Episode 506 | Shutting Down and Starting Up with Derrick Reimer

Rob: Welcome to this week’s episode of Startups For the Rest of Us. I’m your host, Rob Walling. This week, I talked with Derrick Reimer who’s been a many time repeat guest on this podcast. We talked about his decision to shut down his prior effort, Level, that he and I spoke about two years ago on this show and his new effort, Mighty Cal, that he’s working on and he’s going to be launching here in the next few weeks.
Before we dive in, I want to talk about an app called Subbly, subbly.co. This is through helpfounders.com where I donated ads slots and sponsorship slots on this podcast to help other bootstrap founders get some exposure in our space. subbly.co is a subscription ecommerce platform that focuses on direct-to-consumer ecommerce brands especially those that are selling subscriptions. If that’s you, please give Subbly a look, subbly.co.
In addition, in case you miss a few episodes ago, I mentioned that with TinySeed which is the SaaS startup accelerator that I started two years ago with my co-founder Einar, we are raising fund two. Today, we have funded 23 companies with our first fund. Now, we are raising that second fund. If you are an accredited investor and are interested in diversifying an investment across many dozens, if not hundreds, ultimately, of early-stage B2B SaaS companies, head to tinyseed.com/invest. Enter your info there and let’s have a conversation. There’s certainly no commitment, but if you want to learn more about what that might look like, hit us up at tinyseed.com/invest.
A little background on Derrick before we dive into our conversation. Derrick and I started Drip way back in 2012. We grew it together, sold it to Leadpages in 2016, then moved on in 2018. Since then, Derrick has started a couple of different projects; we’ll dig into those. I won’t spoil them for you, but last time we talked was about two years ago and we were talking about how he was trying to validate his app, Level, which is a Slack competitor. We basically pick up right where we left off. We talk about his decision to shut level down and then what he’s been up to since then. Without further ado, let’s dive into my conversation with Derrick Reimer.
Derrick Reimer, thanks for joining me in the show again.

Derrick: Hey, thanks for having me.

Rob: I think you’ve been in this show at least five times?

Derrick: Oh my goodness.

Rob: Yeah, I know. The most recent was almost two years to the day. It was July of 2018 where we talked about how you were validating Level. It was your ambitious third SaaS application. It’s been a while, man. You’ve been up to some stuff.

Derrick: It’s been a while, yeah. A lot happened in the last couple of years.

Rob: Yeah. Let’s dive right into Level; we can catch folks up. Level (in essence) was a Slack competitor that you’re working on. Your angle on it was a less interruptive, get deep work done as a developer or creator but still have some type of chat tool. You want to catch people up on that?

Derrick: Sure. Level was borne out of the experience in large Slack teams especially after the post-Drip acquisition, 150 people in a Slack room. The company that time had basically said we’re going to shift everything into Slack, not use email anymore, and experiencing firsthand all of the challenges that come with the interruptive nature as a maker, trying to manage all these communications in a realtime chat format.
The premise was to strike a better balance, a healthier balance. There were some innovations that I came up with like putting things in a hybrid between Slack and emails. There was an inbox in Level that would queue up your messages. They wouldn’t disappear when you read them but you could subscribe to certain things that would flow into your inbox and other things which are in a feed.
It’s actually funny. It’s quite similar to some of the concepts that I see in Hey!, the new email app from Basecamp. I just found that amusing that they have some similar concepts, like important things landing in your inbox and other things that are just there for you to peruse or in this feed. You can just kind of scroll through that.
That was kind of the idea. It was admittedly ambitious. The proposition was basically convincing companies to move their whole communication infrastructure off of Slack; a big, big learning that smacked me right in the face once I attempted to launch it after building it for about nine months. It’s just the wide chasm between people’s recognition that their communication patterns were not healthy and that a product could help to add that, then their actual willingness and ability to get organizational support behind moving off of Slack.

Rob: Yeah, that’s the thing because when an individual can’t make the decision to move anymore, it’s a really tough thing. Unlike, if I were to try the situation from Calendly, for example. Even if I was on the team, as long as I have a credit card, I can get a free trial. I can just go, sign up for that, and use it on my own right now. I don’t have to convince other people.
The switch and cost of Slack are high, the feature depth. They have a pretty big moat now with the integrations. I remember you and I talking. I was like, mobile apps, dude. I’m not sure you can do this without mobile apps. There’s a lot to it. There’s always uncertainty when you’re launching things, but it really was an ambitious project for you to take on.

Derrick: Yeah. It was fresh off of a long stint with Drip, all the way through acquisition and I was really excited to work on a new, ambitious challenge. That was kind of where my mindset was at that time. I did recognize that it was going to be an uphill battle, but I was willing to take some risks then. I learned a ton in that process.
I wrote a whole in-depth blog post retrospective about it; the folks can check out on my blog. Just learning about how to ask better questions up front, I became acquainted with The Mom Test methodology, which is booked by that name. That kind of gives you a brief, manual, very actionable, about how to ask the right questions because people who have the best intentions to help you out will often steer you in the wrong direction. They’ll be excited but that excitement doesn’t actually translate to actually making a purchase.

Rob: Yeah. You basically sunsetted. You’ve got a few folks to use Level, but it was an uphill battle. You just couldn’t get enough traction. Was that about a year ago now?

Derrick: Yeah, it was just over a year ago.

Rob: You’ve moved on to your next app which is called StaticKit. That’s in the StaticKit website form and point stuff. If I recall, when you and I talked about it, you were like, I want to do this to get something out there quickly. I don’t want to spend six months thinking, manifesting, and doing all of that again. I’m interested in static sites anyway. I think there are some opportunities here but I’m not quite sure what it was. It almost felt like you needed to get something into the world to tool around with. Is that accurate?

Derrick: Yeah. It was pretty rough. Psychologically, it was rough after coming to grips with the fact that putting nine months for it into Level and for it to not work out was tough. It was partially therapeutic to dive into some tech and some stuff that I was particularly interested in. There’s a lot of stuff happening in the static site ecosystem, the JAMstack (the term coined by Netlify). A lot of interesting momentum around that, and a lot of folks leaving WordPress and adapting static sites instead.
It seemed to me that there are emerging trends around this. Again, I recognized that this was still nascent and not entirely positive that the market was ready to start buying tools to fill in the gaps between what they could accomplish with the monolithic WordPress back-end and some of the newer static site technologies.
It had been an idea that kind of floated around in my notebook over the years about building some back-end and building blocks to come alongside static sites. I just started building some stuff, threw a landing page up, and right away got some interest from some of the major hosting providers in the space. They reached out directly and were very excited about the developer-centric form back-end.
It was the first dipping the toe in the water for StaticKit. It got a good amount of excitement from some of the other people in the ecosystem and the willingness to come alongside, and promote in their marketplace and stuff like that. That sort of is what drew me into going a little deeper into the space and seeing what I could make of it.

Rob: It just feels like it was one of those waves. We kept talking about it like, hey, WordPress was small. Then, it wasn’t. There are these technology waves that come and static sites feel like they have the potential to do that. No one knows if they actually will, but there was an opportunity to build something relatively small, get it out there in a few weeks, have these bigger players reaching out, and saying we want to integrate, we want to promote. That’s an interesting opportunity. That’s one of the reasons I like the idea of you doing it, you not going from a standing stop when that happens.

Derrick: Right. That gave me excitement and gave me some glimmer that there’s something there. I still had to learn that point like, all right. What’s the market actually look like for this? I know there’s a lot of developers experimenting with these tools. Developers love everything you can manage in version control, your entire configuration, and developers will eat that up. I knew that I had the interest of developers, but how many agencies were actually using this instead of the older monolithic Content Management System stack?
There’s a lot of other players alongside static sites like Content Management Systems, for one, that caters specifically to this audience. A lot of them are funded. It’s hard to know really how much traction any of these companies have when they have funding. They’re out there doing their marketing and having a presence in the tech’s sphere but what is their revenue story actually looked like and how much traction they have started?
It’s hard to ascertain that without just diving in and seeing what you can do. I definitely had my learning hat on during that process and started to become clear that there’s a lot of people that are signing up for tools like these are not buyers. They’re not in the situation of ready to actually exchange dollars for the tools. I think some of the large hosting platforms like Netlify, like Vercel have demonstrated that you need a large free tier at the bottom to service the folks who are just playing with stuff and ultimately make your money selling into the enterprise, kind of doing an enterprise sales process. That became more and more clear that that was likely what was needed to happen for StaticKit to really get traction, and that gave me a lot of pause.

Rob: Yeah. You invested enough time and started to feel that you threw the time after that. It’s one of those things. You could obviously look at it and say why give up so quickly, what were the signals, and all that. Really, you’ve laid them out there. It became painfully obvious that there are a lot more free tools in the space. I think it’s still a viable space. You have a certain revenue milestone. You want to get to a certain amount of time. It’s going to be really challenging in that space to do it. I think longer term is a better play.

Derrick: Yup. A lot of bootstrappers have this wisdom, hard-earned, it takes some iterations. It takes some different attempts and different angles. You’ve got to keep building and exploring to arrive at the thing that’s really going to resonate with the market. I’m trying to get better at that being malleable, being keen and an open mind, not getting too overly committed to something. I think that was one of the tough calls, to figure out when’s the right time to shift focus. Do I keep hammering away with this thing? Do I go with my gut, listen to these signals that I’m getting, what I’m learning in the market, and shift my attention?
Ultimately, after consulting with some advisors, you included, I started looking at other spaces.

Rob: Yeah. That’s the important thing, too. These decisions are never clear cut. There’s always (a) some gray areas, and (b) a lack of certainty but you have your own gut feel and it helps to sanity check that with other people. I do know that you and I had several conversations about it over the course of many months.
Even from early on, are you sure that this space is going to be what you need? But you’re already in it. It’s going to take a few weeks to get something live. Let’s follow that. You pulled the thread, see where it goes. Hard work, luck, and skill. It’s like you’re putting in the work. You have scaled the building, launched it. It’s like, are we going to catch a little bit of luck here and there, like potentially propel it forward?
As you were starting to back off of StaticKit a little bit, realizing if I invest more time into this, it’s not going to yield what I want. You started noodling on other ideas. You have a big idea list of not only apps but spaces. You’re just going all the directions. Everyone always does, like how do I come up with an idea? I know you and I have a lot of conversations about that. I thought it was clever the way that you came up with one list in particular, which was stuff you were using, you were paying for.

Derrick: Yeah. I never wanted to say, as an absolute, that you should always scratch your own itch. I think there are always opportunities to find business ideas in other ways. I knew one leg-up that you can give yourself is to just have some direct experience, some recognition of understanding what the problem is, and what the market is if it’s a tool that you yourself use.
One exercise I would do with my notebook is to list off all the tools we use while building Drip. We have aero monitoring. We have all kinds of exception tracking, uptime monitoring, hosting, calendaring, email, scheduling, and on and on and on. Just an exhaustive listing of everything and running them against my rubric which I gradually been building. It was something that I need to be able to launch an MVP quickly on. It needs to not be so mission-critical that if there are two minutes of downtime, it’s trucking someone’s whole business.
I started running them through my filters and pretty quickly scratch off most of them. One that lingered on there was scheduling and tools like Calendly that you use to send a booking link to somebody. I remember we adopted that pretty early on at Drip for our demo process. It was one of the killer tools in our stack. I started looking really closely at this because it felt like there were areas to improve. I definitely had my own ideas about that.
There are some interesting properties about this space, one being the opposite of Level. People can use this in a single-player mode which is very attractive to me. It’s something that I could build the kernel of decently quickly. That checked those boxes right away then we started thinking about that a little deeper.

Rob: I remember the conversations when you would call out an app name like aero monitoring. It’s like, okay, what are the pros and cons of the ones we’ve used? And Calendly. I was like, oh, I’ll tell you what. When I do group scheduling, it’s a nightmare. Why doesn’t Calendly overlay my calendar over there? Is it for both customers? It was pretty quick. There was innovation.
Again, you go back to the 2012 ESP mindset. Mailchimp and AWeber solved this problem. They’re perfectly good solutions. Once you start thinking, how could it be better? What are the personalizations, the tags, the automation to make it a better system? Oh, I see the future a little bit. Or we think back to email, Gmail, and then to Superhuman. Email and the online clients were just fine for a decade. Nobody touched them. We just use them the way they were.
When someone comes along and says Superhuman is a new email client, or hey.com you do realize there are ways to innovate on these tried and true solutions. That’s how I started pretty quickly thinking about Mighty Cal. Mighty Cal is your app. It’s at mightycal.com. It became pretty obvious that there were innovations that could be made to make this a better process.
That doesn’t mean that this is a viable market. This doesn’t mean that this is a viable product. That was something we were careful of. It’s just like, look, I can tell you five things that I would switch for but you’ve got to go talk to other people next.

Derrick: That’s what I did. After we did a whiteboarding session and came up with a bunch of our own ideas, I didn’t want to stop there. That’s a classic mistake. I think I solicited maybe 10 different conversations. A handful of them was like, yup, I used Calendly. It works fine. Not that big of a deal.
I tried my best to keep the conversations decently high level. We talked about, what does your day look like? Trying to understand the person, understand what their cadence looked like, what their flow looks like. With everyone I talked to, there were elements of calendar management, schedule management that were a pain for them. A good chunk of them was kind of within the scope of the broader vision that we started to come up with when we were whiteboarding.
It’s always hard. It’s really hard to interpret those kinds of conversations because when you don’t have a product to attempt to sell to somebody, you’ve got to hold things loosely when you’re having those conversations. I did feel like I got as good an indication as I could. There’s pain around this and there’s also fairly low switching cost, which was another thing that was pretty intriguing. You could use this in a single-player mode. If you didn’t have a super complicated setup, then it would be fairly easy for you to switch to a different tool. If I could just innovate on some pieces that a lot of people care about, then that may not be too difficult of a proposition.

Rob: I think the low switching cost is nice. I think the potential for expansion revenue is because it’s per seat. This is a perfect per seat product. If two people log into Mighty Cal, they’ll see different things because it’s their calendars. I don’t think you’ve decided on final pricing but Calendly is 7 a month. I’m assuming you’re going to be in that range. Obviously, normally we’ll say oh, no.7amonth.I′massumingyou′regoingtobeinthatrange.Obviously,normallywe′llsayoh,no.10 a month? That’s not a price point. You need a huge funnel, but (a) The market is massive. There are so many people using these tools constantly. There are tons of traffic streams you can get in front of, but (b) you get a team. Even the TinySeed, MicroConf team, there’s four of us plus my assistant producer so five. We’re a 50 a month client if we were to switch everybody. That’s where this starts to not be a50amonthclientifweweretoswitcheverybody.That′swherethisstartstonotbea10 a month product. There’s a lot of pluses to it.
On the flip side, let’s talk about the dangers. If we look back in the year and this hasn’t worked, why won’t it work? What’s going to trip you up in this space?

Derrick: I think a big risk is getting the positioning right with people; unlocking the positioning of people who really care about a more powerful, better-curated experience. I did sense among some folks an apathy, like Calendly is fine. It’s not perfect but it’s good enough. One risk is are there enough people who care enough about the nuances of their scheduling process and polishing off the rough edges of this scheduling experience?
I think I have some compelling product innovations on presenting things as a calendar instead of a list of times giving people a richer view. Again, at this point, it’s a hypothesis. Is that going to resonate to get enough lift or is it just going to be an apathetic response? I think that’s a big risk.

Rob: Yeah, a lot of competition. Again, if you’re at the first step of your stairstep and this is the first product you ever launched, you didn’t know how to write copy and support people, do design, coding, and build an app, there are all these things you can learn, I would say. It’s pretty ambitious to go up against Calendly and YouCanBook.me, whatever the schedule […] (there are 10 or 20 of these), but you’re a little further along having done Drip and Codetree which is an app we talked about in the past that you sold for 128,000 several years ago. You’ve had a few false starts here, but you’re past that early needing to get the basic skills. I’m such a fan. I’m secretly a fan of these really big competitive spaces. If you could go back to Start Small, Stay Small, of course, you start in the niches. There are all these reasons to do it. I would still say early on that was a great thing. Those were also great autopilot businesses and they’re great businesses to stair-step up from into if you want to do it. Not everyone wants to build a seven-figure business. It’s okay. If you want to build a128,000severalyearsago.You′vehadafewfalsestartshere,butyou’repastthatearlyneedingtogetthebasicskills.I′msuchafan.I′msecretlyafanofthesereallybigcompetitivespaces.IfyoucouldgobacktoStartSmall,StaySmall,ofcourse,youstartintheniches.Thereareallthesereasonstodoit.Iwouldstillsayearlyonthatwasagreatthing.Thosewerealsogreatautopilotbusinessesandthey′regreatbusinessestostair−stepupfromintoifyouwanttodoit.Noteveryonewantstobuildaseven−figurebusiness.It′sokay.Ifyouwanttobuilda150,000 business and just live an amazing life, do that. There’s nothing wrong with that. I know that you have ambitions. That’s your starting point.
You want to get to the point where default is alive. You’re paying your paycheck. Your ambitions are to grow up larger in terms of revenue startup. That’s where you think, is it easy to grow and make a 5 million SaaS in a really tight small niche? Is it easier to do it in a big space? Easy is relative. There are just hundreds and millions of dollars floating around in this whole scheduling space. You don’t have to stop at a little calendar widget. You’re going to get people using it. You’re going to get folks like me. You’re going to get salespeople. You’re going to get founders. You’re going to get whoever else. You know that there are angles. Whether you niche down or whether you add features that are more power user or that are just at the fringes, who knows the direction you can take in terms of integrations or automation or whatever else? Knowing that you can build a nice, innovative, little calendar widget, and get enough traction to get you to a nice revenue milestone, whether that’s5millionSaaSinareallytightsmallniche?Isiteasiertodoitinabigspace?Easyisrelative.Therearejusthundredsandmillionsofdollarsfloatingaroundinthiswholeschedulingspace.Youdon′thavetostopatalittlecalendarwidget.You′regoingtogetpeopleusingit.You′regoingtogetfolkslikeme.You′regoingtogetsalespeople.You′regoingtogetfounders.You′regoingtogetwhoeverelse.Youknowthatthereareangles.Whetheryounichedownorwhetheryouaddfeaturesthataremorepoweruserorthatarejustatthefringes,whoknowsthedirectionyoucantakeintermsofintegrationsorautomationorwhateverelse?Knowingthatyoucanbuildanice,innovative,littlecalendarwidget,andgetenoughtractiontogetyoutoanicerevenuemilestone,whetherthat′s10,000 a month or whatever, that’s a real bonus of being in a big space like this.

Derrick: Yeah. I think this is the classic kind of app where I’m picking a specific wedge. The wedge here is smoothing out the booking experience. The experience of one person getting another person’s calendar. That’s just one small piece of someone managing their whole schedule. Back in the day, business people would have executive assistants or secretaries. They would have humans there helping this whole process for them. That’s less common these days, especially among startup people.
There are tons of people doing business that are now managing their own schedules and calendar. There’s something even deeper to that than just booking links. I think this is an interesting wedge where this is a product onto itself but there’s a lot of different areas to expand it into. As I said, it’s just a huge market.

Rob: Are you going to focus on a specific use case? When I think of me, I’m kind of like a busy startup founder. A busy executive, a busy startup founder, whatever. That’s my use case. I’m also a podcaster. I’m going to need those two meeting types or whatever. There are obviously salespeople who’ll use this quite a bit, I can imagine.
When I do think of Superhuman and one of the angles where they want, the founders and investors. They’d be the Silicon Valley thing where they went after those two. Do you have an avatar in your mind if it’s busy founders and executives or are you specifically thinking there are podcasters, there are founders, there are CEOs, and there are investors or something like that? I’m just curious how you think about that.

Derrick: A first few that I have in my mind are founders; people similar to myself. I think that’s also another piece that I’m hoping to use as kindling. It’s my own small audience that I have from the podcast and just from being in the space. There’s a decent amount of people in my sphere who I think are potential customers for this. I hoped to use that as the first circle of people that I’m marketing this to. I think it’s going to be a lot of founders, bootstrappers, and potentially some investors in there, too. I think the business will expand organically from there. Let’s see what kind of viral lift it has. There is a viral component to this, too.
Every time someone shares a booking link, its exposure to whoever they’re sharing it with. It’ll be a little bit of following the organic growth track of it. I think that’ll be a very important thing to suss out. It’s like getting the position nailed. What I see a lot right now among others in the space is extremely broad positioning. I think there’s an opportunity here to speak a little more directly to some specific pains and be the de facto tool for that group.

Rob: Yeah. Especially when there is our space of founders and startup executives. Really, I just think a lot of us were operators, just trying to get something. It’s not a huge space. There are only so many influencers. Everyone talks to each other. Everyone’s online, spreading the word if a tool comes through that really is superior, it’s a superior experience, and people start seeing it, I think that helps us spread quickly.
In addition, we haven’t even talked about the viral loop of when I sent the link out, someone’s going to click on it. They’re going to go to mightycal.com. They’re going to see a Powered by Mighty Cal. There’s a lot of that was a driver in the Drip days. We have the Widget, the Powered by Drip. You know that that was a driver in Calendly’s growth. I think that’s something we haven’t mentioned.
In addition to low switching costs, big market, the potential for innovation, there is that built-in virality which is really hard to do. It’s hard to make that, not impossible to make that if it’s not built-in. You can’t fake that. Having it in such a native way (I think) is a bonus.

Derrick: Yeah. I’m investing a ton of time into this flow. I think about it similar to, now that we’re in a pandemic era, I’ve been doing more ordering food through a mobile browser. I’m learning quickly some of the apps that really have it nailed, the interface feels so intuitive. That’s the experience I’m striving for for this. I want the people who are on the other side of the booking equation to be using these person’s links and coming away from that saying oh my gosh. That was amazing. How can I get that for me? This is what I want to give to people who are scheduling it with me.

Rob: I remember having that experience with Calendly. It’s like, Wow! I don’t want to be emailing back and forth anymore. That was really cool. I want to do it.
As we start to wrap up, you’re using this yourself now. It’s in production.

Derrick: Yes. I’m […].

Rob: It’s cool. Do you think you have some exterior customers? I guess, early access customers here in the next week or two?

Derrick: Yeah. As of yesterday, my burndown chart says 96% of the wait. I’m running out of excuses to not have additional users on the platform.

Rob: Seriously. […] way more than I have been. Cool. I look forward to seeing my invite come through. Obviously, if folks are interested in seeing what you’re up to but really getting on the list which is if you do feel like using Calendly or competitor, and there are some things I’d like to see improved for it, focus on the startup founder, the busy executive type thing. It’s mightycal.com. Of course, if they want to see what trip you on Twitter, you are @derrickreimer.

Derrick: That’s me.

Rob: Thanks again for joining me on the pod, man.

Derrick: Thanks, man. Thanks for having me back to give some updates.

Rob: Absolutely.
Thanks, again, to Derrick for coming on the show. If you have a question for me or a future guest, please send it in to questions@startupsfortherestofus.com. You can send it in text or you can record an MP3. Send me a Google Drive link, a Dropbox link. I read every email that comes to that address. I really appreciate you tuning in each week. Every Tuesday morning, I’m going to be in your earbuds. Talk to you next time.