to miss out. The location is the WP Engine HQ and the guest of honor is Bernard Wang, the co-founder of Clear Scope. We’re also going to have founder by founder, which is an amazing source of networking and building new relationships. You can head to MicroConf.com/locals to get your ticket today. Tickets are only $50, so if you’re in the area, it is 100% worth your time to check out this event. Our very own Tracy Osborne, whom you’ve heard on the show, will be MCing the event and doing a fireside chat with Bernard. It’s just a couple hours in the afternoon of November 14th from 3:00 – 6:00 PM. With some conversation, some meeting of other founders in your area, and a nice happy hour at the WP engine headquarters. Microcomp.com/locals to grab your ticket. 

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 my first listener question. The person who wrote in asked to be kept anonymous and he and I, it looks like have a long email chain starting back in 2020. But in this email, which came in January of 2023, so about 10 months ago, he says, “Rob, I like to imagine if I had a podcast that reached thousands upon thousands of entrepreneurs, I’d want to know if I was impacting them. While I’m quite certain you already know this, we’ve been exchanging a couple emails every year for the last three-ish years, and whenever I have a question I want to send to the pod, I like giving you an update. Last we spoke, I had launched a new product with zero MRR that’s now $5,200 of MRR and my original product is at $3,000 of MRR. This doesn’t include one time sales. With all of this, I crossed more than a quarter million dollars in revenue for 2022”. 

So that’s a great update. That’s why I want to keep him anonymous is because he’s giving me real revenue numbers. But it’s so cool to hear about listeners growing their business and using the tactics and the motivation that come from this podcast to do it. So now let’s dive into his question. “My question for you is, with the economy starting to tighten up, I feel myself not only tightening up too, but wanting to get as much cash as I possibly can. What I mean is that five years ago making $300,000 seems so out of touch, but now that I’m here, I want more and I feel bad for it”. This is Rob jumping in. This is called hedonic adaptation and it’s that we adapt to the amazing luxuries that we earn over our lives and those just become necessities at a certain point. Back to the email, “in my head, I’m blaming the economy because I think I might need the money, but it also just feels like greed as a one man show, $250,000 to $300,000 a year is more than I need, but as I make more money, I want more things. Maybe there’s nothing wrong with that, but it feels wrong. Have you gone through something similar? When is it enough? Thanks, Rob, from someone that has followed the stair step approach. It’s been a long but very rewarding journey”. 

Yet another person who’s embraced the stair-step approach to what amounts to pretty amazing success. So this is an interesting question and obviously a philosophical one. What’s interesting is that at a certain point around 2009 or ’10, so it was a long time ago, that’s when I was making about $120 to $150,000 a year and I was working like 10 hours a week. And enough was enough. I didn’t feel like I needed more money because it paid our bills, it made the house payment, and I loved the relaxed pace of life that I could maintain. And then we had our second son. I was able to hang out with him hours and hours a week and we would walk around town or I would walk around town with him strapped in a baby Bjorn and really just enjoyed that time. For me eventually I got bored and wanted to start something bigger, and that’s when I bought HitTail. But it was also, there was an incredible 18 months where I launched the Micropreneur Academy, which is kind of a precursor to MicroConf Connect. 

I wrote, Start Small, Stay Small. Started Startups for the Rest of Us, and we started MicroConf. All four of those things happened within 18 months. So it was an incredibly fruitful period in my career, and the reason I was able to do that is because I wasn’t working full-time anymore and all of a sudden I had all this time each week to just tool around and be creative and launch things. So for me, the motivation to up my entrepreneurial game or do the next thing wasn’t about money. It was about ambition and boredom and challenge and learning and creativity. I wanted to do something new that really challenged me. Now, at the same time, my wife and I had a couple conversations where I asked her specifically, I said, “what would we do with more money?” And I think I talked about this in the SaaS playbook or I’ve talked about it on this show before, but she sat down and was like, “if we had an extra couple thousand dollars a month, we would get an apartment on the coast”. 

And not only would that change our quality of life, because we didn’t love living in Fresno, California. It’s not necessarily our soulmate city, but living on the coast was something that we wanted to do. And so just having more money gives you more options basically. And she said, “we could be generous with that apartment and we could be more generous with our money and we could go see family more”. And she came up with all these things that weren’t just luxuries and they weren’t frivolous. They were things that really made sense. And suddenly I was like, “you know what? I don’t need to be a millionaire, but if I made another $1,000, $2000, $3,000 a month, I became motivated that we could do good with that money. And whether that good meant improving our own lives and the quality of those and enjoying those days more, being able to spend more time with your kids or sometimes maybe it’s less time with your kids and hiring someone to be with them so you can stay sane or whether it’s to help other people to give back however you see it. 

Money did become a motivator for me. But not to my detriment, it was actually a positive thing. And that was where I bought hitTail, I grew it and by the time I sold it all the revenue I made from HitTail as well as the sale price was a million dollars. And I had never, you’ve heard my story, a construction worker whose dad was an electrician. I just never encountered that type of money, and that was a shift in my life where I realized, “oh, money does make things easier and money gives you options”. Money gives you options to where if bad things happen, if your car gets hit-and-run, if your car breaks down, if a landlord screws you and keeps your security deposit, if someone steals something from you, any of these losses, all of which I’ve encountered, used to be a huge deal. Catastrophic, right? 

I don’t have these thousands of dollars to repair my car. Having more money made me more relaxed in life. And so that’s the way I think about it these days. And I actually gave a MicroConf talk called 11 Years to Overnight Success and it’s on YouTube and in it I talk about how I was seeking freedom through entrepreneurship. That’s really what I wanted was to own all of my time. And once I achieved freedom, I realized how tenuous it was because I often say I was the original indie hacker. I had nine different websites, applications, eBooks, and each of them made between $1,000 and $5,000 a month. But at any given time, some of them would get smacked by Google and I would lose interest in one or it would just, but bad things would happen. A competitor would come and suddenly I didn’t rank for the terms I needed to rank for and it made me realize that my freedom was tenuous and I had this nightmare of having to go back to consulting and salaried work and I really didn’t want to do it. 

So for me, then I said, “all right, I want to make a little more money, but I really want to lock this in”. And so I built HitTail. It was doing 20 to, it was about $30,000 a month actually at its peak, but then it had major platformers because it relied on Google and it would just get beat up about every year because it was pulling from an undocumented API. I just felt like at any given time, the rug could be pulled out from under me. And that was a huge source of income and revenue and again, I thought, I don’t want to have to go back to consulting. So that’s why when Drip started taking off, I was like, “this is amazing. I’m making more money than I ever could have imagined”, but I still felt like the rug could be pulled out. 

There was still platform risk with sending a lot of emails when our IPs got banned and we had customers threatening to leave. I remember thinking at some point, I do want enough money in the bank that it just doesn’t matter. And some people call it fuck you money, I call it sunset money. It’s enough money to be able to just ride off into the sunset. And that at a certain point became the goal as we started talking about selling Drip. So all that said, that’s how I think about money and the moment that the drip sale happened and the money went into the bank account, I do remember a feeling of existential contentment in a way that wasn’t about, ‘oh my God, I’m going to go buy Lamborghini. I’m going to buy a huge house’. It was, “wow, we never have to work again”. And that was quite a realization. And it’s a calm, a deep, deep inner calm that has stayed with me since then, and that was seven years ago now. 

And so I’ll be honest, that’s how I think about money. I don’t think these days I need more, more, more. I do realize that while we are obviously well off, I see friends of mine, I have friends of mine who fly private. I have friends of mine who fly first class everywhere they go. I have friends of mine who spend a lot of money on things that I think would be foolish for sharing how to spend money on at our level of affluence. So I do sometimes noodle on, I don’t need those things, but I do see the advantages of continuing to grow our net worth. If for no other reason, then to be able to ensure the future of our kids and to be generous. We’re pretty generous people in general and we give away a lot in terms of time and money. So that’s how I think about it. 

So I think some people would say, yes, your desire for money, coming back to that person who emailed, that your desire for money is wrong. I don’t necessarily agree with that. I think if your drive for money causes you to mistreat other human beings or to ignore your family or to burn your relationships, I think you’re making a very bad choice. But if you’re not doing that and if you have a healthy desire for something, each of us is motivated by different things. In fact, Sherry did a really good talk at MicroConf Europe about micro and macro motivations, and she and I had a long conversation and came up with, I think it was seven different archetypes, motivational archetypes. And for example, one of them was a list checker who likes to have a list and check things off. And then there was the time traveler who lives in the future, and that’s more of what I do. 

Then there was, I forget what this one was, but it was like the moneymaker. It was someone who’s motivated by money. Then there was the people person, which is they start companies because they love people and building the team and building the company serves that need in them. So I think you might want to give some thought to that. Is this a healthy motivation? I don’t think wanting to make more money, if you were doing it from a place of challenge and motivation and you do feel like you’ll put that money to good use or invest in the stock market and be more generous or not, you buy something with it. If it’s a healthy motivation, I have a tough time telling someone that they’re “wrong” to desire this. If you find it being unhealthy though, right? If it’s really grinding on you, if it’s really stressing you out, if it’s burning relationships, if you find that you’re making bad decisions because of it, that’s a problem. 

And that’s where personally I would tell you what I would do if I had those feelings and those thoughts, I would talk to a therapist or a friend or an advisor or whatever. But for me, I’ve had different therapists over the years and that’s something that I would dig into. Therapy is just a conversation, right? You’re just talking through with someone who knows how humans work and has some thoughts and ideas about how you can get better at thinking. And so I would be working through that with an unbiased third party in essence. So thanks for that question. Frankly, it was a longer answer than I thought I would have, but it turns out when you think about money and motivation, there’s a lot more to it than you might expect. Next question is sales funnel focused and it is a video question.  

Speaker 2:
Hi Rob. This is Zalia from France. I read in your playbook that most of the time in your sales funnel you put the fact to ask the email of a potential customer before actually performing a demo, and I was wondering if there is a specific reason for that. Because in my case, I was trying to lead first my potential customer or people interested to a YouTube video in which I present my product and I also performing a demo and only in the comment section of this video to put a link in which potential and interested people can send me their email. So what do you think about this? Is it a fine way to do or is there a reason to do another way? Thanks a lot.  

Rob Walling:
Yeah, so this is a good question. So there’s a couple schools of thought here, right? In my book, what I talked about was if someone comes along to request a demo, I want to route them to the appropriate demo based on how much they’re going to be able to pay me or how much they will be paying me. I’m not going to do a demo for someone paying me $49 a month unless it’s really early on in the app, and I’m trying to learn. If someone is going to pay me, let’s say $250 or $500 a month, and I’m willing to do a one call close at that point. And so that’s what I was talking about in the SaaS playbook where someone enters how many email subscribers they had, because this was for Drip, and that would instantly tell me how much that they were likely to pay me if they migrated to Drip. 

And if they were going to pay me a lot of money, then they went straight to our Calendly, which these days would be a SavvyCal link and they could get on our calendar for a demo. But if they were only going to pay us $49 or $99 a month, they were instantly routed to a video demo. We did not gate that with an email form. We didn’t force someone to give us their email address in order to watch the video demo. And I will say, you mentioned putting it on YouTube. I hate YouTube for this purpose. I love YouTube for marketing. I hate YouTube for internal company stuff like this because YouTube, the interface is so cluttered. There’s all these suggested videos, there’s distractions and there’s ads. So I would look at a platform like Vimeo, which is inexpensive. Or Wistia, which is designed for this type of thing, but it’s more expensive. Or any, I mean, there’s Sprout video, there’s a bunch of platforms like this that allow you to self-host and not have to deal with the crappy interface of YouTube. 

That was a side comment. But in a perfect world, yes, you would absolutely get the email address of prospects before a demo, during a demo because then you can stay in touch with them. The idea is once someone books a demo, you should have their email because they get a calendar invite. Before they watch a video demo, it’s kind of up to you. I never wanted to put friction in front of watching a sales demo, essentially a 9-minute or a 10-minute commercial for our product. I kind of wanted whoever wanted to watch that to watch it, and we would embed the video demo on the page and then we had calls to action on that page to sign up for a trial. Your approach of putting them in a YouTube video and then in the comments section to put a link where people can send you their email sounds convoluted. 

I’ve never heard of anyone doing it. It sounds like kind of a lot to ask someone to do. I would either hack together a quick page, whether it’s in your CMS or your marketing website or whatever, and just embed a video and then you can have an opt-in form there, or you can have a signup for a trial. Whatever your call to action is for the video demo, that’s what I’d be looking to guide them to as a next step. So thanks for the question, Xavier. I hope that was helpful. 

The next question is from Tamon and they ask, “Hey Rob, I’m writing to ask you a question that I think you might have insight into. I’ve co-founded a company with my friend. We’re both developers and we’ve built paid apps for Slack. We’ve got some early traction, but we can’t seem to get past $4,000 MRR. We’ve tried many marketing things, but none really worked. After four years”. Yeah, it’s a long time. “We kind of want to give up. We know how to build products, we don’t know how to sell them. Do you think it is in any way possible to outsource marketing / sales? Everyone’s saying development can be outsourced”, which it can be “and that you don’t need to know how to code to build a startup, but does it work the other way too? I’m glad to hear your thoughts”. So kind of, not really in this early stage would’ve a very, very difficult time advising you to outsource marketing sales. Founders need to learn marketing or sales depending on if their tool is one that’s going to be sold via marketing or via sales almost without exception. In fact, when I look at the fastest growing companies in TinySeed, if I were to take out of 131 investments and we’re about to do another, I don’t know 20 or 25, so I have to update my numbers, it’ll be north of 150 soon. 

But all that said, if I were to take the top 10 say fastest growing TinySeed companies, without exception all 10 of those, the founders either head up the marketing or sales or they learned enough to get them to the point where they could hire someone really good and they had one or two or three proven marketing approaches by that time that were working reasonably well. Such that a new hire didn’t have to do that founder level thinking of which marketing purchase should we try. And if nothing’s working now, how do you expect to hire someone to figure that out when they’re not a founder? I really don’t think this is a viable option in most cases. In all honesty, what you’ve built sounds like an amazing step one business, stair step method. You built an app on a platform and it probably gets all of its traffic from one source, which is the Slack app store if I were to guess, and you just can’t get your collection past $4,000. 

That sounds almost exactly like what I did with DotNetInvoice back in the day. It sounds very similar to when I see people doing it with Shopify apps and Heroku apps, unless some people make it past it, but at a certain point you naturally plateau. And then adding more marketing to this kind of app, which is usually pretty low-priced, my guess is these Slack apps you’re charging $10, $20, $30 a month, and at that low price point, you don’t have any budget to do any marketing approaches that work. I mean, you can do SEO and content and affiliate marketing. There’s a handful that are cheap enough and I talk about them in the SaaS playbook, which ones are cheap enough that you can do at these very low price points. But it’s like four approaches, five approaches tops out of 20. 

So when your average contract value is this low or average monthly revenue per customers is this low, you don’t have a ton of options to work with. So what I would do is I would either look to just sell these and get the cash and move on to bigger and better things, or I would keep building or acquiring more of these until I had bought out all of my time, this is step two of the stair step approach, and get it to $6,000, $8,000, $10,000 a month MRR. Then I quit my day job. Now I have all my time to myself and I’m able to then build what I want. And for me, the next step of course is standalone SaaS. That may or may not be the direction you want to head. But yeah, after four years wanting to give up, I understand that I would feel similar. 

I will say that you’ve built an asset, I don’t know how many apps are involved and how complicated it is, but let’s just say for the sake of argument, you’ve built one Slack app to $4,000 MRR. So on an annual basis, that’s $48,000 MRR, and let’s just say for easy math that you have $8,000 a year in expenses. So your seller discretionary earnings or SDE, which is kind of like net profit is $40,000. You should be able to sell that for four to five times so 140 to $200,000, maybe six times 240,000. The issue with six times I think is that you have platform risk because you are on Slack. But man, you’re so small, platform risk should be less of an issue. But you get the idea, I’m just ball parking here, don’t take these numbers for gospel. But if you talk to a quiet light brokerage or [inaudible 00:23:28] International or acquire.com, one of these either brokers or marketplaces, you can get a decent amount of money for it. And that is a luxury we have these days is that SaaS multiples are good enough that it makes even singles, base hits like this, potentially worthwhile. So thanks for that question Tamon. May not be the answer that you wanted to hear about not being able to outsource marketing, but those are my honest thoughts. My next question is about how do I know how good my technical co-founder is?  

Speaker 3:
Hey Rob, first of all, I want to say thank you. I absolutely love the podcast and it’s been so helpful on my entrepreneurial journey. So please, please keep it up. Here’s my question. I’m asking it partially because I’m looking for an answer, but also because I think it would just be interesting to see your response and I think it would be helpful to other podcast listeners. So my question is how as a non-technical co-founder do you recommend evaluating the performance of your technical co-founder and understanding what good looks like? I’m developing a SaaS app and I have a technical co-founder who seems really good and I definitely trust him and he’s accomplished in his career, but I just find myself as a inpatient, non-technical co-founder, always trying to get it done faster and not knowing what good looks like and what is reasonable to ask for. So I’m wondering if this problem resonates and if you’ve seen it before, and if you have any hyper tactical or specific insights or ways that you would recommend evaluating the performance and understanding really what good looks like. Yeah, that is my question. I am looking forward to your response. Please keep up the great work. I love the podcast and will keep sharing it with all my entrepreneurial friends. Have a good one.  

Rob Walling:
I think about this on a few levels. As someone writing the code for your product, there’s speed of shipping code. Then of course there’s code quality and the stability and scalability of that code, the ability to modify it in the future. And then there are the soft skills. The interpersonal communication, does he hit deadlines that he says he’s going to? Does he communicate those properly and all that. Soft skills, I’m going to leave it to you. You guys are in communication. I’m going to assume that you can evaluate those. Speed is tricky because you might say, “oh, we’re moving slowly”, but in fact he’s building something that’s very difficult. We are building it very well, and so the only way I know to evaluate speed is to have another person look at it and estimate it of this is the code base or we’re writing in this language with these frameworks and this is the feature we’re trying to build and have someone weigh in on, oh, that should be a week’s worth of effort or that should be a month. 

And it doesn’t have to be exact. Someone’s not going to tell you, “oh, it’s 12.5 hours”, but they might tell you “in my app, I could do that in about half a week”, or “I could do it in a week” or “I could do it in three weeks”. And so you can get an outside perspective without talking to your co-founder on that one. If you know of a super senior Dev who has estimated a lot of things in their life, you could just have this conversation and show these are some things that we’re trying to build. Here’s the problem though, or I say something I would caution you in. Is oftentimes if someone’s really good, they might be a little slower and you might need to put up with that to have high code quality with high maintainability, and that’s just something that you have to do as a trade-off. 

I have 100% made that trade-off in certain instances. I remember being feeling stressed in the early, early, early days of Drip that we aren’t moving fast enough, but I knew Derek was a baller developer, but I knew he also wrote really maintainable high quality, scalable code. And so if it took an extra few days or an extra few weeks on a larger project to ship something, I was willing to live with that because I wanted long-term to have a code base in a company that would scale. Unlike some companies that we see where you get this non-technical founder who hires a Dev or has kind of a minority technical co-founder, and they drive them and push them to write code faster and faster and faster, and the code is shit, and then they get to a million, 3 million, 5 million in ARR and they stop, they lock up. 

You can’t build features because nothing is maintainable. You can’t add new things because you break old things. There’s no unit test, there’s just low quality code. So that’s the thing you have to be careful with is if the code is super high quality and really, well let’s say maintainable, it’s modular, that takes time. And so I think that’s a hard thing to evaluate. Code quality, you could have someone just review his code, whether it would be weird for you to be like, “I’m going to have an outside person review your code”. But you could have someone look at it and not tell him. That feels a little weird to me if you’re checking up on your co-founder, but you have to use your judgment on that and realizing that different people have different measures of quality. And scalability and long-term maintainability, you kind of won’t know. 

You won’t know for years feasibly. That’s the problem that we see with some folks who are non-technical founders and they hire out their development to an agency or to a freelancer. Nothing breaks, nothing’s bad for the first six months and then at 12 months, 18 months in, it’s like, “why are there’s so many bugs?” It’s because the code quality was shit. But you just don’t notice it in the early days because you go back and you fix those, but eventually you hit the point where quality just grinds to a halt and it will grind your whole business to a halt. So realistically, no easy answers here, but soft skills, you should be able to evaluate. Speed, I think a third party, if you’re particularly worried about that, I think talking to someone and saying, “how long would it take you to build this in Python or in Ruby?” 

And obviously you can go to Clarity.fm. You could hire someone on Upwork as someone who’s $150, $200 an hour and use them as an outside consultant. Again, whether you talk to your co-founder, it would feel weird to be like, “Hey, I’m checking up on you”. But whether you talk to them or whether you just go straight to a source or if you’re in MicroConf Connect, there’s a bunch of developers. And you work your network at a MicroConf in person event or whatever, kind of sanity check and take things with a grain of salt, I think you can get a reasonable approximation that might help you sleep better at night. So thanks for that question. Hope it was helpful. 

My next question is from Steven Davis, longtime listener of the pod, and he has written in before. And this is from March of this year, so about seven months ago. “I know you’ve covered no-code several times, and I know you’re a vigorous champion of SaaS, but if you are a SaaS builder, what about self-hosted no-code tools? I’ve been looking at some of the tools in the Linode marketplace. I kind of stumbled into this recently. To me, these offer an interesting trade-off between roll your own and SaaS, no-code offerings. Easier to customize, easier to scale, lots of caveats, but the price hikes and performance of SaaS, no-code can be challenging and you code what you need to and nothing else. WordPress is the grandfather of this, but there seems to be a growing set of options. Sendy is a proprietary but self-hosted email tool. There is the self-hosted Reddit forum, but they aren’t looking at this from a business perspective. Lots of them are open source, so you have to be careful about licensing and maintenance risks if it is closed source. You can look up open source Airtable or notion that they aren’t as polished, but they are on your machines”. 

Such an interesting suggestion from Steven, and I think Steven is particularly looking to get around the platform risk that you face when you build on Airtable or Notion or with Zapier. It’s really hard to migrate off of them. I think the biggest concern I would have is the same concern I have with Basecamp’s new offering, or I guess it’s 37signals offering Once. Once.com where they say you pay once and you host it yourself. I used to do that 20 years ago and it sucked. I hated hosting my own stuff. I hated, the updates would break things like WordPress is a grandfather of this. I actually wish I was not on WordPress. But I have, what do we have, two websites on WordPress? 

One is this podcast website because it still is the best platform in my opinion to host podcasts. The other one is robwalling.com, and there’s reasons that those are still on WordPress. But I’m twice a month I’m getting emails of this WordPress plugin that you have has a virus in it, and so you need to update it immediately. So then we have to do a staging environment and then we have to update it and then we have to test and hope nothing breaks and it’s a maintenance headache that I wish I didn’t have. And in fact, that’s why all of our other websites, like you go to tinyseed.com, microconf.com, you go to startsmall.com, saasplaybook.com, sherrywelling.com, zenfounder.com. Those are all on Squarespace. Do I think Squarespace is God’s gift to website builders? No. But do I ever get an email that one of my plugins is out of date or that the theme is broken or they’re doing an upgrade to my SQL and I need to go get my Gemini theme update? No, I don’t have to deal with it. 

So for me these days, and it has been for probably the fact… Because I used to tinker with this stuff, probably about the past, I made the switch about 15 years ago to where… I mean I used to have a server in my closet that served our source control and we used Vault or what was Microsoft’s one back then? Oh, I can’t even remember the name of it. But SourceGear had Vault and I would serve it off of that server, right? That’s like 20 years ago, it’s just crazy town. And I hated doing that. I hated having to worry about all that. So I see the appeal of hosting your own no code, it’s easier to customize, it’s easier to scale, you code what you need, exactly what you said, and you don’t have the platform risk, right, because you have the code. 

My concern is these days, I’m not in the business of maintaining custom code for this purpose. It’s a black box and I just want it to work. Look, if I was building a SaaS company, I wouldn’t want to build an Airtable or Notion as my Wiki. I wouldn’t want to maintain my own. The only custom code I want to maintain is my actual product. I don’t even want to build my own knowledge base. I don’t want to build, there’s a bunch of ancillary things around building a SaaS product, and there’s a reason there are SaaS offerings for those because it takes all of the security and the maintenance and the feature development and other things away from you. But of course with that, there are trade-offs. You pay the subscription, and you have this platform risk that they could screw you, they could raise prices, they could feasibly go out of business. 

There’s all these things, these problems, with SaaS as a model. But going back to pre SaaS and imagining installing and maintaining, I didn’t even get into maintaining the OS on the servers and having to keep that upgraded. I mean, I guess if I was on a shared hosting account or like a VPS or something that was maintained by them, that’s a hosting provider, that’d be fine. But anyways, so it is definitely an interesting idea, Steven, and I have not heard of this prior to you mentioning it, so I appreciate you bringing it up on the show. But for me, my vote would be a no because I just want all of that taken care of. As a reminder, head to stateofindiesaas.com. Take about 10 minutes and please complete that survey so we can put together an incredible report for you and be entered to potentially win a free ticket to MicroConf US 2024 in Atlanta. Thanks so much for listening this week and every week. This is Rob Walling signing off from episode 686.

Rob Walling:
And I’ve always wanted to avoid the lottery ticket approach, the big promise of, “You can be a millionaire tomorrow. Here’s an example of this person who did just that, and I’m going to teach you how to do that,” when in fact that’s bull (beep), when in fact it’s survivor bias, when in fact that’s one person out of 100 who each launched five products, and this one person got lucky and so it’s not repeatable, and I (beep) hated that stuff when I was coming up. 

It’s another episode of Startups For the Rest of Us. I’m Rob Walling, and today I’m talking about seven things you should never do. And I want to caveat this with, it’s for the most part you should never do. I use never in the title as a way, of course, to get you intrigued. But I’m not the person who puts never in all caps on social media and says things like, “In your designs, you should never have buttons with rounded corners because I say so and you never should.” We used to get these comments when we were building Drip. It was just insane, the confidence with which people would proclaim their opinion as fact. So I’m not going to do that here today. 

I use never kind of tongue in cheek. I think it’s for the most part, you shouldn’t do it. It’s a best practice. It’s probably 95% of the time you shouldn’t do these things. And some of these are things you’ve heard me talk about before, like bootstrapping a two-sided marketplace, or going B2C instead of B2B. This entire episode was inspired by a listener voicemail that I’ll play in just a minute. But before we listen to that, on this very podcast, we’ve talked about how in the US, Section 174 is really destroying our ability for software companies to write off expenses for software development, and instead having to depreciate that over many years. If you’ve just finished your taxes this fall, you probably saw them go way up with a lot more paperwork, and Section 174 is really the culprit. 

And previously, you may have been a signer or at least heard about the former letter that our broader MicroConf and Twitter community sent to Congress in April on this issue. Well now, several business groups, everyone from the small software crowd, to biotech startups, to big companies like Boeing are coming together on a new formal letter to Congress. 

So I’d encourage you if you want to get this fixed before the end of the year, which I think all of us in the software space should be worried about, go to ssballiance.org for the link to the new letter. Even if you already signed the one in April, this is the next phase, and I’d encourage you to check it out. 

An important note, this is for us headquartered companies, but you do not need to physically be in the US or be a US citizen to sign. So really, it’s US domiciled entities. 

The deadline is tomorrow, Wednesday, November 1st. So if you’re hearing this podcast before, then head to ssballiance.org. 

Before we dive into the episode, I want to invite you to MicroConf Remote. MicroConf Remote is our virtual event that we host twice a year. This next one is focused on early stage marketing. It’s on November 1st and 2nd. If you’re interested, head to microconf.com/remote. It’s a very inexpensive event, and talks will include the bootstrap startup marketing checklist, when early stage SaaS companies should hire a copywriter, and how to hire one that doesn’t suck. Building a sustainable customer acquisition funnel, SaaS email marketing, plus our patented Founder x Founder speed networking to get you introduced and connected with other founders in our community. Again, that’s November 1st and 2nd of 2023. Microconf.com/remote if you’re interested. Even if you can’t make it, if you buy a ticket, you will get the videos after the event. Hope to see you there. So let’s dive into the meat of the episode, and I want to kick us off by listening to the voicemail that Dan from Austin sent in.  

Dan:
Hey Rob, it’s Dan from Austin, Texas. I’m listening to the September 19th episode, which is great, and there was a couple comments that really got me intrigued. You said don’t start a B2C software company, and you also said, “Hey, don’t start a two-sided marketplace,” with a few caveats for both. 

But I’ve heard you make these arguments before, but as you said those things with such confidence, I was nodding my head and I thought, “Man, I’d really love to hear some more things like that.” What are five other things that you think for the most part, founders just should not do based on all your experience? And if you had, I don’t know, some stories or some anecdotes about those things or arguments, I think that would make for a really entertaining episode. So I thought I’d toss it out there and just say thanks for the pod. We appreciate it.  

Rob Walling:
Mark your calendars. I think Halloween 2023 is the day this podcast went big time. Because if you recognize the voice of that voicemail, it was friend of the pod Dan Andrews who runs the Tropical MBA Podcast with Ian Schoen. I appreciate Dan writing in with this great episode idea. 

I’ll admit, prior to this, I haven’t sat down and tried to think of a bunch of things you shouldn’t do, but they just come up when I get questions, or I see something a founder is doing and think that’s an anti-pattern in my mind. 

So in software engineering, there are design patterns that help you architect things and are general best practices, and then an anti-pattern or a dark pattern is something that you shouldn’t do, right? These are things, anti-patterns against what we would recommend. And so I think these seven things that for the most part you should never do fall in that category of anti-pattern. 

I did pull a couple from my book. I remember I had a section in there about mistakes that founders often make, so there’s a couple in here from that. And then there’s a couple others that I thought of as I was outlining this episode. 

So I’m going to skip one that Dan called out, which is the two-sided marketplace. I feel like I’ve railed on that so much over the years. You know the reason I have? Is because so many people write in, or apply to TinySeed, or email me, or DM me and say, “I have this idea and it is,” insert name of the next two-sided marketplace here. And I’m always like, “Great, how much funding are you raising?” “I’m going to bootstrap it.” Don’t bootstrap a two-sided marketplace unless you already have one of the sides. This is Rob’s rule of two-sided marketplaces, we’ll call it. 

I’m going to stop there. I always get carried away with this. And I’m no longer answering questions about two-sided marketplace. If you want to do that, find two-sided marketplaces for the rest of us. It’s a new podcast, I’m sure we’ll spring up. It’s just one of those things that talking about them is I think not helpful to the rest of the people who are bootstrapping, who are stair stepping, who are starting SaaS companies, info products, and all that. 

So with that, I’m going to move to number two of the seven, which is starting a B2C application. And again, I jokingly say tongue in cheek say never. Not that you never should. Obviously there are B2C applications that work, but what are the downsides of B2C? 

Well, it’s low price point, it’s high churn, it’s high support demand, and it’s high and entitlement and less technical users. And all of that for the ability to charge someone $7 a month, or $50 a year, or $30 a year in a lot of cases. When you go B2C, you get the worst of all the worlds, and you don’t get enough money to be able to do any marketing other than free marketing. It has to be viral, it has to be content/SEO, or it has to rank in an app store, which I include as SEO. B2C apps are very, very difficult to actively grow like you can with B2B, because with B2B, the prices are higher. And what’s the second order effect of a price being higher? You can afford more marketing approaches. I covered this in my MicroConf talk about pricing. I covered this in the pricing chapter of the SaaS playbook. 

I have owned multiple B2C products, some of which were eBooks, and some of which were software. And it quickly became obvious to me this was not the path I wanted to go down. And what was funny is that the very first MicroConf in 2011, I talked about this, about how bad it was… I’d never heard anyone say, “Don’t start B2C apps.” And I talked about it in my talk. That very same event, I think it was the next day, Patrick McKenzie, patio11 was talking about how B2C is tough and was talking about all the struggles he was having with Bingo Card Creator. And it quickly became a pattern of, “I think B2C is probably not a great choice.” 

Look, if you want to build something fun, little tool, utility to 1,000 to 5,000 and deal with the high churn, it’s fine. Do it. Again, it’s not never, it’s for the most part you should never. And can you do a fun experiment? Can you scratch your own itch? Can you solve your own problem and then go and want to just share that with the broader world? Of course you can. I wouldn’t say… Do stuff that’s fun, right? If it’s a hobby or you’re doing it for a lark, you go do that. 

I want to close this section out with a story from a friend of mine who had an iOS app. And I don’t even remember what it was honestly. It was like a B2C, some type of calculator or something that consumers downloaded, and he would frequently get people who would threaten him and say, “Add this feature or I’ll give you a one star review in the iOS App Store.” Or he had reviews he would screenshot and send to me. I believe his app was 3.99, let’s say, $3.99. And it would be a two star review and it said, “Would be worth it if it was 1.99.” And I remember I was just like, “Sir, this screenshot embodies everything that I think about building B2C apps.” 

So the third thing that you should for the most part never do is build a second product because your first one has stopped growing. I’m going to point you to an entire 50-minute episode of this podcast. It was four episodes ago, episode 681. I had our very own Ruben Gamez on the show, and we ran through… This is actually the show that inspired Dan to send the voicemail. But we ran through the pros, the cons, which there are a lot of, and really the mistake or the myth of the second product. 

That’s what we were trying to touch on is there is often this grass is greener mentality that, “If I just had a second product, then it would do this,” or, “It’s the same code base, I could just fork it off, and I don’t think about the hundreds and hundreds of hours I’ve spent building the domain authority and doing all the other things I’ve spent doing it.” 

So I’m not going to belabor the second product here. You can go back and listen to 681 again if you want to be refreshed, but that is the third thing that I think you should never do. 

Number four is one that I tried to do myself unsuccessfully. And this is one, you should never do it if you’re bootstrapping really. And again, you should almost never do it if you’re bootstrapping. Have I seen one out of 1,000 work? Probably, but these are my rules of thumb. And it’s create a category. 

So this is where you go out and define a new category of software, where you are trying to be so clever and be novel such that you have no competition, and you build out the space, you create the demand. If you’re familiar with the five stages of customer awareness, when you create a category, everyone is unaware or maybe problem aware if you’re lucky. So the education that you have to bring… And if you haven’t seen the five stages, just Google an image, but it’s in order from least aware to most aware is unaware, problem aware, solution aware, product aware, and most aware. And so when you create a category, you are in the top two of those. It’s unaware. And maybe if you’re lucky, problem aware. 

So to get people to be aware that there’s a solution, no one’s searching for that solution. To get people to be aware that there are products that do it when no one’s searching for those products, it’s a tremendous amount of effort, skill, expertise, time, and money to do this. So should you never create a category? No. 

So I tried to do this with Drip actually in the early days. I didn’t want to build another ESP. I felt like it was super crowded. That’s email service provider. So I didn’t want to build a MailChimp, or a Constant Contact, or an active campaign, just felt like it was too crowded. And so I tried to be really clever. And instead of just saying, “We are email marketing,” or, “We are marketing automation,” our headline described what the product did. And I don’t honestly remember exactly what it was, but it was something like, “We send automated emails at the right time to your customer’s prospects,” and blah, blah, blah, and it was about being clever and automating. But people couldn’t put you in a category. They would think, “So are you like MailChimp? No. I guess that’s email marketing. Are you marketing? But you’re for customers? So are you like customer.io, or are you kind of a CRM thing?” People would be confused. 

And as a result, I mean we basically plateaued at eight or nine grand. You’ve heard the story, didn’t have product market fit, and eventually I realized we should move ourselves into an existing category of software, and what we should do instead is carve out a corner of that using positioning. And so that’s when the headline changed to lightweight marketing automation that doesn’t suck. 

So the category is marketing automation. Our positioning is that we were lightweight, and that we were great to use, and we were reasonably priced, and we were on the customer side because we didn’t suck, right? It wasn’t old software. 

That was the moment where for us, things started taking off. That’s when Drip found product market fit. Now we had to build some features in order to get there, but that was the key so to speak, that unlocked the growth that became Drip. 

There are exceptions. There are times when you should create a category. Think of what Dharmesh and his co-founders did with HubSpot. This is before the CRM. They created inbound marketing, and they basically created this inbound marketing hub where it was a combination of Google Analytics, and I think it was like a website builder, maybe some lightweight email marketing. But it was this bundled tool. It was a bunch of tools you could get individually, and you and I as developers could comp them together. But if you’re not a developer or you’re not really into MarTech, this was an easy way to get it all in one place. And so they had to define that because it didn’t really exist. People didn’t know what to call it. 

And so if you go back to the book Inbound Marketing by Brian Halligan and Dharmesh Shah, those are the co-founders of HubSpot, and they raised a kajillion dollars to do this, and I talked to Dharmesh about this at one point. He and I were speaking at the same event and I said, “You created a category, congrats. So few people do that. When should you do it and when not?” Or, “What did it cost?” I think was the question I asked. And memory fails, but something to the effect of, “You need $5 million and two to three years.” Maybe he said 10 million in three years or something, but it was more money than I had. It was more time than I wanted to spend. 

They wrote a book, they started inbound.org, which was like a social news site for inbound marketing. They went all in on defining this term, and Dharmesh had a pretty decent audience at the time, and it was still this massive uphill battle. 

I think Intercom faced the same thing and then Drift came in. These are the chat widgets. And Drift for a long time, I don’t even remember what category they were trying to create, but they were trying to be different than Intercom. And I think it all kind of is one category in people’s minds now, but Drift raised a kajillion dollars based on David Cancel’s amazing reputation as a five-time entrepreneur, and it still took them years if you watched them grind that out. 

So creating a category involves not selling in an existing category. It involves, “I’m a builder, I’m a maker. I have this great idea for something brand new that doesn’t have a two word phrase that describes it.” That’s how I think about it. Or maybe it’s I guess an acronym, or a three word phrase like customer relationship management, CRM, email service provider, ESP. 

When you go beyond that, when you start using four or more words, this is Rob’s completely made up rule of category creation. But when you start needing four or more words or a complete sentence to describe what your product does, you’re in the danger zone in my opinion. 

Now, someone could give a counter example and say, “Well, what about chat AI, PDF thingy, where you allow me to chat with my PDF? How many of these are out there?” Chat CSV, whatever AI, ChatGPT wrapper people are using these days to allow you to do something? Do those create a category? 

And my answer is most of those wrappers are a single feature, and so you’re not trying to describe a complex piece of software. You can literally have a headline and it describes everything it does. All it does is allow you to chat with your PDFs. You don’t need a category, because it’s not complex software. 

But the moment I tell you, “Okay, you have a form, and you’re going to collect email addresses, and they’re going to go into a list. You’re going to be able to send broadcasts and sequences to those people. You’re going to be able to tag them when they buy something or when they do something else. There’s integrations with payment providers and landing page.” You need a category for that, because it’s not just a single feature. 

I had an app called HitTail, it was an SEO keyword tool, that was the category. But the one sentence description was, “HitTail tells you keywords you’re already ranking for that are low hanging fruit to increase your ranking.” All right, obviously that’s a very long description. I could tighten it up, we could workshop it. I can make it shorter. But you get the idea. It was just that. It was a single feature. 

So it fit in a category of SEO keyword tools. I could also describe it as that feature, and that’s how I think of these AI wrappers is they are just a single feature. Now the moment your software does two, three, four, five things, you can’t put that in a headline. So what do you do now? That’s where buyers usually need categories to figure out what your software does, and so they can bucket you and compare you against other categories. 

Here’s the other thing. I’m not talking about five, 10K lifestyle businesses, five 10K a month. I am talking about, how do we build a million dollar or multimillion dollar startup? Much in line with my latest book, The SaaS Playbook, which talks about building a multimillion-dollar startup without venture capital. 

There are always these niche, tiny exceptions where could I go B2C, or have a second product and try to… I don’t know, create a category wouldn’t be the thing, but be outside of a category maybe is another way to phrase it. And can I get that to 5K, 10K, maybe 20K a month? Or if I have some massive Twitter following, and I do a product hunt launch, and I get a little lucky that I can get it up to 50K a month, these are all possible. 

They’re very unlikely. They’re not repeatable. They rely a lot on luck. I like to rely on hard work and skill. I like to talk about things that are repeatable, and that through execution you could do over and over and over. And so that’s why I’m talking today about things like creating a category, which is an anti-pattern if you’re bootstrapping because it’s expensive, takes so much time, and for all the reasons I’ve already covered. 

As a founder your plate is full. So when you have to hire devs, there’s no time to search for that perfect culture-fit, get-things-done developer. Lemon.io’s new product, Lemon Hire saves founders time by connecting them with a pipeline of more than 80,000 senior engineers. Each dev is filtered through a 4-step vetting process, is available to interview within 48 hours of being selected, and is backed by a 30-day replacement guarantee.Find your ideal candidates fast with Lemon Hire.

Claim a special discount for Startups For the Rest of Us listeners by visiting lemon.io/hire. When you sign up make sure you mention “Startups” to receive $2000 off your first hire.

The fifth thing you should probably maybe never do if you’re bootstrapping is translate your application into multiple languages. And I mean spoken or written languages, not coding type languages. This one, I see it much less often, I’ll admit, than the others, and this is probably less important. I won’t spend too much time on it. 

I have seen multiple people, and in fact, there was one app that I bought where at its peak, this SaaS app was doing, think it was six, seven, $8,000 a month, single digit thousands. And yet they had translated the application, all the error messages. I think they even translated the entire marketing website into three or four different languages. 

And it was such a bizarre use of time and energy. It was kind of like a weird form of procrastination. I think about it like that, where instead of doing what’s actually going to move the needle, instead of doing the thing that makes me uncomfortable, which look, maybe it’s talking to customers. Who’s grinding out another big feature? I’m going to go watch TikTok, and I’m going to watch some YouTube, and I’m going to listen to an audiobook, or I’m going to go on my Trello board and stare at it, or I’m going to go translate my app into multiple languages because I think that’ll move the needle. It really feels like an odd form of procrastination and it’s a huge waste of time, unless you’re at the point where you have tapped out your entire market. 

So I’m going to use the English-speaking market, or the US market for that matter as an example. If there are tens of thousands of people or businesses that could buy your product, and you’re doing five or 10K MRR and you’ve plateaued, figure out why you’ve actually plateaued. The reason is not that you’ve consumed the entire English-speaking market and you now need Spanish. Even if someone, three people requested we translate it to Spanish. The odds of you being able to translate it well, translate your entire application, just invest the dozens, hundreds of hours to… It’s somewhere, and it’s not hundreds. I mean it depends on how many many English strings you have in there, but to invest the amount of time, the effort, the energy to translate your entire app, and then translate your entire marketing website. And then, are you going to do support in the new language in Spanish? Are you going to translate your knowledge base into Spanish? Are you going to have a separate domain or the same domain? Are you going to market in Spanish? Are you going to do SEO, content, cold outreach, integrations, partnerships, attend events, all the 20 B2B marketing approaches I talk about? 

When you translate into another language, you spread your focus. In all the conversations I’ve had with every founder I’ve ever advised, invested in, been involved in, anyone who asks my opinion, one founder convinced me that they should translate it, that it was the right time to do it. And I think he was right, and it was a really good conversation. It was similar to the conversation I talked about when we talked about second products in episode 681, where Jordan Gal just had really good reasons. I said, “You know, you’re right. You are the exception right now to my rule of thumb.” And I’ve had one founder be the exception to this translate to other languages rules of thumb. 

He had tremendous market pull. Parts of his site were already ranking in Latin America. This is an English to Spanish translation. And he had some incredible resources. He already had a support person who was bilingual. It was like everything that I just said, every objection I just talked about, he had an answer to, and he had either thought of it, or he happened to have a good way to do it. And he was running a team of people. He wasn’t at 6K MRR. He was orders of magnitude above that and growing very fast. 

And the other thing was that he had customers, but his customer’s customers often spoke other languages, even if his direct customers spoke English. So the people buying from him spoke English, and their customer’s customers sometimes did not. And so he was thinking about doing, I think it was like two or three of the most popular languages in the world, and he was getting multiple requests for this, and he was getting some not only inbound, but starting to rank in these other engines. And most of his support, he could still do in English. And I’m only using English as the example because these are the companies I deal with. Obviously, your native tongue would be the English equivalent in this example. 

The sixth thing that for the most part you shouldn’t do is to treat symptoms instead of finding root causes. I realize this one’s a little meta, but the biggest example I see is churn. Churn is usually a symptom that you have something else wrong in the business. Usually. There comes a time when you’re doing tens of millions a year or maybe a month, and optimizing your churn by having people upgrade to annual plans, or making people give you a reason before they cancel, or offering a discount, or a subscription pause, or other options like that, those will reduce churn. 

And at a certain point, that makes sense to just do it blanket, and it will lower your churn, make your business better. 

The problem is I’ve seen founders who are doing, again, they’re early. 5K a month, 1K a month, 20K a month. And they’re churning too high, and so they start implementing these anti churn tactics forcing everyone to go annual, or making that the default, or making you have to call them on the phone to cancel, or just whatever. Putting up some type of friction to get churn down. 

And what that does is it actually masks the root cause of that churn. That root cause is usually that you don’t have product market fit. You have not built something people want and are willing to pay for, or you have weak product market fit. There’s a bunch of things we could go down in terms of the root cause. But by attacking the symptoms, treating the symptoms, you are doing a disservice to your customers. You’re doing a disservice to yourself because you’re not learning. 

And to be honest, the reason people do this is because the learning and the figuring out what’s wrong and then fixing is actually really hard. This is a hard part of being a founder. The easy part is let’s build a fun product, come up with an idea, and launch it on Product Hunt, and put it on Hacker News, and tell our friends about it, and get some people in. And boy, it got hard, huh? Everyone’s churning out. Well, guess I’ll move on to my second product. Let’s make this one a, B2C, two-sided marketplace in a new category that I can translate into six languages from the start. Anyways, I’m being facetious here obviously. 

So this one comes out of me seeing founders, aspiring founders posting on Twitter usually, a conclusion they’ve come to about reducing churn. “Look at this thing I tried. Churn was high, now it’s low.” And usually, I don’t think you’re actually attacking the real problem. 

Another thing is split testing too early. “I’m going to split test headlines because my conversion rate on my website is low. My visitor to trial,” often it’s like well, maybe the whole website. You just haven’t built something people even want to try out. And that’s the root cause, and it’s hard to figure out what that is. It’s easier to look at a tactic like churn reduction or split testing, and implement that thinking that’s going to save you. But usually, what you’re doing is you’re messing around with a local maxima rather than a global maxima actually jumping up another level, which if you get to the root cause, you can start to attack. This frankly could be a book chapter, multiple podcast episodes, because finding root causes of these things, it’s challenging. But that’s why I do see people treating those symptoms. Maybe it’s a form of procrastination or maybe it’s just a form of not knowing any better. It’s asking the wrong question, right? It’s, how do I reduce churn? Where it’s like I guess that’s the question, but really the quick easy answer is the tactic, “You can try these five things to do it,” but the hard answer is usually digging in, finding the root cause. 

My seventh thing that I think you shouldn’t do if you want to build a multimillion-dollar startup and bootstrap it, is to launch a bunch of products. And I have quotes in the outline that says, “Hoping one sticks,” end quote. 

I’m a builder. I love the idea of building 12 products in 12 months, 52 products in 52 weeks. Building and shipping is a dopamine rush. It’s amazing. Getting your new product, or feature, or ChatGPT wrapper or whatever into the hands of people on Product Hunt, and Reddit, and Hacker News, and your friends. And look, I’m not mocking. I know earlier I was joking about Product Hunt and Hacker News launches. Those are a mixed bag, but they’re not a bad thing. If I was launching a product today, I would 100% want to get on these social news websites. I do take them with a grain of salt in terms of actually gathering customers that will stick around, but I do think there’s some value there. It’s probably a topic for another podcast episode. 

But the idea of launching a bunch of products, hoping one sticks has a couple problems, pretty major problems for me. One is you don’t learn very much. Because if I launch 10 products and one works, it’s unlikely I’m going to know why. It’s really likely I got lucky. And again, I don’t like to teach approaches that need or rely on luck. I’ve been doing this for… I don’t want to sound too old, but let’s say in the neighborhood of two decades. And I’ve been successful at it for less time than that, but I’ve been talking about it on this podcast, my blog, my books and everything for whatever it is 15 years, 17, 18 years. 

And I’ve always wanted to avoid the lottery ticket approach, the big promise of, “You can be a millionaire tomorrow. Here’s an example of this person who did just that, and I’m going to teach you how to do that,” when in fact that’s bull (beep), when in fact it’s survivor bias, when in fact that’s one person out of 100 who each launched five products, and this one person got lucky, so it’s not repeatable. And I (beep) hated that stuff when I was coming up, when I was trying to become a successful entrepreneur, and I could just smell snake oil. And the further I dug in, the more I found out that the person promoting the approach had gotten lucky, hadn’t really built the business they talked about. 

And so the idea of learning, and not just being successful, but knowing why you’re successful, and knowing that you could repeat that again, or actually repeating it again showing that you have the skill to do it multiple times. This is something I’ve always held onto pretty tightly. As someone who has been both a doer and a teacher, not just a teacher, not just someone who had a middling success and then claims I started the biggest startup and had the biggest exit anyone’s ever talked about. I’m really sensitive to the people out there who oversell what they’ve actually done. And the folks who oversell what they’ve actually done usually got lucky, and usually don’t know why they’re successful. That’s the problem. 

So let me tell you some people who are not in this camp, so people who are successful and I think could do it 20 more times if they had the time. 

Jason Cohen, Heaton Shaw, Rand Fishkin, Ruben Gamez, David Cancel, Dharmesh Shah, I can go on. There’s more than that, right? There’s people in TinySeed who I have a lot of respect for who I know could do this again. 

And they learned what it took. They had to grind, they had to make mistakes, and then overcome those mistakes and figure out, what is the thought process? What is the approach? What is the troubleshooting? If you never make mistakes, are you smart or are you just lucky? If you make mistakes and overcome them, you learn. You become just a little bit better as a founder. 

And so that’s the first thing I don’t like about this oping one sticks is I don’t think there is much learning in launching and getting lucky with one out of 10, one out of 20, and then writing that. If that were to be successful, I question if you can ever do that again, if you just caught lightning in a bottle. So the lack of learning and really truly understanding why you’re successful, I think is one thing. 

The other thing is oftentimes in most cases, I’ve talked to literally thousands of founders now, many of whom are successful and some of whom are not. Most of the time, the thing you initially launch with is not the same product that gets you to product market fit. Most of the time, you launch with something you think the world needs, and you miss the mark. Sometimes by 5%, sometimes by 95%. 

But great founders then ask the right questions, have hypotheses. They just pivot around. They add a thing, they make a guess, they change their positioning. They don’t just willy-nilly do it, but they learn, and they take those learnings, and they build them into the product, and the positioning, and the marketing, and the sales, and slowly they grind to the point where they’ve built a business that people want and are willing to pay for and are saying, “Shut up and take my money.” 

Sometimes that process takes months. Sometimes you get lucky. I know there’s someone out there, one in 1,000, who what they launched actually did get them to product market fit. We see those examples on Twitter. Right? We see the examples on Product Hunt or Reddit, and we say, “Oh my gosh, they did it. I can do this too. It’s totally feasible,” and it is totally feasible. One in 100, one in 1,000, whatever. There’s some minuscule number of times where it’s truly what you thought the market needed was what they actually needed. 

Most of the time, it takes you six months to get there from launch, 12 months, 18 months, 24 months. It takes a long time, and it takes a lot of grinding and there’s a lot of uncertainty. And that, in my opinion, is the worst part of being an entrepreneur, the worst part of starting any company. And let’s specifically say SaaS companies or products that people want, the worst part is the uncertainty when you still don’t know if you’ve built something people want and you’re willing to pay for. 

And so that’s the part that people want to avoid because it’s painful, but that’s the part that I believe makes you a great founder. Those are the moments, those are the days, weeks, and the (beep) months that you grind it out, and you come out the other side if you find it, if you suddenly see your churn plummet, trial to paid going through the roof, and people searching for your brand name in Google, and you’ve caught the rocket ship, you’re starting to catch what I call escape velocity. Once you’ve made it there, you can look back and be like, “Wow, that was hard and it took a long time, but I’m a much better founder for it, and now I know why I’m successful, and I think I could do this again.” I love having that confidence, right? The repeatability of it. 

So again, this is the second point. The first one was hoping it sticks doesn’t teach you anything, doesn’t make you a better founder. But the second thing is it’s a disservice to a lot of those ideas, because I think a lot of ideas you launch, and you get the bump, and you get the dopamine rush, and everybody turns out, and you don’t then know how to market. You never make it past the starting line. 

To me, launching a product is the starting line. People who think about it as a finish line have never built a multimillion dollar product, because really launch is the starting line where you start to learn, you start to learn what you’ve done right, and mostly what you’ve done wrong, and usually you’ve done quite a bit. And that’s where you then gain the skills, right? That’s where you gain the skills of, which marketing approaches do I try, which do I try first? And you actually start doing repeatable things that if they work, will be skills that you take with you for the rest of your life. 

I think if you’re of the mindset that you should launch and see what sticks, I think you’re probably given up too early. We certainly are doing your product a disservice, because it could be successful with work, with the grind. And I think you’re doing yourself a disservice because you’re never going to learn the nuts and bolts, the blocking and tackling, as Dan Andrews would say, of building a business, and that grind and actually getting there. 

Look, when I say grind, I don’t mean 70-hour weeks. I just mean doing things that are hard and you kind of don’t want to do. They’re new, they’re uncomfortable, and they’re uncertain, And you might waste time because you might try a marketing approach and it doesn’t work. But then iterating, and building those features, and getting to product market fit is incredibly rewarding. And that’s the process that can take you from being a wantrepreneur, a brand new entrepreneur, to someone who knows how to build great products and great companies. 

So I hope you enjoyed those seven things you should for the most part, never do, especially if you’re bootstrapping. I really appreciate Dan Andrews writing in with that voicemail. I had a fun time putting these together. Thanks for listening this week. And every week if you keep listening, I’ll keep making these. This is Rob Walling, signing off from episode 685.

Rob Walling:
It’s another episode of Startups For the Rest of Us, I’m Rob Walling, and today with Dr. Sherry Walling, we walk through our key takeaways from MicroConf Europe 2023. This event was held just a couple weeks ago in Lisbon, Portugal, and you’ll hear us give an overview of it, but really dive in to the keynote talks and pull out, I’d say actionable or at least thought-provoking takeaways as well as give our overall thoughts of the event. 

Before we dive into the episode, I want to invite you to MicroConf Remote. MicroConf Remote is our virtual event that we host twice a year. This next one is focused on early stage marketing. It’s on November 1st and 2nd. If you’re interested, head to microconf.com/remote. It’s a very inexpensive event and talks will include the Bootstrap Startup marketing checklist when Early-stage SaaS companies should hire a copywriter and how to hire one that doesn’t suck, building a sustainable customer acquisition funnel, SaaS email marketing, plus our patented founder by founder Speed Networking to get you introduced and connected with other founders in our community. Again, that’s November 1st and 2nd of 2023, microconf.com/remote if you’re interested, even if you can’t make it, if you buy a ticket, you will get the videos after the event. Hope to see you there. And with that, let’s dive into our conversation. 

So Dr. Walling, thanks for joining me on the show and for joining me on stage at MicroConf Europe in Lisbon last week. You and I shared the stage and emceed the event for the first time ever.  

Dr. Sherry Walling:
Co-emcees. We’ve never done that before. We’ve done a lot of professional collaborations, but that was our first co-emcee gig.  

Rob Walling:
I had a great time. How about you?  

Dr. Sherry Walling:
Yeah, it was pretty fun.  

Rob Walling:
We had some witty banter.  

Dr. Sherry Walling:
I don’t think we embarrassed ourselves, which is, you know.  

Rob Walling:
Unusual.  

Dr. Sherry Walling:
It’s always positive, in front of 120 people.  

Rob Walling:
No, but we had-  

Dr. Sherry Walling:
Strong performance.  

Rob Walling:
I had an absolute great time. I was thinking before we recorded this that I wanted to say this sentence that’s going to sound like hyperbole, but this is one of the best MicroConf Europe’s we’ve ever hosted without exaggeration. I remember a few landmark years, this is the 10th year, ninth event because we skipped Covid. In certain years you remember as being amazing, as having incredible energy and the attendees all being on the same page and just this positive group energy flowing. And that’s how this year felt.  

Dr. Sherry Walling:
As the kids say, it had a good vibe.  

Rob Walling:
Had a good vibe. I was trying to… You asked me, “Why do you think it had that?” And I went through all these reasons and I honestly think one of them is that this is such a small thing, but you could step out of the venue, we’re in the meeting space, we’re focused, and then you took 20 steps and you were basically looking at the ocean, they call it the river right there. I guess technically it is, but I mean it’s this huge body of water and you were in the sun and it was, whatever it is, 78 degrees Fahrenheit outside and it just felt like you could quickly recharge and escape the feeling of say, being at an event and suddenly be outside talking with founders, drinking coffee, having those amazing Portuguese pastries.  

Dr. Sherry Walling:
Yeah, I mean as a psychologist, that’s not a small thing at all. That’s a huge thing to have a little bit of contact with nature, a little bit of sunshine and just a general environment that feels relatively relaxed but also very alive and awake. You don’t feel like you’re just sitting in a room all day getting bombarded with facts and information, but that you’re really present and that when you feel that diminished energy, you can go out and recharge really quickly and easily. And I think that’s why I’ve really loved the MicroConf Europe’s that I’ve attended because you and Xander and the team have done such a nice job of having them in really beautiful places.  

Rob Walling:
And that’s something that I think is perhaps a little easier in Europe because in the US where we’ve had it, let’s say downtown Denver, downtown Minneapolis, and then Vegas before that, you’re always in the middle of a city and we’re not next to a lake or a body of water, versus where we were in Dubrovnik and now in Lisbon, you’re just right by the body of water. And so I think that’s a factor. Here’s the thing, here’s not the number one factor, it can’t be because that rules out like 99% of venues and there are only so many venues available at certain prices and certain places where people can get to on airplanes. But it definitely is a factor for me, I think  

Dr. Sherry Walling:
I think one of the benefits of having it in a place like Lisbon is people can combine the attendance at the event with a little mini vacation, which is actually what we did, which we’ve done in different versions over the years with our family mostly. But this is the first time that we have done a little mini vacation, just the two of us attached to a MicroConf Europe event. And I think that’s why you were so relaxed and had a good time is because we had a few days to play first. And again, I think that’s a really nice way to just build in a little bit of play and relaxation and fun, whether you’re a founder going by yourself to an event and you just add a couple days to explore or you’re able to bring your partner or even your family. Taking advantage of events that are hosted in really beautiful spaces, writing off your ticket, just sort of double dipping on your time and energy and travel is a really lovely way to use the event.  

Rob Walling:
Well, this is not tax advice, we definitely wrote off our airplane ticket. I agree. I mean, you and I had three days together just at the beach and downtown Lisbon and the Commerce Plaza. I won’t embarrass myself and try to pronounce the Portuguese name for it. Going up to the castle, St. George’s Castle. It’s my second time in Lisbon, you’re first, but it was such a nice lead up to relax, even though we both had talks to give. Usually what happens is if we take three days to chill out before it’s like, oh, I got to write my talk, oh, I got to work on my talk. But we didn’t, we had them done enough that we didn’t have to worry about it, so.  

Dr. Sherry Walling:
So the setting and the context of the event were really lovely. I think just facilitated an openness and a calm and people’s eagerness to just jump in and be present because it was so inviting. It was just such an inviting venue.  

Rob Walling:
And we changed the format or we continued to lean into the adjustment we started making in 2021, in which we used to do nine talks over two days, and now we do about five talks and with the extra time, it’s all founder connection. We call it founder by founder, where folks have a timer and they meet one another and they have conversations. We had an entire afternoon session that was just outings. You could either do like a walking tour slash scavenger hunt in downtown Lisbon or you could get on speedboats.  

Dr. Sherry Walling:
I heard the speedboats found a submarine, they were surprised by a submarine .  

Rob Walling:
Producer Xander really pulled it out on that one to be able to pull a submarine out of the water. But that continues to be from the attendees in the reviews, in the comments that it’s almost like no amount of time connecting founders is too much.  

Dr. Sherry Walling:
I really celebrate this shift for the MicroConf organization because MicrConf’s always been very focused on strategies and tactics and helping people have the tools that they need to move their businesses forward in the ways that they want to. But when MicroConf started, there wasn’t the sort of barrage of available information that there is now. Now there’s YouTube channels and podcasts and lots of great information for founders about writing marketing company or hiring or any of the kind of technical parts of running and growing a business. 

And I think the talks at MicroConf are still really valuable. You do a nice job of curating them. But what people are really longing for that they can’t get in other places is that face-to-face connection, is making a new friend, making a new contact, having an experience with someone who has a very similar background, set of values, drive. So I think that emphasis on growing relationships is a really, it’s a value add. It’s one of those things that people don’t maybe see automatically as a value add. But when you walk away from an event, probably the most lasting over the course of your life benefit of being in an event like that is the people that you meet and the network and the friendships.  

Rob Walling:
If we were to come onto this podcast and say, “MicroConf, it’s all about just coming and meeting people and hanging out.” And there’s a bunch of introverted, I’ll say a lot of engineers who listen to the show, not solely, but a bunch of introverts.  

Dr. Sherry Walling:
Right, it sounds terrible.  

Rob Walling:
Right? I don’t want to do that.  

Dr. Sherry Walling:
I don’t want to do that.  

Rob Walling:
But I believe people come for the talks and they stay for the community. That’s what keeps people around, because if we just had talks year in, year out with no community, no one would stick around. Speaking of talks and shrinking from say nine talks down to, we’ve done between four and six, and five seems to be the sweet spot. So almost cutting our talk count in half essentially has meant that we don’t necessarily do just tactical talks anymore like, here’s how to write copy, here’s how to do this. It’s so much more about frameworks, things that you can apply to any situation. So higher level thinking than tactics and founder stories. And we usually have one or maybe two founder stories out of five. But the frameworks in this event, I think I was struck by, and there were three right off the top of my head. 

One was Michelle Hanson who kicked us off, she’s the co-founder of Geocodio, and she had, Frameworks For Making Product and Strategic Company Decisions. And she even talked about having a framework and then overlaying another framework on top of it within, it was the business model canvas and laying, I forget her other framework, the Parker framework maybe, inside the framework. And people were kind of mind blown of like, oh, it doesn’t, you can kind of bastardize these things, combine two of them and just do… Whatever framework you have, just use that one, whatever framework you want, use that one but just be consistent with it, was a big part of her message  

Dr. Sherry Walling:
Frameworks on frameworks on frameworks. It was very meta level while also being very applicable. And I think she did a nice job of identifying how people are actually using frameworks, they’re just maybe not recognizing it. And so when you pull the curtain back a little bit and do that metacognitive process of thinking about how you’re thinking, then automatically you have the material for a framework. So it was a very helpful talk. And then you were second, you followed that up.  

Rob Walling:
Which sometimes I’m going in with just a banger talk and I’m like, oh, this is going to crush it. And other times I’m like, I think this is good, but it really depends on how people receive it. And so mine was about the five stages of customer awareness and basically overlaying that over content marketing. And so it was a framework applied to content marketing. Because everyone says, “Do content marketing, create content…” Profit? What happens after that? And at a certain point it clicked with me through some other sources that have talked about it, Powered By Searches talked about it a bit and there’s other people who’ve talked about it, but I had never seen a real deep dive into B2B content marketing through the lens of the five stages of awareness. And the moment that I really believed that the talk was going to resonate is, I got up on stage and I said, “Show of hands.”, Before I said anything, “Who here has heard about the five stages of awareness?” And it was like five people out of 120. And I said, “Ah, this is great.”  

Dr. Sherry Walling:
Got an idea for you.  

Rob Walling:
I was concerned it was going to be like 80%, and I was going to be like, okay, well we can kind of skim through that part. Now the money is in this later part of applying it to content marketing, which I’m guessing most people had not doing. But given that they hadn’t heard about the stages, which are unaware, problem aware, solution aware, product aware, and most aware, given that they hadn’t heard of those, it allowed me to almost meta educate on, here’s a concept and a framework you may have never heard of and now I hope to blow your mind by applying that concept-  

Dr. Sherry Walling:
With some tactics.  

Rob Walling:
To something you’re already familiar with. Yep, that was the mix.  

Dr. Sherry Walling:
Yeah, your talk was really a really nice representation of MicroConf values because it had that big picture framework thinking, and then lots of screenshots and strategies and practical application and examples, which I think people took a lot away from.  

Rob Walling:
As well as a picture of me holding our eldest kid, who’s 17 now and off to college, but I was holding him and when he was like, what? Five months old? Reading C# Business Objects book. And then I flashed to today, and I had used that photo at the very first MicroConf that I had spoken at.  

Dr. Sherry Walling:
Oh, wow.  

Rob Walling:
Yeah, it was in my talk in 2011. It was a couple years… It was whatever, three, four years old at that point. But the thing I was trying to drive home was, A, this is really what this community is about. We are about business, but we also temper it with what’s really important, which is our relationships and our families. But I wanted to also show of, this is how long we’ve been doing this, that this child in this talk from 2011 is now off to college, and that felt… Talk about representing MicroConf, right?  

Dr. Sherry Walling:
You put some reps in.  

Rob Walling:
Yeah. And then day two, well of course there’s a great evening event hangout, happy hour, but day two was kicked off by our very own Einar Vollset who went deep on AI.  

Dr. Sherry Walling:
He did such a nice job of identifying a real world problem and then taking the audience through the process of how you would use AI in an iterative fashion to work out that problem. And it was a fairly technical problem, so not necessarily something that I was deeply familiar with, but the logic made a lot of sense and he sort of showed in real time how you would query AI, what adjustments you would make to get better results based on the query results from the first round. And I found it to be just a really helpful way of thinking about how to use AI as an asset.  

Rob Walling:
Yes. Speaking of encapsulating high level thinking with tactics, that’s what that talk was, right? And it was about, to set the stage for those who didn’t see it, it was about essentially categorizing, if you have this huge list of leads that you want to reach out to, you want to contact, how do you get more information about them? And honestly, how do you figure out what your best leads might be, using AI based on shared traits that they might have with existing leads you’ve contacted that have converted. And so it was a ChatGPT demo of, here’s a big list of CSV of my best customers. And then trying to reverse engineer that and say, now here’s a million email addresses or a million companies, how do you find the best ones out of that? So almost like doing lookalike audiences a bit, but I’m not doing it, I don’t think we’re doing it justice, but I mean it was like 30, 35 minute deep dive into that, and it certainly impacted a lot of folks.  

Dr. Sherry Walling:
People used the mind blown emoji.  

Rob Walling:
I used the mind blown emoji. I was like, “Whoa, this can do this?”  

Dr. Sherry Walling:
You weren’t the only one.  

Rob Walling:
And then we had a Quiet Light, live business valuation, something we’ve never done.  

Dr. Sherry Walling:
So people submitted their businesses and then Quiet Light did a live back and forth conversation with the founder around all of the important metrics that would be considered in valuation, as well as the person’s motivations for selling or just what, they went through the whole your first phone call to a broker about the potential sale of your business.  

Rob Walling:
Yeah, and I thought it was super insightful if you’ve never sold a business to know what types of things they value. And the good part was David Newell with Quiet Light would ask the question, then he would get an answer, and then he would just think out loud and say, “Well, here’s how that’s going to affect valuation. Here’s how that’s going to affect the motivation of a buyer. That’s good or that’s not good. That’s going to impact it positively or negatively.” 

And as you said a little bit about the psychology of it too, and so as he was asking questions, since I’ve sold a few businesses, I was like, “Oh yeah, no, this makes perfect sense.” And then at the end he’s like, “Here’s the range. Here’s about what I think this business is worth.” And that was neat. It was a really nice… And then there was Q&A after that, so it was like a 30 to 40 minute session that I think was probably super helpful for those that have… You don’t sell many businesses in your life, and so if you haven’t done it or you did it poorly the first time, I think this was a nice demonstration of how to think it through.  

Dr. Sherry Walling:
A real-time case study. And again, that emphasis on frameworks, like how to think about this, what are some strategies that help you think about it?  

Rob Walling:
And then we had three attendee talks this year, which is where attendees can submit a topic and get up on stage, and these are 12-minute talks, and I wish we could talk about all of them, of course, but I was impacted by Sophie, thisissophie.com, I think is her domain or her business.  

Dr. Sherry Walling:
This was her first talk on stage.  

Rob Walling:
That’s why I was so surprised by it, because she just-  

Dr. Sherry Walling:
She nailed it.  

Rob Walling:
Crushed it, yep.  

Dr. Sherry Walling:
Her talk was about how to help your company be known for something very specific. So it was a product marketing talk, but it was again, really a framework for thinking about how to nail the one thing that will be really sticky for your company as far as recognition by your customers.  

Rob Walling:
Yeah, it was good. She didn’t use the word positioning I don’t think at all in the talk, but that’s really what it was, is like how do you position yourself and anchor yourself in your prospect’s minds, by doing one thing differently and doing one thing really well? It was a pretty good use of 12 minutes.  

Dr. Sherry Walling:
Yeah.  

Rob Walling:
In my opinion.  

Dr. Sherry Walling:
And there was another attendee talk, I know we don’t have time to maybe talk about all of them, but Johannes put up a slide that I thought was the heart of MicroConf. So help me remember the technicality here, but he put up a slide that showed a graph comparing the projected income that he would’ve made from consulting, beginning in I think 2007, something like that. And he looked at his actual income at that time and then projected it forward, and he compared that to the income generated from the business, the app that he started, and of course it was much lower at first, but then there was this inflection point where his income shifted from being from consulting, dollars for hours, to revenue from this app. 

And it was such a cool just way to look at that shift over time, because for me, that’s sort of the heart of what MicroConf is about, as his income or as his revenue grew with his app, so grew his freedom, so grew his flexibility, so grew his hours spent with his family. And it was a very nice way to tell the story of shifting from something that feels so financially sound and lucrative to this very measured, careful risk over time that eventually also becomes very lucrative. But there’s this middle place of languishing between consulting money and hoping that that app is going to start making enough to cover expenses.  

Rob Walling:
It’s the common story, is the most common story in the MicroConf space. I have a picture of that slide and I will try to get it into the show notes for this episode. But yeah, it was Johannes Akhison, I don’t know how to pronounce his last name, and there was a third line or bar on that graph, it was exactly what you said, and the third one was all the revenue from the product plus the value of the company now. He started mapping out, I think it’s worth whatever the multiple is, and that put him even further ahead that he has this asset that he’s built, it wasn’t just about income. It really was… He put the slide up and you and I looked at each other and you’re like, “That’s it, that’s MicroConf.” That whole slide out, it was great. And then you took the stage, so we have two talks left. You took the stage, talk about frameworks, holy moly. Motivational archetypes, and you threw out, was it six or seven different archetypes of what motivates us as founders?  

Dr. Sherry Walling:
Yeah, I think people often think about motivation is just the emotion to get their work done, and it of course is a much deeper, more complicated story than that. It involves our personality, our life history, elements of what we’re coming to this point in our lives with. And so I pulled together a few different archetypes. One is the money maker, of course, somebody who just is after the money, they want the wealth, they want the security that’s what motivates them and drives them. There, of course is the people person, so the person, the founder who’s really motivated to create an extraordinary experience for the humans around them, whether that’s their employees, their customers. So I went through several different archetypes and I think it was a really interesting talk. My hope was to help people think about motivation differently and to give them some material for self-reflection so that they can better understand what motivates them and then what happens when their motivation is stuck or a little bit dried up, how do we reconnect to motivation? It’s much easier to reconnect to it when you understand it very deeply.  

Rob Walling:
Right, and you coined, I think coined terms, you talked about micro motivation and macro motivation. And micro motivation is the day-to-day, and that’s the cold plunge, Trello board, Pomodoro techniques, get up at 4:00 AM, drink coffee, it’s all the tactics.  

Dr. Sherry Walling:
Get your butt in the seat, do your work.  

Rob Walling:
Macro motivation, you were framing as, but how do you stay motivated over the years that it takes to do this? And that’s what you then focused on. But that concept alone between micro and macro, I think most people don’t think about, because you can put things in place to get you in the seat every day, but man, as you burn out, you can’t do the years, you can’t do the reps. And so I think the archetypes that you came up with are something that we should revisit in a book or in a deep podcast episode or something, because there’s something there, and it allowed people in the audience to say, “Oh, I’m part money maker and part time traveler, where I live in the future.” And able to think to themselves, okay, these are my motivations, I need to hang onto those to stay motivated in the longterm.  

Dr. Sherry Walling:
We also talked a little bit about how motivations change as your company grows, which I think is an important piece of that conversation. It’s not static, it’s really dynamic and it’s an interdependent between who you are and what your company is doing and what your company needs. So yeah, more on that later at some point.  

Rob Walling:
And then our last talk of MicroConf Europe 2023 was from Steven Craven and he told his founder story, him and his co-founder story, of going from launch, to 50K of MRR in a week. And they had an existing audience… The company’s called Stridus and it’s software for personal trainers. They had an existing audience, but it wasn’t huge. It was like single digit thousand emails and I believe maybe 10,000 Instagram followers, somewhere in that 10 to 15,000. But they just did, they executed on a B to C-ish launch with a B to prosumer audience. Really, right? Because personal trainers, I would not say are straight B2B, they’re more like B to Prosumer. Anyways, they just executed really well, and he told the story of them acquiring the business and then having the audience and building, having this amazing launch week.  

Dr. Sherry Walling:
It was a great talk. It was very motivational, very inspirational, helped people see what could be possible. It was also kind of a stressful story, which is also very representative of how these big launches go.  

Rob Walling:
Yeah, he said, he showed a picture of a Porsche 911, and he’s like, I had worked for years, I had an agency and saved and saved to buy that car, and I had to sell it to pay the bills of his company at one point. And it just breaks your heart where it’s like, oh, you could say, oh, poor baby had to sell his nine 11, but he earned that 911, it’s not like his daddy gave it to him, right? He had bought it with his… We know what that feels like to have to make a sacrifice like that. And that’s where MicroConf today, in terms of the content, the talks, focuses a lot on frameworks that can be applied, but also founder stories, and that’s where Steven’s story came in. The other four were about, AR’s was maybe a bit more tactical. And then Michelle, you and I did framework talks that I think are high level and can be applied for years, and I think those frameworks should live on, to be honest.  

Dr. Sherry Walling:
Tactics, strategies, inspiration in relationship.  

Rob Walling:
I mean, that’s it. We covered the four, right? The acronym, S-T-I-R, strategies, tactics, inspiration in relationships  

Dr. Sherry Walling:
STIR?  

Rob Walling:
I know, It’s like the… It really is. I came to Xander with that at one point.  

Dr. Sherry Walling:
You might need to work on that a little bit.  

Rob Walling:
I was like, RITS, SRIT, STIR and he’s like, “Oh.” I was like, “Dude, I feel so bad about having an acronym.” And he’s like, “No, this will actually help us.” He said, even internally, it’ll help the team know what we’re planning events around, so STIR it is. Well, Dr. Walling, really appreciate your time on this early Monday morning.  

Dr. Sherry Walling:
Yeah, thanks for including me in the MicroConf experience. It was a great event. You and producer Xander and your new team member, Sonia, nailed it. You did great.  

Rob Walling:
Thanks. Thanks again for emceeing and doing that amazing talk. And these days, if folks want to keep up with you, you’re putting out some great content on YouTube, youtube.com/sherrywalling, and Sherry is spelled like the wine, as well as sherrywalling.com. Thanks again for coming on the show.  

Dr. Sherry Walling:
Thanks for having me.  

Rob Walling:
Thanks again to Dr. Sherry Walling for joining me on the show this week. She is @sherrywalling on Twitter, I’m @robwalling. If we’re not connected, please give me a follow. Thanks for listening this week and every week. This is Rob Walling signing off from episode 684.