/
RSS Feed
Show Notes
In this episode of Startups For The Rest Of Us, Rob talks with Brian Casel of Audience Ops, about recovering from a 40% decline in MRR. They start the story back in 2016 and work through the decline, audience ops rebound, the start of Ops Calendar, and Brian’s decision to learn how to code.
Items mentioned in this episode:
Rob: Welcome to this week’s episode of Startups for the Rest of Us. I’m your host, Rob Walling. Each week on this show, we cover topics related to building and growing ambitious yet sane and sustainable startups. We realize that starting a company is hard. More than half of being a startup founder is managing your own psychology and much of being a founder is making decisions with incomplete information where the right answer is impossible to find through math or data.
This week’s episode, I talk with Brian Castle about overcoming a 40% decline in MRR and rising from those ashes. This is Startups for the Rest of Us episode 474.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome in building, launching, and growing startups. Whether you’ve built your fifth startup, or you’re thinking about your first. I’m Rob and today with Brian Castle, we’re here to share experiences to help you avoid the mistakes we’ve made.
Welcome back to the show. Thank you for joining me again this week on Startups for the Rest of Us. We have many different show formats. This week is a conversation with someone you’ve likely heard of, Brian Castle. He hosts the Bootstrapped Web podcast with Jordan Gal. And I’ve been listening to that podcast for many years. Hope you enjoy our conversation today.
But before we dive into that, I want to let you know about a MicroConf announcement we’re making this Friday, December 13th. It is by far the biggest we’ve made since launching the conference a decade ago. I really encourage you to go to microconf.com, make sure you’re on the email list. If you’ve attended a MicroConf in the past or you have tickets now, you’re already on the list and you’ll hear about it. But it really is big news and I’m not just saying that to try to sensationalize it or encourage you to go over there. But there’s a lot that’s been going on in terms of the planning of MicroConf for 2020 and we have a lot of new things coming and would love for you to be in the loop on all that’s going on. There’s a lot that’s going to be announced. microconf.com, make sure you’re on the email list.
I enjoyed the conversation I had today with Brian Castle. To set a little bit of the stage, Brian is a frontend designer and UX guy by trade, and then he learned to do some frontend development work. He had been doing a lot of consulting and eventually started dabbling and building products as many of us do. He started at a SaaS app called Restaurant Engine which was originally designed. His vision was for it to be Squarespace for restaurants, but really it evolved almost into a productized service where he had to do a lot of hand holding with the restaurant managers. I think that probably got his gears turning on its software plus service. That offered more value than just straight up building another website builder.
In early 2015, he sold Restaurant Engine for a tidy sum. He talks about that. He said it wasn’t life changing money, but it was enough to go towards a new home. We joined his story at that point where he sold Restaurant Engine and he’s about to start a new productized service. I hope you enjoy this conversation with Brian Castle.
Brian, thank you so much for joining me on the podcast.
Brian: Hey Rob, thanks for having me on.
Rob: Absolutely, man. We joined your story in the middle as I like to say where things are going up into the right. You’ve launched Audience Ops, productized service, and you launched it 2015 and over the course of about the next 18 months, it is all up into the right and you grow from zero dollars in MRR from April of 2015 to 50K of MRR by September of 2016. What was that feeling? Have you ever launched a product that grew that quickly. It’s productized service so it’s not all software, we get it. Have you ever launched anything that had had that much success for that long?
Brian: No, definitely not. I definitely didn’t expect to grow that fast. Looking back on it, it sort of makes sense. Obviously what I’ve learned with productized services is that you can charge a lot more per customer and that helps accelerate the growth rate. If you really nail a market and you’re solving a problem, specific value proposition all that, then I found that growing a recurring productize service like that can really happen. You can grow that revenue pretty fast.
But when I launched it in April 2015, I did not set out to even hit that. The goal was what’s the fastest thing that I can do to get 10K MRR and hit that within two months.
Rob: Right. Like you said, it’s the average revenue per user, a lot of people don’t realize it when that’s $500 a month or $1000, does not take many customers to get you to that 10K, 20K, 30K price point. I’ve seen it with MicroConf companies, with TinySeed companies trying to launch at $20 average revenue per customer app and get to any scale is a very long road even if you have a big audience or have a lot of traffic. Whereas the folks who are plug and away adding two customers a month at $500 average revenue per customer, that’s a grand a month of MRR that you’re growing. It’s a nice base to have.
Brian: Yeah. Audience Ops has, for the most part, been between $1000 and $2000 a month in terms of average per customer. I think it’s great to be able to grow a service like that so quickly. It has some downsides to it too when you’re charging that much because you just see crazy swings in MRR. You can add just a couple of customers, lose just a couple in a week and you’re seeing swings in 5K or 10K MRR. That can really screw with you.
Rob: Right. Stuff we won’t dig into here is you’ve talked a lot about productized services, there are pros and cons to them, you can grow quickly as you’re saying the price points are high and that’s great. Obviously the cons are hey, it’s not as easily scalable as pure software. You do have to hire staff. 50K MRR SaaS company might have 3, 4 people working on it. And a 50K productized service probably has a team of 15 or more. There’s pros and cons to this.
But the thing that’s cool is you launched it and 18 months later, obviously there was a lot of work that you had to do but you have this 50K MRR business now that’s supporting you because after you exited your prior app restaurant engine, I imagine you didn’t want to sit and burn through that cash. You mentioned to me offline that in 2016, you actually spent most of your restaurant engine money on a new house.
Brian: Yeah, that’s right. It wasn’t a life changing exit or anything, but it was a chunk of cash. I looked at that and I really thought about what is going to be in my next business to replace that income. I wanted to get into SaaS software right then in 2015. I looked at a few ideas, but the thought back then of basically burning all of that cash within a year and then maybe getting somewhere close to 10K MRR, which was a big maybe. That kind of scared me.
That’s what lead me to start looking at I kind of know productized services fairly well at this point. That seems to be the fastest way to get to a viable recurring revenue source to then free up my time. Obviously, a lot of work goes into building the team and the systems to remove myself, but that’s always been the goal with the service companies is to grow the cash flow to fund my time to work on stuff.
Rob: You’re a 50K MRR with Audience Ops, it’s fall, September 2016. Since everything is going up into the right, you’re feeling great, you already had two full time W-2 people, you turned 2 more people, they were contractors, you put them on salary and then you started looking at launching the SaaS app. You’re starting to build OPS Calendar. You did some validation there and started upping your expenses. What was the thought process there?
Brian: Right around that time, I guess it was around September into October, I had the idea for this software called OPS Calendar at the time, it was like an editorial software calendar with some process stuff built into it. You can automate content processes and things. Essentially, that was the precursor to my product today—ProcessKit. But back then, that’s what I was doing. At that point, I didn’t personally have the ability to just build an app myself. I‘ve always been a frontend developer and a designer, not a backend. It would definitely require outsourcing and hiring developers to build the functional app.
I did some presale, I got 10, 13, 14 people to prepay based on the idea and a promise that they will someday use this idea. That, combined with the growth rate on Audience Ops, and I had some profit saved up at this point. Okay, I’m good with spending around 5K a month on an outsourced developer and that turned into two or three guys overseas that I was working with.
Rob: Since we didn’t cover it before, could you give people just a two sentence explanation of what OPS Calendar, what it is and the purpose it would serve if it had made it to market, so to speak.
Brian: The idea with OPS Calendar, it was essentially an editorial calendar software with some production process stuff built into it. You and your team can build a process for how you produce blog articles, and podcasts, and social media, and map all that stuff to a calendar to see who needs to do what by when and also to schedule blog posts and social post to the calendar.
Back then I was running Audience Ops which is a content service, we do blog content as a service so obviously it was born out of that. That was essentially the idea with OPS Calendar at the time.
Rob: Yeah, cool. There’s a six months chunk where really from November of 2016, right after you ratchet up these expenses, things hit the skids with Audience Ops. I think this is one of the tough parts of your journey, it seems like. You want to walk us through the timeline there, what happened?
Brian: We’re three years later now and this is still one of those periods of time that I still look back on. Like, “Man, that was painful.” What happened was basically that growth from Audience Ops, 0-50K, that started to plateau right around October, November into the holidays and then started to decline through the holidays, in the January, February into about March or April is when it started to finally turn back around. It was painful on a number of fronts because it coincides right at the time that I decided to start spending a lot of extra cash on developers and employees all at the same time. There was that part of it.
And then it was also just like, “Why is this happening?” Everything was growing just fine up until that point. What is causing the reduction in leads or the increase to churn, it was probably a combination of both. I was looking at it in a thousand different angles to try to uncover what was actually causing it. It’s still unclear to me to this day. I have a few ideas, some hunches of what it could have been. But when you’re in it and you’re trying to fix it, you just don’t know what exactly is broken. It’s really frustrating.
Rob: Absolutely. That’s devastating. 40%? That’s a huge drop. 50K down to 30K. That’s a lot of salaries, that’s probably all your net profit on this thing. I’ve seen SaaS apps plateau, I’ve seen them right over the top, so to speak, when they start to decline. But I’ve never heard of a drop that fast that wasn’t due to some big platform risk. Like, “Hey, I’m integrated with Shopify and they just completely cut off our access.” Or, “I’m a Twitter client and they cut the API.” Or a Google change. Something that was just decimating.
But just to have that happen seemingly out of the blue, it sounds like, and three years later not have been able to pinpoint what happened, must have been terrible. It sounds like it went on for five months and you were just trying to fix it this whole time. Is that what it was?
Brian: Yeah. There are a few things. It was probably a combination of things that I look back on. One was in summer 2016, it was the first time that I hired a sales person for Audience Ops. There was somebody on the team, actually still on the team today, and I put that person into a sales role to remove myself from the sales. That was one remaining jobs that I was still doing in Audience Ops, the team was handling other stuff. It’s not any fault of his, he actually did a really great job of closing a lot of accounts that summer. Bringing out a lot of clients, but a lot of those clients that he sold and closed churned a lot faster than other clients have come on.
I take that as my fault for the training, maybe some of the compensation structure that I really didn’t structure and situate to have a sales person really set the right expectations for customers. Basically the way that I do when I do sales calls for Audience Ops is for me, when I do it, it’s really about let me tell you exactly what’s happening in Audience Ops and almost talk you out of signing up for Audience Ops to make sure that you’re really on board for this. There’s that, we just saw a string of cancellations.
Then the holiday season hit and that slowed down. It was weird because the previous holiday season was actually a pretty big spike in growth for us, but it didn’t happen in 2016. In January, now we’re in the thick of this six month period where sales are stalling, we’re seeing this churn. I go away to the Philippines, my wife has some family there. We were there for a whole month. My plan was to work a little bit while we’re there, but it’s a completely different timezone and that means I literally could not do any sales calls. Even the leads that we had, I couldn’t really even talk to them. Combine that with terrible WiFi while I was there. That was stressful as well.
Rob: How did that manifest itself? What was the peak moment or a moment you can remember where you lost your **** or you were feeling extremely mad about it?
Brian: Anyone who knows me, I am really pretty level headed, I think. I tend to compartmentalize pretty well. Poor sleep, bad eating habits and exercise and all that definitely starts to pile up. Because it’s like I could go exercise today, or I could keep working and try to fix this thing. That was a choice every single day.
Rob: Right. You just dug in and just grinded it out, I shall say. Probably took a toll on your body and mental well being, too.
Brian: Yeah. Into March, April 2017 is when things started to turn around. It’s almost like I don’t really know because it wasn’t a sudden turn around either. It took all of 2017 to dig back out and back up to where it was. But, we definitely improved a lot of things. That was when we really improved the new customer on boarding process heavily. Again, to reinforce those expectations. That I think had a really big impact on customer retention. If they have a really fantastic first month with Audience Ops, they’re really likely to stay on for a year or more at that point.
I worked on some new marketing stuff during that time and some new content, some webinar stuff. I think that seemed to help as well.
Rob: It’s something I talk a lot to entrepreneurs, especially new entrepreneurs don’t understand that they’ll see someone who’s built a business up to 10K a month. You may be able to sell that for $250,000 or something, there’s all these factors. But whatever, you can sell it for quite a million dollars. But people will say, “Why wouldn’t you just keep that? Just keep it and keep running on the side. It’s only three hours a week or five hours a week. Just keep running it.” Usually, there’s a couple of reasons, one because distraction is distraction and there’s opportunity cost to that. But the bigger one is that none of the businesses we have run on autopilot for years. They always get smacked around by something. Sometimes it’s Google, and sometimes it’s a competitor, and sometimes it’s platform risk, and sometimes it’s something you never would’ve guessed, it’s a key employee quitting, it’s something that you have a tough time identifying like what happened with you.
Then you have to shut everything down, stop doing what you’re focused on, and you have to turn your focus back to this thing that you’re tired of working on anyways. At a certain point, eventually, you give in. I’ve done this with multiple businesses and I’ve seen people do it as well, where you’re just like, “Forget it. I just got to sell this thing. I got to get it off my plate.”
Brian: Yeah. It hasn’t really come to that point in Audience Ops, but I can definitely say that there have been times. This period in 2016 was definitely one of those where it was like my mindset is trying to get this brand new idea for a SaaS off the ground. It wasn’t even in existence yet. It was just like get this thing to market. That was my number one goal. Working with developers, I’m paying for developers. I want that to happen as soon as possible. And then I have to stop and work on this churn problem in Audience Ops. Yeah, that was pretty painful.
Rob: We’ll talk in a second about how essentially you did turn that around through 2017. But I’m curious, that low point, this five, six months where things from November to March, April, when they are just in the thrawf and you can’t dig it out. You said that’s still a point that you remember very vividly. I have moments like that in three, four, five months period as well. I learned a lot from them and they impact the way that I do things today. They impact the way that I think about business and the way I ran my apps after that. I’m curious, what lesson or lessons did you take away from that? That impact the way that you make decisions.
Brian: I found that there are one or two of those points in my career so far that I can look back on, that I feel like really influenced the way that I work today. I think in some ways that’s a good thing and in some ways, I do things to a fault today to try to prevent that from happening again. On the positive side, I’ve been through enough of those ups and downs in the MRR graph to know that no matter how well something might be going today, I still have to play it extremely conservative.
We’re like three years out from that, Audience Ops is actually doing really well and I have a profit savings saved up that I’m able to deploy on new products and ProcessKit and things like that. But I’m actually hesitant to spend anything. Because it’s like just keep the reserves in check just in case, you really never know. You look at the news, the economy and stuff. I look at things almost afraid of what could happen.
Tactically, on the sales side of it, I talked about how that period I had a salesperson and then there was a string of churn that came in the months after that. That has caused me to really delay and delay on trying to put a salesperson in place again on Audience Ops.
I’m actually now doing that finally in the end of 2019 with a new strategy behind it and some new structure, but it took me three more years. I have removed myself from every other aspect of Audience Ops. I really spend less than two hours a week on this business, but those two hours are doing the sales calls. Because I just want to make sure that that message is being sent to new customers as they get on. I’m finally coming around to being okay in letting that role go.
Rob: That makes sense. I was going to ask, obviously, if you brought a salesperson and it didn’t work out, you had to turn the app around but after that, I would think that if you do want to get that sales, you would just try and try again. Most sales people don’t work out. The first one you find, frankly, more of the first VAs that I find, the first one almost never works out. So I just hire one, two, three, four and it’s frustrating and it takes time, but eventually, you find someone and then you’re able to let it go. Is that where you’re at now? Is that something you’re looking at doing, trying again and stepping away?
Brian: Yeah. I’m trying again because I think it will actually help impact the business, growth, and the overall health of the business to get me out of that role. Speaking about it now in 2019, I just have a lot more space to breathe. Financially and time wise and so many more things inside the business are more optimized now than they were back then. The on boarding stuff is really locked in, things like that. I just think it’s probably a better time to try to get that off my plate now than it was.
Again, things did start to turn around in 2017, but it took all of ‘17 into the beginning of ‘18. ‘18 was really when I finally got my bearings back in terms of having some space to play with.
Rob: Right. It sounds like it, and that April 2017 point could have been celebratory because you’re bringing your first paying customers in for your SaaS up OPS Calendar, but your financial runway was basically gone. You had to turn around over the next six, seven, eight months. What were a couple steps that you took, it was all hands on deck at that point, right? We’ve lost 40% revenue, we’re still declining at this point. What were some steps you took to turn this around and get out of the tailspin?
Brian: Just to be clear, there’s two parallel products in play here. One is Audience Ops which is in the site crisis mode, and then OPS Calendar which is trying to get off the ground but then I would have to pause, paying for the developers, right at these critical moments as we’re bringing these new customers on to the software. I just didn’t have the cash to fund for the development and couldn’t move fast and all that stuff. That was really frustrating.
But with Audience Ops to start to turn it around, I did a number of different things to try to attack the problem from different angles. One was that new customer on boarding again. I worked with my team a bit to see how can we just make sure that customers are really happy after their first month and that clearly has had an impact on improving churn over time. Just focusing on retention. I think that also helped with customers like referring other leads to us, that has that side effect too.
I did work on some new marketing materials. A whole round of new content, I think I did a recorded webinar that I put into the marketing system at that point, worked on the email automations that helped to nurture. I just went through the whole funnel. Everything that leads and customers see as they find out about Audience Ops, as they go through the sales process, as they get educated and nurtured and on boarded. I tried to improve every step of the funnel over that in early 2017.
Those are the kinds of improvements that you just don’t see moving the needle overnight, you just do that work then maybe a few months later things start to improve.
Rob: Right, and it worked because you turned it around over the next six or eight months.
Brian: I think it has definitely returned to where it was and has grown beyond that but it doesn’t really see the growth rate that it saw in that very first year. But I think that’s sort of a natural slowing down that a business sees. At least I’ll see it that way.
Rob: Yeah. It’s hard to say without going out and really beating the bushes and trying to generate a bunch of leads and doing cold outbound, focusing on SEO or running ads, there’s a natural threshold that always sets in. It seems to me like you’ve always been cool with that plateau because that plateau provides you with a full time income budget to build other apps which is really what you want to do. That’s your lifestyle choice.
Brian: Yeah, exactly.
Rob: They were working on OPS Calendar, your developers were, and you got your first paying customers in April and then you had to pull them off because you didn’t have the money, and then in July in 2017 you’re able to get them back to work on OPS Calendar, and then you get a little bit of traction right that latter half of 2017 but you never found product market fit with OPS Calendar. By February of 2018, you were still trying to push it forward, but some calamities happened. It sounds like there was a code base thing you want to talk us through what it was like dealing with that.
Brian: Throughout that year of 2017, it was trying to bring those first customers on and got a few handful of paying customers, but over the summer there whatever savings I had was gone from that period of Audience Ops. I’m not one of these people who just goes crazy on the credit card. Once I see a little bit of balance on there, I’m just too risk averse and debt averse to really go too heavy on that. I just pause and I don’t really spend until I have the cash in the bank account. I had to pause those developers over the summer which really, really hurt because I felt like it was at a critical time.
As we get into 2018, I went on a trip and we had been pushing off this upgrade from Vue one to Vue JS. At the time, I wasn’t a developer, I didn’t even really understand what Vue was. The developers chose that framework. That upgrade broke everything. I came home from that trip looking at a situation where I could pay those developers to go fix every single feature that I had just paid them for the last 18 months to build. Essentially, spend all that money and all that time again to rebuild the app, which was not going to happen.
It was also we’re having a hard time converting these customers, even a lot of the early prepaid customers didn’t end up continuing on as full customers. That said to me you know what, this thing isn’t really right. Because we have a process feature in OPS Calendar, and people were using that side of it and they were not touching the social media calendar stuff. That was also a signal to me that really the product that I deep down wanted to build was more of a process oriented tool.
Here I am in early 2018, probably going to “pivot” the product, if you will, to something else. Probably a new name and everything. I’m having a problem with these developers, but at that point I just decided to just stop everything. Just pause all work on OPS Calendar, take a month and figure out what I’m going to do. My conclusion was that I’m done with being limited by not being able to build apps myself. As a designer and front-end developer and product person, I’ve always felt, and this really brought it to a head was this experience with OPS Calendar, I’ve always felt this frustration that I can’t move fast enough because I’m always waiting for the developers to finish a feature. Sometimes I can’t move at all because I don’t have the cash to pay developers.
Let me bypass that by investing my time in learning back in development. I learned Ruby on Rails. I basically decided all of 2018, I’m going to use all my full time hours to make myself a full stack developer. I know I won’t be a very good one, but at least I’ll be able to take any idea and build it into a product and bring it to market, and that’s essentially what I do.
Rob: You were just about 18 months into OPS Calendar and I’m going to guess tens of thousands of dollars paying developers. You put on maintenance mode. You effectively shut it down. What was that decision like? How hard was it for you?
Brian: I think it was somewhere around $30,000 or $40,000 that I put into over that period of time. It sort of sucked, but it was also I don’t really have any other option here. I’m not going to just keep spending on something that’s clearly not working. I knew that the tech underneath the app, they technically built the features that I designed and speckled, but there were underlying architectural issues that I could just feel as a user.
That was another reason moving to let me just try to build it myself because at least I could design the thing from the inside out the way that I feel like it should be built. It was hard, but it was also I’m moving on. At that point I was also really excited about this idea for what the next version is which became ProcessKit, which is what I’m working on today.
Rob: I’m curious, deciding to learn to code from scratch, you’ll often hear folks send questions in to this podcast and say, “Should I learn to code if I’m going to watch a SaaS app?” The answer’s always it depends. Do you think that’s something you’re interested in? I would at the minimum learn to code well enough to know if the developers are trying to pull one over on you so you have a concept, you can talk to them. I don’t write production code anymore myself, but I wrote code professionally for 10 years.
I can still have architectural conversations. When Derrick and I were building Drip, I could go pretty deep on the tech stuff. It’s an asset to have for sure. But I’m curious, instead of learning to code, why not launch another productized service? Because you seem to be good at them, they seem to work out for you. Audience Ops is obviously successful and profitable. Why continue to seek after something that is showing you so much resistance in essence, which is a true software base SaaS app?
Brian: Number one, I’ve always been interested in software. I’m not new to software today. I’ve been working on it in different forms for many years. That has always been my number one interest in terms of what I want to create on the web. I’ve been building on the web for over a decade. That’s really always been where I’ve been heading with this. Even since I started Audience Ops, yeah I worked very hard on building it and building the team and the processes, the systems and everything. It’s always been with the end goal in mind of removing myself so that I can fund my time to work on software.
Like you said, the scalability aspect. Yes, I believe a service company can run without you and be profitable without you in the day to day like it is for me, but it’s clearly not as scalable as a SaaS that has hit product market fit and has that growth. Just in terms of the value of an asset and all that.
Also, I just wanted to go back to what you’re saying about the decision to learn to code or not, I agree with you. In many cases, it may not be the smartest choice, or maybe you should just learn a very light understanding of it so that you can communicate with developers. I think there are few caveats that made my situation a little bit unique from where most people are that I come across at least.
Number one, I’m not starting from scratch. I had been a frontend HTML, CSS, little PHP, little JavaScript work. But professional level frontend stuff for years. Building websites, doing a lot of work with advanced WordPress stuff, working on major websites for agencies and things like that. I was not completely new to basic coding and programming. I just never really learned a back end stack like Ruby on Rails, and working with databases and things like that.
There was that. That gave me a head start. And then the other thing is that I had the time. I really have full time hours to throw at this. If I didn’t have that, if I was doing this nights and weekends, I don’t think it would be possible to make as much progress as I did over the last now almost two years. I don’t think I would have been able to really make a lot of progress with it if I couldn’t work on it full time every day.
Rob: Right. You had a lot of time to focus and it was something that as you said, you already had a basis for.
Brian: And I had a lot of help too. A lot of my close friends are software developers, Rails developers, I had of people that I could turn to for support and they’ve been super helpful.
Rob: Totally. That’s the thing. You’re in the developer community already even if you’re more of a frontend developer/designer. It’s like you live in that world and it’s not such a far stretch to be like, okay, I want to go one layer deeper and see how it interacts with the service side code. Cool.
That takes us to spring of 2018. Audience Ops is back, profitable, and you were able to free up your time and spent most of 2018, as you said, learning Rails. What was the most surprising part of that experience of taking that six or eight months and digging into service side code and learning to build your own software top to bottom for the first time?
Brian: In the early months, I knew that it would be a very big effort and that it would take me a long time to get decent at it. It was a little bit frustrating going through tutorials and courses and then still not quite being able to build anything real yet, but then just hacking away at it a little bit more for another month or two and then I can build something very simple.
Over the course of 2018, I went through a bunch of courses, I worked with a coach which was very helpful, and then I did some throwaway practice project apps. By the end of that, I was able to put together a simple app called Sunrise KPI. That was the first real app that I’d built.
I should mention that the idea for ProcessKit I had throughout 2018. I bought the domain. I spent some money on that domain. I was putting sketch ideas for what ProcessKit would be, but I also knew that I wasn’t capable of building it yet. I had to get those skills up and it wasn’t until the end of 2018 I had felt confident in actually starting to build what is now ProcessKit.
Rob: Yeah. If someone’s listening to this and they are thinking about themselves learning to code, what would be a piece of advice, either a warning or just a hey, do this, this is what really worked for me, this is what fast tracked me.
Brian: Early on, I definitely wanted to stay away from the newest, trendiest, most complex frameworks, especially like the JavaScript frameworks and stuff. I’m sure there’s plenty of technical benefits to those, but I wanted boring, tried and true, non trendy stuff. It came down to a decision between Ruby on Rails or PHP in Laravel.
I went through a couple of weeks with PHP Laravel, some tutorials. I could follow along with those, but then I found I couldn’t take what I’d learned and go build something simple. I went through a one on one course on Rails. I did a month on PHP in Laravel and then a month on Rails. I found that at the end of the month on Rails, I was able to take that and build something simple. I continued to double down on Rails from there.
I went through a number of courses on that. Tip number one is to stick with something like Ruby on Rails, or PHP with Laravel. Something that has a huge developer community with tons of resources and educational stuff. That’s a big number one. Number two is to try and find mentors. I go to friends like I talked about. I paid a couple of people for paid mentorship for a while and I’ve learned to code in Rails developer communities, I go to that for some help as well. I frequently talked with friends about code questions. I hit up codementor.io quite a bit when I really get stuck.
Rob: Sounds cool. You mentioned ProcessKit which we haven’t really covered in this conversation. You want to tell folks what that is? Is it the next generation of OPS Calendar done in the way based on your learning from the first time?
Brian: At this point, the way that it’s positioned is that it’s really a projects tool. It kind of like a project management software, but it’s process driven. If your projects really follow the same script every time, they’re very repeatable and you’re doing a lot of the same stuff, whether you’re onboarding customers to a service or to a SaaS or something like that and you need your team to follow a certain process, that’s really where ProcessKit comes in. It’s different from the project management tools where you might run your tasks and projects in one of those tools, but you have your documentation, your SOPs over in a silo somewhere else. That’s where those kinds of operations tend to fall apart, the team just never really follows the SOPs.
ProcessKit sort of brings those together, and then also builds in automation steps. You can say if this then that, if it is is this type of project then assign these tasks to these people, calculate these due dates, and link up with Zapier and all that kind of fun stuff.
Rob: Cool. Where is that project in terms of launching? This is the part of the interview where I ask you questions I already know the answer to. What status is ProcessKit at right now?
Brian: It launched, it has customers. I’ve been doing the slow launch things over the past really throughout ‘19. I think I started on boarding the first customers around June, the very first ones. Today, we’re in November. I’ve been sending early access, invites pretty regularly since then. It was up on Product Hunt about two weeks ago and now it’s out there.
Rob: Is it everything you wanted and more to own a SaaS app? Is it just growing up into the right by itself? You make money while you sleep? I was going to say is it back to the same slug as OPS Calendar, but I don’t think it is. This time really is different. I get the feeling that there is more potential here. Is that pretty accurate?
Brian: First I heard your interview with Jane Portman this morning and I completely relate to that, probably so many other early SaaS founders with the long slow SaaS ramp of death. It’s real.
It’s very slow and the revenue is nowhere new replacing the income that I get from Audience Ops. But yeah, it’s less than a year in, and it does have more customers now than OPS Calendar did. It resonates with people a lot more, the problem and the solution, and the positioning. At least with my audience, the people that I’m connected to. But it’s early on. It really just launched a couple of weeks ago. Now that the new website is up, I’m starting to kick into gear. That shift away from just going to the early access list to actually marketing this thing and getting new traffic and new leads and that sort of stuff.
Rob: Now the real work begins is what I like to say. Getting to launch is like 30% of the journey. That’s where folks who are listening, we could do Startups for the Rest of Us drinking game where like if you get to launch and you don’t have some type of launch list that you’ve been building, then you have a problem. That’s the first base or the first quarter of the journey. And then now you’re launched and now the real work begins. That’s where it’s like you probably don’t have product market fit yet.
Now, I’m going to spend the next six months figuring that out as I grow very slowly. Then, you do get to product market fit, now I need to find a sustainable source of leads when it’s relatively scalable. Then you spend the next 6-12 months figuring that out. That’s why it’s the long slow SaaS ramp. These things are in stages and it’s truly the Cinderella stories that don’t have these steps in this order. It’s always a grind.
Even the Cinderella stories, like I said, there are no Cinderella stories, but even the ones that we look at and say, “Oh my gosh, that grew so fast.” It was a complete grind behind the scenes. This is never easy.
I wish you the best of luck with ProcessKit, because it’s essentially a second iteration of a SaaS app. You’ve obviously fought very hard for multiple years to get this out. This is something you really believe in. You can tell that it’s not an opportunistic product. It’s like I’m going to ship dog food to people on the internet because I could make money. You’re building this because this is something you need and you believe in. I hope that you’re able to make it work.
I think longer term, if for some reason it doesn’t work out, would you build another SaaS app again or would you consider doing a productized service?
Brian: At this point, I am pretty committed personally to doing software whether that’s ProcessKit or another idea or several other ideas, I’m pretty focused primarily on ProcessKit right now. I would use the productized service model if it came to that. No, I should say that I’m actually still using the service model in many ways. Obviously there’s Audience Ops that continues to grow, but even in ProcessKit, now we’re launching a Done with You process service to help you and your team improve and audit your processes, get you set up on ProcessKit as a paid service. That’s sort of like a productized service built on the software, which I really love that model.
You asked about how is it. For me right now, in that slow grind on ProcessKit, I’ll be honest, I’m really loving it. I’m really loving doing everything from the design to the code and talking to customers every day because being able to talk to customers and then literally iterate on the feedback that I got on the feature that I could ship by the end of the week, that just feels so empowering. I know that it won’t be forever, but at this point, Audience Ops is back to growth and profitable in steady state and a really amazing, fantastic team that I have that space to breathe now. I’m not worried about having to cut off the development cycles because of cash flow or things being built in the wrong way or things like that.
Rob: Yeah. There’s definitely a luxury to being able to control that whole pipeline, the manufacturing pipeline. Like I said, I don’t write code anymore, but when I was getting started all the way through Drip, everything before that, I wrote at least some code. Even if it was just maintenance, even if it’s just tinkering here, it was just tweaking. Because finding developer to make a three line code change in PHP or Cold Fusion or classic ASP or .NET or any of those things, it’s a huge amount of work to find someone just to do that. If you know the basics of code, to then just learn, I didn’t know some of those languages but I picked up a book or I went on Stack Overflow, whatever and you Google it, and you’re like, “I’m going to make this change and see if it doesn’t break anything.” If it doesn’t, it’s like wow, I just saved myself like a week of recruiting someone just because you know how to do the basics.
It cuts both ways. I think then you can also get mired in it and then you’re not working on the things you should be and that’s where as we started Drip originally, Derrick said, “Hey, I want to build it on Rails.” I said, “Cool.” Originally I was going to learn Ruby but eventually I said, “You know what, I actually think I shouldn’t because I will get into the repo and start tweaking things. And I should be talking to customers, I should be building processes for this business, I should be doing all the other things that don’t involve the coding.” There’s a point where that makes sense. And if obviously for building a venture backed startup and you’re raising money, you probably shouldn’t be the one digging into the code. Maybe someone on your team is. But there’s a balance there.
But that’s not what you’re doing. You’re building something that you want to build, that you want to exist in the world, and you’re willing and able to take it slow and that gives you a luxury.
Brian: Taking it slow, I’m as impatient as they come with things. I constantly want to move fast and execute and ship something new every single week. But bigger picture, that what’s this podcast and MicroConf and everything is all about. It’s about embracing that slow model of taking your time and making sure that things are done right. I’m all about it.
Rob: That’s right. Ambitious founders who want to build interesting things, build sizable business but are not willing to sacrifice their lives, their health, their relationships, whatever it is, even in your case, it’s a lifestyle that you don’t want to sacrifice to do it and that’s what it’s about. It’s about retaining that control.
Brian: 100%.
Rob: Thanks so much for coming on the show, man. If folks want to keep up with you, and they like the podcast, they should search for Bootstrapped Web, podcast you release every week or two with Jordan Gall. I’m a listener, have been for years. If they want to keep up with you on Twitter, you are @casjam and of course processkit.com is where your SaaS app lives. Any other places folks might want to look out for you?
Brian: Audience Ops is still kicking. Great team over there. Yeah, you hit it. That’s it.
Rob: Sounds great. Thanks again, man.
Brian: Thanks. Thanks, Rob.
Rob: If you have any questions for Brian or myself after hearing this interview, I’d love it if you would tweet me @robwalling or send a question into questions.startupsfortherestofus.com and I would be glad to have Brian back on the show to answer questions you have about any of his experiences, or productized services, or anything else that you feel like he could lend some insight into. If you have an unrelated question for the show, you can leave me a voicemail at 888-801-9690. Or you can always email us questions.startupsfortherestofus.com. You can find us in all the podcasting marketplaces and directories, just search for Startups.
If you’re interested in the full transcript or to make a comment on an episode, just hit up startupsfortherestofus.com. This was episode 474. Our theme music is an excerpt from We’re Outta Control by MoOt, it’s used under Creative Commons. Thank you for listening, and I’ll see you next time.
This week’s episode, I talk with Brian Castle about overcoming a 40% decline in MRR and rising from those ashes. This is Startups for the Rest of Us episode 474.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome in building, launching, and growing startups. Whether you’ve built your fifth startup, or you’re thinking about your first. I’m Rob and today with Brian Castle, we’re here to share experiences to help you avoid the mistakes we’ve made.
Welcome back to the show. Thank you for joining me again this week on Startups for the Rest of Us. We have many different show formats. This week is a conversation with someone you’ve likely heard of, Brian Castle. He hosts the Bootstrapped Web podcast with Jordan Gal. And I’ve been listening to that podcast for many years. Hope you enjoy our conversation today.
But before we dive into that, I want to let you know about a MicroConf announcement we’re making this Friday, December 13th. It is by far the biggest we’ve made since launching the conference a decade ago. I really encourage you to go to microconf.com, make sure you’re on the email list. If you’ve attended a MicroConf in the past or you have tickets now, you’re already on the list and you’ll hear about it. But it really is big news and I’m not just saying that to try to sensationalize it or encourage you to go over there. But there’s a lot that’s been going on in terms of the planning of MicroConf for 2020 and we have a lot of new things coming and would love for you to be in the loop on all that’s going on. There’s a lot that’s going to be announced. microconf.com, make sure you’re on the email list.
I enjoyed the conversation I had today with Brian Castle. To set a little bit of the stage, Brian is a frontend designer and UX guy by trade, and then he learned to do some frontend development work. He had been doing a lot of consulting and eventually started dabbling and building products as many of us do. He started at a SaaS app called Restaurant Engine which was originally designed. His vision was for it to be Squarespace for restaurants, but really it evolved almost into a productized service where he had to do a lot of hand holding with the restaurant managers. I think that probably got his gears turning on its software plus service. That offered more value than just straight up building another website builder.
In early 2015, he sold Restaurant Engine for a tidy sum. He talks about that. He said it wasn’t life changing money, but it was enough to go towards a new home. We joined his story at that point where he sold Restaurant Engine and he’s about to start a new productized service. I hope you enjoy this conversation with Brian Castle.
Brian, thank you so much for joining me on the podcast.
Brian: Hey Rob, thanks for having me on.
Rob: Absolutely, man. We joined your story in the middle as I like to say where things are going up into the right. You’ve launched Audience Ops, productized service, and you launched it 2015 and over the course of about the next 18 months, it is all up into the right and you grow from zero dollars in MRR from April of 2015 to 50K of MRR by September of 2016. What was that feeling? Have you ever launched a product that grew that quickly. It’s productized service so it’s not all software, we get it. Have you ever launched anything that had had that much success for that long?
Brian: No, definitely not. I definitely didn’t expect to grow that fast. Looking back on it, it sort of makes sense. Obviously what I’ve learned with productized services is that you can charge a lot more per customer and that helps accelerate the growth rate. If you really nail a market and you’re solving a problem, specific value proposition all that, then I found that growing a recurring productize service like that can really happen. You can grow that revenue pretty fast.
But when I launched it in April 2015, I did not set out to even hit that. The goal was what’s the fastest thing that I can do to get 10K MRR and hit that within two months.
Rob: Right. Like you said, it’s the average revenue per user, a lot of people don’t realize it when that’s $500 a month or $1000, does not take many customers to get you to that 10K, 20K, 30K price point. I’ve seen it with MicroConf companies, with TinySeed companies trying to launch at $20 average revenue per customer app and get to any scale is a very long road even if you have a big audience or have a lot of traffic. Whereas the folks who are plug and away adding two customers a month at $500 average revenue per customer, that’s a grand a month of MRR that you’re growing. It’s a nice base to have.
Brian: Yeah. Audience Ops has, for the most part, been between $1000 and $2000 a month in terms of average per customer. I think it’s great to be able to grow a service like that so quickly. It has some downsides to it too when you’re charging that much because you just see crazy swings in MRR. You can add just a couple of customers, lose just a couple in a week and you’re seeing swings in 5K or 10K MRR. That can really screw with you.
Rob: Right. Stuff we won’t dig into here is you’ve talked a lot about productized services, there are pros and cons to them, you can grow quickly as you’re saying the price points are high and that’s great. Obviously the cons are hey, it’s not as easily scalable as pure software. You do have to hire staff. 50K MRR SaaS company might have 3, 4 people working on it. And a 50K productized service probably has a team of 15 or more. There’s pros and cons to this.
But the thing that’s cool is you launched it and 18 months later, obviously there was a lot of work that you had to do but you have this 50K MRR business now that’s supporting you because after you exited your prior app restaurant engine, I imagine you didn’t want to sit and burn through that cash. You mentioned to me offline that in 2016, you actually spent most of your restaurant engine money on a new house.
Brian: Yeah, that’s right. It wasn’t a life changing exit or anything, but it was a chunk of cash. I looked at that and I really thought about what is going to be in my next business to replace that income. I wanted to get into SaaS software right then in 2015. I looked at a few ideas, but the thought back then of basically burning all of that cash within a year and then maybe getting somewhere close to 10K MRR, which was a big maybe. That kind of scared me.
That’s what lead me to start looking at I kind of know productized services fairly well at this point. That seems to be the fastest way to get to a viable recurring revenue source to then free up my time. Obviously, a lot of work goes into building the team and the systems to remove myself, but that’s always been the goal with the service companies is to grow the cash flow to fund my time to work on stuff.
Rob: You’re a 50K MRR with Audience Ops, it’s fall, September 2016. Since everything is going up into the right, you’re feeling great, you already had two full time W-2 people, you turned 2 more people, they were contractors, you put them on salary and then you started looking at launching the SaaS app. You’re starting to build OPS Calendar. You did some validation there and started upping your expenses. What was the thought process there?
Brian: Right around that time, I guess it was around September into October, I had the idea for this software called OPS Calendar at the time, it was like an editorial software calendar with some process stuff built into it. You can automate content processes and things. Essentially, that was the precursor to my product today—ProcessKit. But back then, that’s what I was doing. At that point, I didn’t personally have the ability to just build an app myself. I‘ve always been a frontend developer and a designer, not a backend. It would definitely require outsourcing and hiring developers to build the functional app.
I did some presale, I got 10, 13, 14 people to prepay based on the idea and a promise that they will someday use this idea. That, combined with the growth rate on Audience Ops, and I had some profit saved up at this point. Okay, I’m good with spending around 5K a month on an outsourced developer and that turned into two or three guys overseas that I was working with.
Rob: Since we didn’t cover it before, could you give people just a two sentence explanation of what OPS Calendar, what it is and the purpose it would serve if it had made it to market, so to speak.
Brian: The idea with OPS Calendar, it was essentially an editorial calendar software with some production process stuff built into it. You and your team can build a process for how you produce blog articles, and podcasts, and social media, and map all that stuff to a calendar to see who needs to do what by when and also to schedule blog posts and social post to the calendar.
Back then I was running Audience Ops which is a content service, we do blog content as a service so obviously it was born out of that. That was essentially the idea with OPS Calendar at the time.
Rob: Yeah, cool. There’s a six months chunk where really from November of 2016, right after you ratchet up these expenses, things hit the skids with Audience Ops. I think this is one of the tough parts of your journey, it seems like. You want to walk us through the timeline there, what happened?
Brian: We’re three years later now and this is still one of those periods of time that I still look back on. Like, “Man, that was painful.” What happened was basically that growth from Audience Ops, 0-50K, that started to plateau right around October, November into the holidays and then started to decline through the holidays, in the January, February into about March or April is when it started to finally turn back around. It was painful on a number of fronts because it coincides right at the time that I decided to start spending a lot of extra cash on developers and employees all at the same time. There was that part of it.
And then it was also just like, “Why is this happening?” Everything was growing just fine up until that point. What is causing the reduction in leads or the increase to churn, it was probably a combination of both. I was looking at it in a thousand different angles to try to uncover what was actually causing it. It’s still unclear to me to this day. I have a few ideas, some hunches of what it could have been. But when you’re in it and you’re trying to fix it, you just don’t know what exactly is broken. It’s really frustrating.
Rob: Absolutely. That’s devastating. 40%? That’s a huge drop. 50K down to 30K. That’s a lot of salaries, that’s probably all your net profit on this thing. I’ve seen SaaS apps plateau, I’ve seen them right over the top, so to speak, when they start to decline. But I’ve never heard of a drop that fast that wasn’t due to some big platform risk. Like, “Hey, I’m integrated with Shopify and they just completely cut off our access.” Or, “I’m a Twitter client and they cut the API.” Or a Google change. Something that was just decimating.
But just to have that happen seemingly out of the blue, it sounds like, and three years later not have been able to pinpoint what happened, must have been terrible. It sounds like it went on for five months and you were just trying to fix it this whole time. Is that what it was?
Brian: Yeah. There are a few things. It was probably a combination of things that I look back on. One was in summer 2016, it was the first time that I hired a sales person for Audience Ops. There was somebody on the team, actually still on the team today, and I put that person into a sales role to remove myself from the sales. That was one remaining jobs that I was still doing in Audience Ops, the team was handling other stuff. It’s not any fault of his, he actually did a really great job of closing a lot of accounts that summer. Bringing out a lot of clients, but a lot of those clients that he sold and closed churned a lot faster than other clients have come on.
I take that as my fault for the training, maybe some of the compensation structure that I really didn’t structure and situate to have a sales person really set the right expectations for customers. Basically the way that I do when I do sales calls for Audience Ops is for me, when I do it, it’s really about let me tell you exactly what’s happening in Audience Ops and almost talk you out of signing up for Audience Ops to make sure that you’re really on board for this. There’s that, we just saw a string of cancellations.
Then the holiday season hit and that slowed down. It was weird because the previous holiday season was actually a pretty big spike in growth for us, but it didn’t happen in 2016. In January, now we’re in the thick of this six month period where sales are stalling, we’re seeing this churn. I go away to the Philippines, my wife has some family there. We were there for a whole month. My plan was to work a little bit while we’re there, but it’s a completely different timezone and that means I literally could not do any sales calls. Even the leads that we had, I couldn’t really even talk to them. Combine that with terrible WiFi while I was there. That was stressful as well.
Rob: How did that manifest itself? What was the peak moment or a moment you can remember where you lost your **** or you were feeling extremely mad about it?
Brian: Anyone who knows me, I am really pretty level headed, I think. I tend to compartmentalize pretty well. Poor sleep, bad eating habits and exercise and all that definitely starts to pile up. Because it’s like I could go exercise today, or I could keep working and try to fix this thing. That was a choice every single day.
Rob: Right. You just dug in and just grinded it out, I shall say. Probably took a toll on your body and mental well being, too.
Brian: Yeah. Into March, April 2017 is when things started to turn around. It’s almost like I don’t really know because it wasn’t a sudden turn around either. It took all of 2017 to dig back out and back up to where it was. But, we definitely improved a lot of things. That was when we really improved the new customer on boarding process heavily. Again, to reinforce those expectations. That I think had a really big impact on customer retention. If they have a really fantastic first month with Audience Ops, they’re really likely to stay on for a year or more at that point.
I worked on some new marketing stuff during that time and some new content, some webinar stuff. I think that seemed to help as well.
Rob: It’s something I talk a lot to entrepreneurs, especially new entrepreneurs don’t understand that they’ll see someone who’s built a business up to 10K a month. You may be able to sell that for $250,000 or something, there’s all these factors. But whatever, you can sell it for quite a million dollars. But people will say, “Why wouldn’t you just keep that? Just keep it and keep running on the side. It’s only three hours a week or five hours a week. Just keep running it.” Usually, there’s a couple of reasons, one because distraction is distraction and there’s opportunity cost to that. But the bigger one is that none of the businesses we have run on autopilot for years. They always get smacked around by something. Sometimes it’s Google, and sometimes it’s a competitor, and sometimes it’s platform risk, and sometimes it’s something you never would’ve guessed, it’s a key employee quitting, it’s something that you have a tough time identifying like what happened with you.
Then you have to shut everything down, stop doing what you’re focused on, and you have to turn your focus back to this thing that you’re tired of working on anyways. At a certain point, eventually, you give in. I’ve done this with multiple businesses and I’ve seen people do it as well, where you’re just like, “Forget it. I just got to sell this thing. I got to get it off my plate.”
Brian: Yeah. It hasn’t really come to that point in Audience Ops, but I can definitely say that there have been times. This period in 2016 was definitely one of those where it was like my mindset is trying to get this brand new idea for a SaaS off the ground. It wasn’t even in existence yet. It was just like get this thing to market. That was my number one goal. Working with developers, I’m paying for developers. I want that to happen as soon as possible. And then I have to stop and work on this churn problem in Audience Ops. Yeah, that was pretty painful.
Rob: We’ll talk in a second about how essentially you did turn that around through 2017. But I’m curious, that low point, this five, six months where things from November to March, April, when they are just in the thrawf and you can’t dig it out. You said that’s still a point that you remember very vividly. I have moments like that in three, four, five months period as well. I learned a lot from them and they impact the way that I do things today. They impact the way that I think about business and the way I ran my apps after that. I’m curious, what lesson or lessons did you take away from that? That impact the way that you make decisions.
Brian: I found that there are one or two of those points in my career so far that I can look back on, that I feel like really influenced the way that I work today. I think in some ways that’s a good thing and in some ways, I do things to a fault today to try to prevent that from happening again. On the positive side, I’ve been through enough of those ups and downs in the MRR graph to know that no matter how well something might be going today, I still have to play it extremely conservative.
We’re like three years out from that, Audience Ops is actually doing really well and I have a profit savings saved up that I’m able to deploy on new products and ProcessKit and things like that. But I’m actually hesitant to spend anything. Because it’s like just keep the reserves in check just in case, you really never know. You look at the news, the economy and stuff. I look at things almost afraid of what could happen.
Tactically, on the sales side of it, I talked about how that period I had a salesperson and then there was a string of churn that came in the months after that. That has caused me to really delay and delay on trying to put a salesperson in place again on Audience Ops.
I’m actually now doing that finally in the end of 2019 with a new strategy behind it and some new structure, but it took me three more years. I have removed myself from every other aspect of Audience Ops. I really spend less than two hours a week on this business, but those two hours are doing the sales calls. Because I just want to make sure that that message is being sent to new customers as they get on. I’m finally coming around to being okay in letting that role go.
Rob: That makes sense. I was going to ask, obviously, if you brought a salesperson and it didn’t work out, you had to turn the app around but after that, I would think that if you do want to get that sales, you would just try and try again. Most sales people don’t work out. The first one you find, frankly, more of the first VAs that I find, the first one almost never works out. So I just hire one, two, three, four and it’s frustrating and it takes time, but eventually, you find someone and then you’re able to let it go. Is that where you’re at now? Is that something you’re looking at doing, trying again and stepping away?
Brian: Yeah. I’m trying again because I think it will actually help impact the business, growth, and the overall health of the business to get me out of that role. Speaking about it now in 2019, I just have a lot more space to breathe. Financially and time wise and so many more things inside the business are more optimized now than they were back then. The on boarding stuff is really locked in, things like that. I just think it’s probably a better time to try to get that off my plate now than it was.
Again, things did start to turn around in 2017, but it took all of ‘17 into the beginning of ‘18. ‘18 was really when I finally got my bearings back in terms of having some space to play with.
Rob: Right. It sounds like it, and that April 2017 point could have been celebratory because you’re bringing your first paying customers in for your SaaS up OPS Calendar, but your financial runway was basically gone. You had to turn around over the next six, seven, eight months. What were a couple steps that you took, it was all hands on deck at that point, right? We’ve lost 40% revenue, we’re still declining at this point. What were some steps you took to turn this around and get out of the tailspin?
Brian: Just to be clear, there’s two parallel products in play here. One is Audience Ops which is in the site crisis mode, and then OPS Calendar which is trying to get off the ground but then I would have to pause, paying for the developers, right at these critical moments as we’re bringing these new customers on to the software. I just didn’t have the cash to fund for the development and couldn’t move fast and all that stuff. That was really frustrating.
But with Audience Ops to start to turn it around, I did a number of different things to try to attack the problem from different angles. One was that new customer on boarding again. I worked with my team a bit to see how can we just make sure that customers are really happy after their first month and that clearly has had an impact on improving churn over time. Just focusing on retention. I think that also helped with customers like referring other leads to us, that has that side effect too.
I did work on some new marketing materials. A whole round of new content, I think I did a recorded webinar that I put into the marketing system at that point, worked on the email automations that helped to nurture. I just went through the whole funnel. Everything that leads and customers see as they find out about Audience Ops, as they go through the sales process, as they get educated and nurtured and on boarded. I tried to improve every step of the funnel over that in early 2017.
Those are the kinds of improvements that you just don’t see moving the needle overnight, you just do that work then maybe a few months later things start to improve.
Rob: Right, and it worked because you turned it around over the next six or eight months.
Brian: I think it has definitely returned to where it was and has grown beyond that but it doesn’t really see the growth rate that it saw in that very first year. But I think that’s sort of a natural slowing down that a business sees. At least I’ll see it that way.
Rob: Yeah. It’s hard to say without going out and really beating the bushes and trying to generate a bunch of leads and doing cold outbound, focusing on SEO or running ads, there’s a natural threshold that always sets in. It seems to me like you’ve always been cool with that plateau because that plateau provides you with a full time income budget to build other apps which is really what you want to do. That’s your lifestyle choice.
Brian: Yeah, exactly.
Rob: They were working on OPS Calendar, your developers were, and you got your first paying customers in April and then you had to pull them off because you didn’t have the money, and then in July in 2017 you’re able to get them back to work on OPS Calendar, and then you get a little bit of traction right that latter half of 2017 but you never found product market fit with OPS Calendar. By February of 2018, you were still trying to push it forward, but some calamities happened. It sounds like there was a code base thing you want to talk us through what it was like dealing with that.
Brian: Throughout that year of 2017, it was trying to bring those first customers on and got a few handful of paying customers, but over the summer there whatever savings I had was gone from that period of Audience Ops. I’m not one of these people who just goes crazy on the credit card. Once I see a little bit of balance on there, I’m just too risk averse and debt averse to really go too heavy on that. I just pause and I don’t really spend until I have the cash in the bank account. I had to pause those developers over the summer which really, really hurt because I felt like it was at a critical time.
As we get into 2018, I went on a trip and we had been pushing off this upgrade from Vue one to Vue JS. At the time, I wasn’t a developer, I didn’t even really understand what Vue was. The developers chose that framework. That upgrade broke everything. I came home from that trip looking at a situation where I could pay those developers to go fix every single feature that I had just paid them for the last 18 months to build. Essentially, spend all that money and all that time again to rebuild the app, which was not going to happen.
It was also we’re having a hard time converting these customers, even a lot of the early prepaid customers didn’t end up continuing on as full customers. That said to me you know what, this thing isn’t really right. Because we have a process feature in OPS Calendar, and people were using that side of it and they were not touching the social media calendar stuff. That was also a signal to me that really the product that I deep down wanted to build was more of a process oriented tool.
Here I am in early 2018, probably going to “pivot” the product, if you will, to something else. Probably a new name and everything. I’m having a problem with these developers, but at that point I just decided to just stop everything. Just pause all work on OPS Calendar, take a month and figure out what I’m going to do. My conclusion was that I’m done with being limited by not being able to build apps myself. As a designer and front-end developer and product person, I’ve always felt, and this really brought it to a head was this experience with OPS Calendar, I’ve always felt this frustration that I can’t move fast enough because I’m always waiting for the developers to finish a feature. Sometimes I can’t move at all because I don’t have the cash to pay developers.
Let me bypass that by investing my time in learning back in development. I learned Ruby on Rails. I basically decided all of 2018, I’m going to use all my full time hours to make myself a full stack developer. I know I won’t be a very good one, but at least I’ll be able to take any idea and build it into a product and bring it to market, and that’s essentially what I do.
Rob: You were just about 18 months into OPS Calendar and I’m going to guess tens of thousands of dollars paying developers. You put on maintenance mode. You effectively shut it down. What was that decision like? How hard was it for you?
Brian: I think it was somewhere around $30,000 or $40,000 that I put into over that period of time. It sort of sucked, but it was also I don’t really have any other option here. I’m not going to just keep spending on something that’s clearly not working. I knew that the tech underneath the app, they technically built the features that I designed and speckled, but there were underlying architectural issues that I could just feel as a user.
That was another reason moving to let me just try to build it myself because at least I could design the thing from the inside out the way that I feel like it should be built. It was hard, but it was also I’m moving on. At that point I was also really excited about this idea for what the next version is which became ProcessKit, which is what I’m working on today.
Rob: I’m curious, deciding to learn to code from scratch, you’ll often hear folks send questions in to this podcast and say, “Should I learn to code if I’m going to watch a SaaS app?” The answer’s always it depends. Do you think that’s something you’re interested in? I would at the minimum learn to code well enough to know if the developers are trying to pull one over on you so you have a concept, you can talk to them. I don’t write production code anymore myself, but I wrote code professionally for 10 years.
I can still have architectural conversations. When Derrick and I were building Drip, I could go pretty deep on the tech stuff. It’s an asset to have for sure. But I’m curious, instead of learning to code, why not launch another productized service? Because you seem to be good at them, they seem to work out for you. Audience Ops is obviously successful and profitable. Why continue to seek after something that is showing you so much resistance in essence, which is a true software base SaaS app?
Brian: Number one, I’ve always been interested in software. I’m not new to software today. I’ve been working on it in different forms for many years. That has always been my number one interest in terms of what I want to create on the web. I’ve been building on the web for over a decade. That’s really always been where I’ve been heading with this. Even since I started Audience Ops, yeah I worked very hard on building it and building the team and the processes, the systems and everything. It’s always been with the end goal in mind of removing myself so that I can fund my time to work on software.
Like you said, the scalability aspect. Yes, I believe a service company can run without you and be profitable without you in the day to day like it is for me, but it’s clearly not as scalable as a SaaS that has hit product market fit and has that growth. Just in terms of the value of an asset and all that.
Also, I just wanted to go back to what you’re saying about the decision to learn to code or not, I agree with you. In many cases, it may not be the smartest choice, or maybe you should just learn a very light understanding of it so that you can communicate with developers. I think there are few caveats that made my situation a little bit unique from where most people are that I come across at least.
Number one, I’m not starting from scratch. I had been a frontend HTML, CSS, little PHP, little JavaScript work. But professional level frontend stuff for years. Building websites, doing a lot of work with advanced WordPress stuff, working on major websites for agencies and things like that. I was not completely new to basic coding and programming. I just never really learned a back end stack like Ruby on Rails, and working with databases and things like that.
There was that. That gave me a head start. And then the other thing is that I had the time. I really have full time hours to throw at this. If I didn’t have that, if I was doing this nights and weekends, I don’t think it would be possible to make as much progress as I did over the last now almost two years. I don’t think I would have been able to really make a lot of progress with it if I couldn’t work on it full time every day.
Rob: Right. You had a lot of time to focus and it was something that as you said, you already had a basis for.
Brian: And I had a lot of help too. A lot of my close friends are software developers, Rails developers, I had of people that I could turn to for support and they’ve been super helpful.
Rob: Totally. That’s the thing. You’re in the developer community already even if you’re more of a frontend developer/designer. It’s like you live in that world and it’s not such a far stretch to be like, okay, I want to go one layer deeper and see how it interacts with the service side code. Cool.
That takes us to spring of 2018. Audience Ops is back, profitable, and you were able to free up your time and spent most of 2018, as you said, learning Rails. What was the most surprising part of that experience of taking that six or eight months and digging into service side code and learning to build your own software top to bottom for the first time?
Brian: In the early months, I knew that it would be a very big effort and that it would take me a long time to get decent at it. It was a little bit frustrating going through tutorials and courses and then still not quite being able to build anything real yet, but then just hacking away at it a little bit more for another month or two and then I can build something very simple.
Over the course of 2018, I went through a bunch of courses, I worked with a coach which was very helpful, and then I did some throwaway practice project apps. By the end of that, I was able to put together a simple app called Sunrise KPI. That was the first real app that I’d built.
I should mention that the idea for ProcessKit I had throughout 2018. I bought the domain. I spent some money on that domain. I was putting sketch ideas for what ProcessKit would be, but I also knew that I wasn’t capable of building it yet. I had to get those skills up and it wasn’t until the end of 2018 I had felt confident in actually starting to build what is now ProcessKit.
Rob: Yeah. If someone’s listening to this and they are thinking about themselves learning to code, what would be a piece of advice, either a warning or just a hey, do this, this is what really worked for me, this is what fast tracked me.
Brian: Early on, I definitely wanted to stay away from the newest, trendiest, most complex frameworks, especially like the JavaScript frameworks and stuff. I’m sure there’s plenty of technical benefits to those, but I wanted boring, tried and true, non trendy stuff. It came down to a decision between Ruby on Rails or PHP in Laravel.
I went through a couple of weeks with PHP Laravel, some tutorials. I could follow along with those, but then I found I couldn’t take what I’d learned and go build something simple. I went through a one on one course on Rails. I did a month on PHP in Laravel and then a month on Rails. I found that at the end of the month on Rails, I was able to take that and build something simple. I continued to double down on Rails from there.
I went through a number of courses on that. Tip number one is to stick with something like Ruby on Rails, or PHP with Laravel. Something that has a huge developer community with tons of resources and educational stuff. That’s a big number one. Number two is to try and find mentors. I go to friends like I talked about. I paid a couple of people for paid mentorship for a while and I’ve learned to code in Rails developer communities, I go to that for some help as well. I frequently talked with friends about code questions. I hit up codementor.io quite a bit when I really get stuck.
Rob: Sounds cool. You mentioned ProcessKit which we haven’t really covered in this conversation. You want to tell folks what that is? Is it the next generation of OPS Calendar done in the way based on your learning from the first time?
Brian: At this point, the way that it’s positioned is that it’s really a projects tool. It kind of like a project management software, but it’s process driven. If your projects really follow the same script every time, they’re very repeatable and you’re doing a lot of the same stuff, whether you’re onboarding customers to a service or to a SaaS or something like that and you need your team to follow a certain process, that’s really where ProcessKit comes in. It’s different from the project management tools where you might run your tasks and projects in one of those tools, but you have your documentation, your SOPs over in a silo somewhere else. That’s where those kinds of operations tend to fall apart, the team just never really follows the SOPs.
ProcessKit sort of brings those together, and then also builds in automation steps. You can say if this then that, if it is is this type of project then assign these tasks to these people, calculate these due dates, and link up with Zapier and all that kind of fun stuff.
Rob: Cool. Where is that project in terms of launching? This is the part of the interview where I ask you questions I already know the answer to. What status is ProcessKit at right now?
Brian: It launched, it has customers. I’ve been doing the slow launch things over the past really throughout ‘19. I think I started on boarding the first customers around June, the very first ones. Today, we’re in November. I’ve been sending early access, invites pretty regularly since then. It was up on Product Hunt about two weeks ago and now it’s out there.
Rob: Is it everything you wanted and more to own a SaaS app? Is it just growing up into the right by itself? You make money while you sleep? I was going to say is it back to the same slug as OPS Calendar, but I don’t think it is. This time really is different. I get the feeling that there is more potential here. Is that pretty accurate?
Brian: First I heard your interview with Jane Portman this morning and I completely relate to that, probably so many other early SaaS founders with the long slow SaaS ramp of death. It’s real.
It’s very slow and the revenue is nowhere new replacing the income that I get from Audience Ops. But yeah, it’s less than a year in, and it does have more customers now than OPS Calendar did. It resonates with people a lot more, the problem and the solution, and the positioning. At least with my audience, the people that I’m connected to. But it’s early on. It really just launched a couple of weeks ago. Now that the new website is up, I’m starting to kick into gear. That shift away from just going to the early access list to actually marketing this thing and getting new traffic and new leads and that sort of stuff.
Rob: Now the real work begins is what I like to say. Getting to launch is like 30% of the journey. That’s where folks who are listening, we could do Startups for the Rest of Us drinking game where like if you get to launch and you don’t have some type of launch list that you’ve been building, then you have a problem. That’s the first base or the first quarter of the journey. And then now you’re launched and now the real work begins. That’s where it’s like you probably don’t have product market fit yet.
Now, I’m going to spend the next six months figuring that out as I grow very slowly. Then, you do get to product market fit, now I need to find a sustainable source of leads when it’s relatively scalable. Then you spend the next 6-12 months figuring that out. That’s why it’s the long slow SaaS ramp. These things are in stages and it’s truly the Cinderella stories that don’t have these steps in this order. It’s always a grind.
Even the Cinderella stories, like I said, there are no Cinderella stories, but even the ones that we look at and say, “Oh my gosh, that grew so fast.” It was a complete grind behind the scenes. This is never easy.
I wish you the best of luck with ProcessKit, because it’s essentially a second iteration of a SaaS app. You’ve obviously fought very hard for multiple years to get this out. This is something you really believe in. You can tell that it’s not an opportunistic product. It’s like I’m going to ship dog food to people on the internet because I could make money. You’re building this because this is something you need and you believe in. I hope that you’re able to make it work.
I think longer term, if for some reason it doesn’t work out, would you build another SaaS app again or would you consider doing a productized service?
Brian: At this point, I am pretty committed personally to doing software whether that’s ProcessKit or another idea or several other ideas, I’m pretty focused primarily on ProcessKit right now. I would use the productized service model if it came to that. No, I should say that I’m actually still using the service model in many ways. Obviously there’s Audience Ops that continues to grow, but even in ProcessKit, now we’re launching a Done with You process service to help you and your team improve and audit your processes, get you set up on ProcessKit as a paid service. That’s sort of like a productized service built on the software, which I really love that model.
You asked about how is it. For me right now, in that slow grind on ProcessKit, I’ll be honest, I’m really loving it. I’m really loving doing everything from the design to the code and talking to customers every day because being able to talk to customers and then literally iterate on the feedback that I got on the feature that I could ship by the end of the week, that just feels so empowering. I know that it won’t be forever, but at this point, Audience Ops is back to growth and profitable in steady state and a really amazing, fantastic team that I have that space to breathe now. I’m not worried about having to cut off the development cycles because of cash flow or things being built in the wrong way or things like that.
Rob: Yeah. There’s definitely a luxury to being able to control that whole pipeline, the manufacturing pipeline. Like I said, I don’t write code anymore, but when I was getting started all the way through Drip, everything before that, I wrote at least some code. Even if it was just maintenance, even if it’s just tinkering here, it was just tweaking. Because finding developer to make a three line code change in PHP or Cold Fusion or classic ASP or .NET or any of those things, it’s a huge amount of work to find someone just to do that. If you know the basics of code, to then just learn, I didn’t know some of those languages but I picked up a book or I went on Stack Overflow, whatever and you Google it, and you’re like, “I’m going to make this change and see if it doesn’t break anything.” If it doesn’t, it’s like wow, I just saved myself like a week of recruiting someone just because you know how to do the basics.
It cuts both ways. I think then you can also get mired in it and then you’re not working on the things you should be and that’s where as we started Drip originally, Derrick said, “Hey, I want to build it on Rails.” I said, “Cool.” Originally I was going to learn Ruby but eventually I said, “You know what, I actually think I shouldn’t because I will get into the repo and start tweaking things. And I should be talking to customers, I should be building processes for this business, I should be doing all the other things that don’t involve the coding.” There’s a point where that makes sense. And if obviously for building a venture backed startup and you’re raising money, you probably shouldn’t be the one digging into the code. Maybe someone on your team is. But there’s a balance there.
But that’s not what you’re doing. You’re building something that you want to build, that you want to exist in the world, and you’re willing and able to take it slow and that gives you a luxury.
Brian: Taking it slow, I’m as impatient as they come with things. I constantly want to move fast and execute and ship something new every single week. But bigger picture, that what’s this podcast and MicroConf and everything is all about. It’s about embracing that slow model of taking your time and making sure that things are done right. I’m all about it.
Rob: That’s right. Ambitious founders who want to build interesting things, build sizable business but are not willing to sacrifice their lives, their health, their relationships, whatever it is, even in your case, it’s a lifestyle that you don’t want to sacrifice to do it and that’s what it’s about. It’s about retaining that control.
Brian: 100%.
Rob: Thanks so much for coming on the show, man. If folks want to keep up with you, and they like the podcast, they should search for Bootstrapped Web, podcast you release every week or two with Jordan Gall. I’m a listener, have been for years. If they want to keep up with you on Twitter, you are @casjam and of course processkit.com is where your SaaS app lives. Any other places folks might want to look out for you?
Brian: Audience Ops is still kicking. Great team over there. Yeah, you hit it. That’s it.
Rob: Sounds great. Thanks again, man.
Brian: Thanks. Thanks, Rob.
Rob: If you have any questions for Brian or myself after hearing this interview, I’d love it if you would tweet me @robwalling or send a question into questions.startupsfortherestofus.com and I would be glad to have Brian back on the show to answer questions you have about any of his experiences, or productized services, or anything else that you feel like he could lend some insight into. If you have an unrelated question for the show, you can leave me a voicemail at 888-801-9690. Or you can always email us questions.startupsfortherestofus.com. You can find us in all the podcasting marketplaces and directories, just search for Startups.
If you’re interested in the full transcript or to make a comment on an episode, just hit up startupsfortherestofus.com. This was episode 474. Our theme music is an excerpt from We’re Outta Control by MoOt, it’s used under Creative Commons. Thank you for listening, and I’ll see you next time.
