Episode 551 | Task-level vs. Project-level Thinkers, No Such Thing as an Autopilot Business, and More (A Rob Solo Adventure)

Welcome back to Startups For the Rest of Us. This week, I’m your host, Rob Walling. In fact, every week on the show, I walk through topics related to building and growing startups, using an ambitious yet a sustainable approach. We’re not willing to sacrifice our health or relationships to grow our companies, but at the same time we want to build real businesses with real customers who pay us real money.

We value things like being meticulous, being disciplined, having a process that’s repeatable, and not relying on so much luck or a one-in-a-thousand chance to build a business that can change our lives or the lives of those around us. We know that starting a company is hard and more than half of being a startup founder is managing your own psychology, as well as making hard decisions with incomplete information, where the right answer is impossible to find through math or data.

It’s great to have you back. Thanks again for joining me this week. I am flying solo this week at Rob solo adventure, as I like to call them, and I’m going to bounce through a few topics that have been on my mind recently. I’ve used these solo episodes almost as ways to communicate things that 10 years ago I would put in a blog post, but now I like to put them in a podcast and potentially turn them into a Twitter thread at some point. Someday if I have more time, I would love for each of these to be a blog post.

One thing I want to cover is something I’ve covered briefly, danced around it in Q&A episodes, but it’s around hiring folks with different mindsets. Most specifically—I need to think of a good name for this—I think it is a task-level thinker, project-level thinkers, and owner-level thinkers.

Back in the day when I was hiring virtual assistants—it’s fresh off before our work week, this is 2007 or 2008—I realized I could try to replace myself by hiring a $5 an hour virtual assistant in the Philippines. They were very much task-level thinkers. I would record a screencast and it would take me 30 minutes to upload to a website and then send it to them—this is before Loom and all those things—but I could outsource some (I guess) rudimentary, truly just repeatable tasks, almost things you could almost automate with code but maybe they would take you too long to do, or things that were just easy to throw in a Google Doc or a screencast.

For years, I operated with task-level thinkers, and I was happy, basically a solopreneur with seven or eight, I think I actually peaked at nine contractors who are helping me. These are folks who were doing design work, folks who were doing administration, folks who were doing email support, developers, and it was like, all right. Here’s your next task. Take care of this.

But what I realized is I was then doing all the owner-level thinking which was longer-term stuff, and the project-level thinking which was this project needs—this is project management—seven things to happen, so now I get to manage all those people. That was fine when I was small, that was fine before I wanted to grow a multi-million company, but there was a turning point for me—let’s say it was around 2010–2011—where I hired a couple of people who were more project-thinkers. I can hand an entire project and they would then either manage the resources for me or they could do the whole thing themselves because they were essentially full-stack employees. That’s a developer term; I think most of you know it. It’s someone who can design, who can code, who can do database work, and maybe even DevOps work, but is someone who has a multitude of skills.

That’s when I realized this is the achievement that I’ve unlocked here. This is why when folks do raise a lot of funding, they will hire individual contributors who you could say they’re thinking about their own task, but you’re also able to afford project-thinkers which I was not able to afford prior to that point because I never had a business that generated enough income.

Beyond that after we were acquired—we sold Drip in 2016—I started seeing folks working inside a company who were not the C-suite, they were not owners, they were not founders of the company, but they really owned an entire segment and they thought creatively around it. So someone who’s a marketing strategist who ran this whole team of people, wasn’t just thinking about projects.

Actually, each of his people have their own projects, but he was thinking long-term, what do we need to do in 12–18 months? Coming up with new ideas, listening to the audio books, listening to the podcast, reading the books, and being what I call an owner-level thinker where it’s not about the equity that he owned but it was about ownership of the the results—soup to nuts—from the vision to the implementation, and working with the team to do it. So task-level, project-level, and owner-level thinkers are how I now classify in my head. That’s my mental framework.

The hard part is, of course, we want owner-level thinkers, these are senior-level people who can get a lot of things done but they’re very expensive. They tend to be (a) hard to find, and (b) out of the price range of a lot of bootstrappers. If you’re going to hire a contractor or someone who’s going to work for you part-time, I haven’t seen that work. Actually, I’ve seen it work in a couple of […] but it’s very rare. In general, I think these roles need to be thought about more full-time. I saw it again in the latter days of Drip when we had funding.

Of course, with TinySeed these days I get this question, Rob, you work on so much. You work on TinySeed, MicroConf, and a podcast. You do other stuff on the side. I hear you’re working on a book or whatever. How do you do all that? The secret, really, is that we have a great team. I don’t actually implement most of what happens with MicroConf. Producer Xander, who’s been on the show—you should follow him @ProducerXander on Twitter—he is that owner-level thinker of MicroConf.

He and I (I would say) share that role in essence, where we are both thinking about the vision, the brand, and the long-term, then we start getting to the short-term and the day-to-day. Producer Xander is able to go off, implement, and be a project-level thinker, even get into the nitty-gritty of it, be a task-level thinker and be that individual contributor who grinds it out and gets the task done.

The same thing on the TinySeed side, with Tracy Osborn who is the program director of TinySeed. She not only keeps the trains running on time. She’s not just thinking about how can I run this accelerator batch for this next month or two, but in conjunction with Einar and I, we’re all thinking what we need to do to make improvements and what does this look like a year from now, what does this look like five years from now, and really, what does it look like we’re running multiple batches in parallel.

This is a lot of things to be thinking about and it’s great to have someone who is committed to it and is thinking about it at that high ownership level. Again, its ownership of the results of wanting this to be successful. Tracy, you’ve heard around this podcast many times. She’s @tracymakes on Twitter if you want to follow her.

That’s really where I’m at in terms of a mental framework, is that having moved from hiring task-level thinkers—$5 an hour in the Philippines—to project-level thinkers, and then being able to work with owner-level thinkers. In the Silicon Valley parlance, it is just really senior folks who can drive entire efforts, both see strategy and tactics, get things done in the early days, then hire people to get things done, and manage them. That’s a lot of skill sets. Those are my up-to-date thoughts on hiring.

What’s interesting is until you’ve worked with or hired a project- or owner-level thinker, you usually think they don’t exist. Oftentimes, they are not cheap. When I think of inexpensive $5 an hour, it’s a $30 an hour contract or something, these folks require more budget and often funding to hire them, but it’s the way that you can often move faster and grow a bigger organization, if that’s something that you need to do or want to do.

My second topic for today is around this idea of an autopilot business or a business that you run on the side, don’t pay any attention to you, and it just generates income forever. I want to go on record saying there is no such thing. There is no such thing. Now, you can have an autopilot business for 6 months, 12 months, maybe 18 months. This is both from my direct experience where I used to have (I think it was) about a dozen small apps between $1000 and $10,000 a month, usually, and they all combine to make more than a full-time income for me. I had a bunch of those and I was trying to manage them all at once.

This is also the experience of folks that I see—MicroConf—and even folks who apply for TinySeed or who have talked to us on his podcast. There’s this sentiment where I’ve seen someone post a business for sale. It’s doing $10,000 a month. I want to sell it for this. I spend an hour a month on it or an hour a week.

There’s always someone who chimes in with, if it’s doing $10,000 a month and you’re only spending an hour a week, why not just keep it forever? The answer is because it’s not going to generate revenue forever on one hour a week. It’s in a maintenance mode, and what will ultimately happen is a competitor will come up and eat your lunch; or the organic rankings that you have in Google, YouTube, the app store, Amazon, or whatever will go away and you’ll lose your traffic overnight; or your ads that you’re running will stop working and you have to dive back in; or that API you’re connected to and relying on will change, go out of business, or quintuple their prices.

Things change. In this tech world that we live in, things change. That’s why I always say you can have an autopilot business for about 12–18 months, has been my rule of thumb. Again, I could probably name five examples of my own where this has happened, where the Google ranking stopped working, the Google Ads stopped working, the API broke, a competitor came into the space started eating my lunch because I wasn’t paying attention to it, because I was focused on Drip instead of my previous efforts.

I’m not saying you should never strive to have something that generates “passive income” and be an autopilot business. What I am saying is don’t delude yourself into thinking that you will be able to put something on the side and just have it running for years and years and years, generating income without you being involved or without an owner-level thinker driving it. If you just have folks doing task-level and maybe project-level work, you have your leads coming in, and you have your money coming in and such, that will work for a bit. But the odds of that going more than 12–18 months…

Look. If you have a dry cleaner or a grocery store, that’s not what I’m talking about. I’m talking about a tech business, a software business, something that uses a website to generate leads, usually, and it’s something that is in a space, like ours, that is pretty rapidly evolving. I’m mostly thinking about businesses that generate between $500 a month and maybe upwards of $40,000–$50,000 a month, some range of that.

I think, at a certain point if you have a $5–$10 million business, yes you can hire a CEO. Again, an owner-level thinker who maybe can run the business as good as you can or better. In that case, this is no longer autopilot. You’ve replaced yourself with a GM or a CEO.

What I’m really talking about, these businesses like the software product doing $5000 a month and it just kind of sells automatically because of these channels that are coming in—the Shopify addon I built, this Heroku addon I built. A lot of these are step one businesses. Although I have seen people try to keep on the side and be unwilling to sell it because it’s still generating so much income. Once I sell it I have this money in the bank that I’m essentially drawing down.

I get it. It’s a hard decision. It’s a hard decision to let that go and let the income go. But what I’ll say is then be prepared for every 6–18 months, 12–18 months to be drawn back into that business. You’re going to get drawn back in because the business is going to start to decline. That, of course, is the hard time. You’re not going to get drawn back in to tweak something or optimize SEO. You’re going to get brought back in because your traffic got cut in half, or your revenue got cut in half, or a key component of the business is failing—whether it’s an API, a long-time virtual assistant, a developer, an employee decides that it’s time for a change for them. And it’s tough.

I guess the bottom line is, again, I’m not saying don’t do autopilot businesses. I had them, they were great. They just all had a lifespan. That is a reason that, as I started moving on to larger efforts like I moved on to HitTail, I moved on to Drip, I either shut down or I sold those at a certain point. Now, some of them I held onto too long and I thought this is autopilot and the income’s so great, and they did get crushed by Google. I didn’t have the focus, didn’t have the time to go back.

Other ones I was smart enough, at least looking back, to get rid of them and get the cash to then invest in my future efforts. Both the purchases are okay. Keeping them around for income for a while if you play it right, I don’t think that’s a bad call. But again, just realize that there are trade-offs here. You will get pulled back into the business and be mentally prepared for that. That was always a big struggle for me. If I was focused on something, I had a really hard time going backwards and looking at this “old business.” It was a business that made me super happy three or four years earlier, but which I had kind of gotten over.

This is why I think it’s great that there is now this whole ecosystem around reselling apps. We have from FE International to Quiet Light Brokerage, Empire Flippers, and now we have Micro Acquire. There are ways to get value out of an app you’ve built if it has revenue. This was not really the case 10–12 years ago where I would buy an app at 18 months net profit—it was crazy—and to try to sell it for even 2 years was not easy.

Obviously, the multiples you’ve heard me talked about on the show are much higher for the types of products we build. That is (I think) a real benefit to those of us who do build businesses and either hit a point where they plateau and maybe we lose interest, or maybe we do need an influx of cash, or maybe we do want to move on to our next effort, at least these days we can get some type of reasonable compensation for these companies that we’ve built.

Hey, this is Rob, dropping in from a separate time and space to talk to you about Rewardful. Everyone knows it’s hard to grow an online business, especially in the early days. People are becoming desensitized to content marketing and paid advertisements. Instead, they’re turning to product recommendations from people they trust. How do you cut through the noise and grow through word-of-mouth?

This is where Rewardful comes in. Rewardful has everything you need to start referral marketing for your SaaS, membership, or ecommerce business. Reward your advocates whenever they send you paying customers. Rewardful is specifically built to work with Stripe, and automatically handles one-time charges, free trials, upgrades, downgrades, cancellations, and refunds. They can even help you find and recruit relevant affiliates for your industry.

Companies like Transistor, Podia, and Baremetrics trust Rewardful to power their affiliate programs and scale with their growth. Spencer Fry from Podia says, “Every other affiliate platform we look at was either insanely expensive or full of bugs, and sometimes both. Rewardful has been rock solid, and took less than 15 minutes to install. It’s the perfect affiliate solution for SaaS companies using Stripe.”

So whether you’re looking to start an affiliate program, partner program, customer referral program, or all the above, Rewardful lets you manage everything under one roof with a simple 15-minute integration. Get 30% off your first 3 months by heading to getrewardful.com/startups. Offer expires May 31st.

My third topic is around two books I read recently. One is called Billion Dollar Loser, and it’s a story of WeWork. The other is Invent and Wander, which it says it’s essays from Jeff Bezos. It’s his shareholder letters, which are (I’ll say) not super interesting, but then there’s an interview at the end that I found was pretty fascinating. It was excerpts from interviews.

Overall, I don’t recommend Invent and Wander as a read. It was interesting for me to read both of these books, and Billion Dollar Loser I would recommend if you want to be really angry at just the stupidity and this whole charismatic founder who convinces one person to give him a bunch of money and continues to just everywhere, the press is saying this isn’t going to work, it’s just real estate, and you know it’s a new way of doing things. This stuff is infuriating. It’s infuriating to me that people fall for this.

That said, I struggled with both these books and it was interesting as I listened to it because Adam, who is the founder of WeWork, was dating Gwyneth Paltrow’s cousin, and when he needed his early money he had these contacts in New York. He borrowed a million dollars from his girlfriend’s parents, buy the first building. I just couldn’t relate to that. I struggle with stories like this where, yes, he built something that winded up being worth something, but he didn’t start where the rest of us did.

The same thing with Bezos which I don’t know that I had realized that he mentions, when I was at Princeton and blah-blah-blah, and instantly I’m like, oh wow. Yeah, I went to a public university in California, University of California Davis, and I don’t even remember $3000–$4000 a year that I attended, and that was it. There were 25,000 people there and I went there to get an education. I didn’t go to Princeton, I didn’t go to Harvard.

He talks about, my parents were my first investors. They took out a bunch of money to make Amazon go. Again, unrelatable friends and family rounds, I always shrugged my shoulders, just like I didn’t have friends or family with money when I went to start things. I had to work a day job making $17 an hour, then I taught myself modern programming because I had graduated from public university. Everything was 10 or 15 years behind, so I was checking out books at the library to learn Perl and HTML because we didn’t learn web stuff.

I guess all that to say, this is why I like our community, the mostly bootstrapped MicroConf founder community that really is people coming together with the desire to build ambitious things, to provide value to the world, to change their life through frankly raising themselves up from making $4.50 an hour at their first job, or coming from a public school, or not even going to college. It just matters so much less in our circles and I’m really thankful for that.

I mentioned this in an outro of an episode the other day, but in case you didn’t hear it there was a study published in, and I forget the exact numbers, but it was like 80% of venture capital, maybe 90% of venture capital in any given year goes to people who’ve attended Harvard or Stanford. I was curious in that, in TinySeed, we’ve now done 3 batches of companies, 41 companies we’ve invested in, and I posted, I’m curious. Did anyone here go to Harvard or Stanford? I was like, no criticism if you did. I’m just curious out of all the founders that we have. I didn’t even know the founder count is now. It’s probably north of 70 if I were to guess.

Then I said, I went to a public university and a public high school, a public grammar school in junior high. People are weighing in and laughing, like, no, I went to this junior college or I didn’t even go to college. This (I think) is why people start to talk about founding startups being a meritocracy.

While I do see insiders making it, Jason Calacanis is a good example, I like the fact that he was from Brooklyn, didn’t know anybody, just hustled, became a journalist, an investor, and a founder. I just have a lot of respect for what he’s built. You can like him or you can not like him, you can agree with him or not, but he’s worked really hard and built himself a pretty incredible life.

I admire that about him and other folks who have done that and truly did it without going to Princeton, having your parents as the first investors, traveling in circles with Gwyneth Paltrow and borrowing a million dollars from your girlfriend’s parents.

Am I saying that these folks, that Jeff Bezos or Adam don’t deserve it, they didn’t work as hard, that they shouldn’t have used those things? Of course not. Use every advantage you have. But I did find myself struggling with the stories of the early days of WeWork and Amazon. I struggle to relate to them because I’ve never been in those situations and I’ve never had the advantages that they have. I’m guessing if you listen to this podcast, that might resonate with you as well.

I like this community, I love being a part of it, and frankly I’m glad you’re here as well. I hope that this podcast or MicroConf or just something that I’ve worked on or touched over the years has been an inspiration to you enough that you are able to, hopefully in the long-term, change your life but in the short-term just keep going, just keep putting one foot in front of the other, and using whatever advantages you have to get that product off the ground, to get that next customer, to make the next sales call, to do the next sales demo, to ship that next line of code, and to build a business that brings you freedom, purpose, and allows you to maintain healthy relationships.

My fourth and final topic for the day is a question (I think) you should ask yourself as you’re building, launching, and growing your company. So much for being a successful founder is knowing yourself and a question that took me a really long time to answer—in fact is still in flux and maybe for a lot of you in terms of getting your app off the ground, getting your company launched, getting traction—is what are you really good at? What are you naturally gifted at? Or what do you really want to get better at and something that you find yourself drawn towards? Other people often say that’s really hard, but you’re exceptionally good at this.

I want to say that in terms of shipping software, of course, being a good developer counts, but in terms of building a business, unfortunately, it doesn’t count for this question because there are a lot of good developers who can write code and ship code. There are even a lot of good (I’ll say) developers and UX folks who can ship a good product, so being good at product, let’s set that aside. What are you good at aside from that?

I want to give you a few examples. You may know Matt Wensing. You’ve seen him on Twitter, he’s a TinySeed batch one founder, and he’s working on Summit. That’s @usesummit on Twitter and usesummit.com. As I’ve watched Matt build, ship, and iterate, even evolve his product, what he seems to be really good at is connecting with other people, networking, and building relationships.

He’s a developer, day-to-day writing code. He came on this podcast and said, I don’t love doing sales, but I’m good at it. He’s good at having conversations about partnerships. He’s a phenomenal business development guy. He came to one MicroConf and he met all the people that he needed to integrate Summit with. I think it was Baremetrics and ProfitWell. I guess the original from ChartMogul there, but he didn’t even ask me for intros. I knew these people. I think he just went up and started building relationships. Suddenly, they had integrations and they were cooperating.

That is a super power, and it’s a super power I don’t have. But some people do, and if that’s you, you should take advantage of every advantage you have, and therefore set yourself up for success by getting into a space where business development, enterprise sales, partnerships, and networking can be an exponential driver to the business.

If you go into something where it’s all SEO, Facebook ads, and you’re selling for $10–$20 a month, I guess you could do partnerships and affiliates. There are ways to do it, but it’ll be a real exponential driver if you have larger contracts. There are just certain spaces where […] makes sense.

Another example is Ruben Gamez, who has been on this podcast several times. He’s building DocSketch and he’s TinySeed batch two founder. He’s good at building and managing teams. He’s good at a lot of stuff, but he’s really figured out marketing. As a developer who taught himself how to market 10–12 years ago, he has really doubled and tripled down on SEO.

He still runs Bidsketch but went to start his other app, which is again DocSketch, electronic signature. He was looking for a space with massive keyword volume, and less worried about the difficulty because he knew that that was a super power that he had developed and he had built, and thus wanted to get into a space where that would have a massive exponential upside for his business.

There are all kinds of things you can be good at. You can be good at building an audience. You can be great at having stage presence and maybe building a podcast following, being on YouTube, public speaking. Maybe you’re a great writer and it’s going to be a big content marketing and SEO play. Or maybe you have skills that don’t translate to SaaS apps and maybe you don’t go that route at all. Maybe you decide to launch courses.

There are other ways to use your gifts, but if you’re great at doing webinars and being on camera, then I would lean heavily towards getting into a space where doing webinars, getting on camera, and doing conference talks are going to exponentially move the needle. This is something that took me way too long to realize and recognize it myself, so I think a lot of these solo adventures when I have frameworks to make points, I’m talking to myself from five or six  years ago.

To cap off this topic, of course, I will name the exception that proves the rule, and it is Derrick Reimer who’s building SavvyCal. Derrick is exceptional at product. He can design, he can build, he ships features like a team of five people. If you look at how often he’s shipping, it’s amazing. You could say his gift is building in public. He’s developed that.

Obviously, he’s developed an audience on The Art of Product podcast with Ben Orenstein. You could say he’s good on the mic. He developed that. If you go ask him, he wasn’t good at it when he first started. He was very nervous about it. But he’s someone who is so far off the charts in terms of his ability to not only write code but to design amazing features, ship the right things at the right time, and build them quickly as a one-person-team. He is using that to his advantage by competing in a space with a number of large competitors, essentially using his velocity to outmaneuver them, and then hiring out the things that maybe are not his core gifting.

As you probably know, he’s hired Corey Haines, who’s helping him with all the marketing efforts these days, and they’re obviously seeing positive results from efforts from both Derrick’s ability to ship features quickly and Corey on the marketing side.

To put a bow on that, so much of being a successful entrepreneur is knowing yourself. I do think it’s worthwhile asking yourself the question, what are you really, really good at? Then looking at building products that can exponentially benefit from that unique skill set.

This is the final week of our Rewardful sponsorship. I really want to thank Rewardful for supporting Startups For the Rest of Us and supporting independent SaaS founders. We haven’t had many sponsors of the show and it’s not something I plan to do every month, but sometimes there’s just a really good fit, it makes a lot of sense to do it, and helps us have the budget to continue with the transcripts. You may have seen us putting more effort into social media and video clips, and all that takes time and money, so it is helpful to have support from companies like Rewardful.

As a reminder, Rewardful has everything you need to start referral marketing for your SaaS, your membership, or ecommerce business. You can get 30% off your first 3 months by heading to getrewardful.com/startups. The offer expires in just a few days—May 31st—and I like to roll their final ad spot here.

As a reminder, today’s episode was brought to you by Rewardful. Rewardful is quickly becoming the go-to platform to set up affiliate, referral, and partner programs for your SaaS membership or subscription business. Rewardful handles all subscription billing scenarios such as free trials, upgrades, downgrades, cancellations, refunds, and prorated charges out of the box with their simple 15 minute set up.

They’re the only platform that has a built-in affiliate finder that crawls the web and surfaces high-quality relevant affiliates for your program. Simply search by keyword, competitor, or alternative names, and reach out to the best affiliates in your market to take your program to the next level. Check them out at getrewardful.com/startups to get 30% off your first 3 months. Offer expires May 31st.

Thank you so much for joining me once again for this Rob solo adventure. I’ll be back next week in your earbuds with our regularly scheduled program, probably a conversation with an interesting founder, maybe bootstrapper news roundtable. I’m really enjoying the variety of the show these days and I hope you are, too. I’ll be back in your buds again next Tuesday morning.