Episode 629 | TinySeed Tales s3e6: Looking Ahead to $1M ARR

Rob Walling: Welcome to TinySeed Tales. This is the final episode of season six, where I spoke with Tony from CloudForecast and covered their journey for just about a year when they were part of the TinySeed accelerator batch. This episode serves as a nice capstone to the season. We reflect on where they’ve come from, and we look ahead at where they’re going. Thanks so much for joining me for season three of TinySeed Tales. Feel free to reach out at Rob Walling on Twitter. And let me know if you enjoy these episodes and would like to hear a season four.

And with that, let’s dive into this episode of TinySeed Tales. It is very hard to switch from being tactical where we’re at right now to being more strategic and looking at the bigger picture of our business. And it does feel very scary and it’s hard to remove control over what I’ve been doing for the last three or four years. Welcome back to TinySeed Tales. A series where I follow a founder through their struggles, victories and failures as they build their startup. I’m your host, Rob Walling. I’m a serial entrepreneur and co-founder of TinySeed. The first start accelerator designed for bootstraps.

This is the final episode of our season with CloudForecast, the AWS cost monitoring service. Today, Tony and I are going to revisit some of the most prominent challenges and milestones that the business has faced over the last year or so. Sir, it’s been two months since we last spoke and I feel like there’s a lot to catch up on.

Tony Chan: Yeah, we had MicroConf. That was really cool. Good seeing you in person and TinySeed retreat and we’re at the end of TinySeed. So a lot has happened. Every time we meet up, there’s always something crazy going on. Rob Walling: For people to level set, this was MicroConf in Minneapolis in early 2022. And you had been to MicroConf before?

Tony Chan: No, this was my first one.

Rob Walling: Was that? Okay.

Tony Chan: Never been. So it was very overwhelming, but overwhelming in a good way. So I really enjoyed my time.

Rob Walling: Awesome. Think you’ll come to a future one?

Tony Chan: For sure. I think this might be a mainstay of when we go to every year. I think the big thing we’re looking forward to is just reconnecting with people that we met in person or met for the first time. But I think this is going to be something we go to every single year. We got hooked.

Rob Walling: It happens to the best of us and it really does happen to a lot of people. And there’s a reason we have a high return rate because it is for me, just because I put it on doesn’t mean it didn’t change my life too. And the first several years for me were like, oh my gosh, we’re building a community of like-minded people. And everyone here is that. I think someone use the phrase, we’re a band of misfits. It’s a bunch of boot strappers. You don’t ever see this many bootstrappers, especially with this focus in a room. And they all know what our stupid acronyms mean and they all know what you’re going through. And the roller coaster stuff we’ve talked about on this podcast. They’re all doing it too. Tony Chan: Yeah, it’s definitely re energizing, it was a bit of therapy too, because a lot of the dinners that I had, everyone talked about things they were going through and everyone can relate and it was really nice to get a lot of things I’m struggling with personally or things I’m doing well in and people understand and they can relate and they know exactly what’s going on without you having to provide a lot of context and explain things. They know exactly what’s going on as well and know how to listen and provide the right advice at the right time. Rob Walling: So beyond MicroConf, you had mentioned last episode that you were looking forward to your content, an SEO getting rolled out. That you were getting started with being more strategic about planning it and that you were looking forward to learning more iterating and starting to see results. That was two months ago, update us on where you are. Tony Chan: I wouldn’t say we’re doing more of it as in we’re publishing a lot more content, but we’re being very intentional of how we approach things and getting the most of what we have existing. So one of the big focuses that we have right now is actually redesigning our blog. So it will be more conversion friendly or signup friendly or allow users to go through and climb through our content pieces that we’re pushing out and being very intentional about the UIX design. So we’re looking forward to that. Ironically, we are on Jekyll, but we’re moving to WordPress. And it was a very intentional decision for me. As a non technical founder, every time we needed to make a change or adjustment on our Jekyll instance, it requires Francois time. It requires this time to devote to it, to adjust some zings there’s custom work that needs to be done. Whereas for us, WordPress allows me to do what’s needed and test things out, try things out, and allows me to have control over it. And when we hire someone that is less of a barrier entry for them to adjust things. There is a lot of controversy with WordPress, engineers and developers don’t like it, but the utility of it’s still there, as long as you’re doing it the right way, it should work out perfectly fine. And there’s a lot of great blogs and websites and resources that are built on WordPress today. And it works perfectly fine. So Francois I think on his side, he was okay with that and he understood the utility and the business decision of moving to WordPress. So we’re doing that right now. So that’s a big undertaking of migrating everything over. And then from there it gives us a lot more options to try things out, moving call to actions, building pillar pages, and expand that further and just build resource pages. I think it’ll be pretty cool once we have that. So it’s almost like doing more with what we have right now. And not necessarily when we think of SEO content, we think of it. We publish more content. We publish more, we publish 10 articles a month, but it’s not about that. It’s like, how can we take what’s existing and make sure it converts. And users also are getting value of what we’re writing about too. So less is more. Rob Walling: That platform conversion process, I always find frustrating because for me, it’s like standing still. It’s like your end users, won’t notice and won’t care, but you need to do this for a business purpose. We’re on Squarespace, for example, with TinySeed MicroConf and the page load time sucks. And that’s not good in terms of SEO rankings. And so we have looked at migrating and the bottom line is, it’s probably $10,000 and a month of work. It just sets us back in terms of, to me it feels like wasted person hours that could be dedicated to something else like actually creating new content or helping founders or whatever. So to me it’s a little bit like dealing with legal crap. Oh, GDPR request. Oh, GDPR changed again. It’s just those things that are like plumbing that no one notices, but you need to do to keep your business afloat. Tony Chan: Yeah. I agree with you on that. And it’s hard, especially for us with limited resources. A lot of our customers don’t see about probably 50% of the work I personally do, or even Francois does when he’s refactoring a bunch of code and making sure the app is working or he is doing some baseline work in our database. So it sets us up for success and expanded features. Users don’t see that. And I wouldn’t say it gets discouraging, especially if it takes longer, but it’s hard to sit through that when I know that in the short term, it stalls. Rob Walling: When your team is moving mountains to migrate a site or refactor code, it can definitely feel frustrating that your customers probably won’t appreciate all the effort. But here moving to WordPress is in service of improving CloudForecast blog. Even if people aren’t noticing what’s happening behind the scenes, their content strategy is receiving some attention. You mentioned offline before we started recording that you have an article at the top of Reddit right now, which can cut both ways. It’s great because you get a lot of attention and it sucks because you get a lot of attention. So what is your current sentiment about being at the top of Reddit and having what thousands, if not tens of thousands of eyes on your piece? Tony Chan: Part of me is like, I want off of it. I want off this ride. I don’t know. I care deeply what people think about me. I care deeply about what people think about our company and how we approach things as well. This piece was supposed to be just fun and it’s just an informational piece. Rob Walling: It has a Photoshop picture of Jeff Bezos writing a rocket with a cowboy hat on or something. Tony Chan: Yeah, we talked about Jurassic park and there’s no part in the piece where we’re taking an absolute stance on how we reduce carbon footprint with data centers and all that stuff. We had a researcher who spent a lot of his academic career doing research. So the statistics don’t lie. I know that he’s vetted out further, but it was just so surprising to see so many assumptions and things that people extracted from the article. And it was very irrelevant to what we wrote about. So I think that was really hard to see and really hard to stomach. We are exposed and there’s no going back at this point. Rob Walling: Yeah. It’s tough. I’ve been to at the top of hacker news, many times with blog posts where I took a stance. Some when I didn’t take the stance, people were claiming top Reddit, top of dig back in the day. Each of these, it always feels like that and it sucks. Because what happens, what I found is there’s often a bunch of positive comments and then the further it goes on, people come out with these big, weird negative takes. Sometimes it’s true trolling. And other times there’s something about social media that the more it’s exposed to suddenly someone has to be the big contrarian and show how smart they are. And I’ve written 3000 word pieces that are as long as a book chapter that I’ll spend eight to 12 hours writing and someone will copy and paste, not even a sentence, but a single phrase out of it and make a comment on it out of context and imply that it meant XYZ when it totally doesn’t if you read even the sentence before it and after it. But it’s just like, it’s really, I think a tragedy of social media. Tony Chan: And I think if people met me in person too, they would not say that to my face or they’ll see that I’m a pretty reasonable person. Then we don’t take things that seriously. So it’s been a good day. It’s cool to see our article uploaded and people commenting and such, but it’s been heavy today to a point where I’m like, I’m probably just going to take the rest of the day off and sit on the couch and play some video games to get my mind off of it. Rob Walling: We’ll link to the article in the show notes if you’re curious. It seems like all that attention has taken a toll on Tony, but characteristically, he can see the bright side of having controversy on Reddit, ignore the trolls and focus on the engagement. To focus on something more positive, I caught up with Tony about Arturo, the new senior engineer that he and Francois had just hired in the last episode. They were pretty excited about onboarding and let’s check in. One of your big wins from last episode was you hired a senior engineer. Very, I have it in all caps very quickly, crazy fast. And one of the things that your co-founder Francois who was on the last episode talked about was, he was most looking forward to that developer Arturo starting and having another engineer and how that would basically be game changing for you and the company. And so I guess to start with, how big is your team now that he’s on board and how has that been progressing the onboarding? Tony Chan: We’re team of four now, including Francois and I, and that’s now including all the part-time freelance agencies and contractors we’ve hired to execute different parts of the business. But Arturo has been amazing same with when Kattya started, but he has brought a level of professionalism expertise from his previous job in bringing it here. And he compliments Francois really because he’s very thorough, not saying Francois is not, but he’s very thorough in terms of how he thinks about projects. He’s always thinking about customers as well, which is awesome and amazing. Even I think at this point, he’s about six weeks into his job and I believe on week two, he was already pushing code into production. And so it was extremely helpful. An example is, Kattya has been working on our full redesign of our app and we finally soft launched it recently to our users. We haven’t announced it publicly yet, but there were so many little tasks that needed to be done and it was very meticulous and very nuanced. And I think there was about maybe 60 tasks total just complete it. And he just jumped in and proactively solved some problems that we were trying to figure out, took care of projects that didn’t require Francois to jump in. He just say, Hey, I’ll do this. Let me connect with Kattya. We’ll figure it out. And Francois did not have to get involved. So I think for Francois it’s been a big relief on his side as he can push out ideas and get things started. And then Arturo from start to finish, knows how to research, do what’s needed to execute it and then come back to us and give us some ideas. So he’s been a huge help in that way. And we hope that as we grow out some of that team, he can be a really good force and good model for how we want our engineers to act and be like within our organization as a boost strap startup. I think the thing that I really respect about him and what he does is he’s very, very proactive. There’s not one part where he’s like, Hey, can I help? Can I help? Can I help? And his mentality is I can figure it out. I can figure it out. And that is the ideal startup founder mentality as well or someone who works at startup. It’s a problem that might be really tough, but I can figure it out. And I think it’s a very important skill to have versus, Hey, I don’t know what to do. I’m stuck. So I think that’s been the most amazing thing that I’ve noticed from Arturo’s productivity and what he’s been producing. Rob Walling: That’s great to find someone like that. That can go too far in one direction where someone will take two days to grind on something, but they could’ve asked you and you would’ve told him the answer in 20 minutes or something. I’ve had employees like that or team members, but it doesn’t sound like he’s doing that. It sounds like he’s a good balance of wanting to and being able to figure stuff out on his own. Tony Chan: Yeah. We put him on a pretty big project that he’s working on right now. He’s redoing a bit of how we approach some of our features and how we build reports. We send reports to our users about their AWS cost via email slack and Microsoft Teams. Right now the report is very black boxed. There’s not much you can change. You can adjust some threshold and such, but what you see is what you get, that’s the email. So he’s rewriting some of our backend and moving away from Scala and moving it back to Ruby. So that way we have some flexibility, because right now there’s some mismatch on the backend, but he’s rewriting some of those things. And then by doing that, we are going to give users a lot more flexibility of types of reports that they can see or template report. So if users want to send a report to the CFO and there’s some information that is particular to the CFO, they can select that template and send that type of report out. Or if there’s a specific DevOps team that they care about certain metrics, we’re going to give them the flexibility to be able to build those reports, to only show them information they want to see. So we’re very excited that he’s tasked with this pretty big project, but I think he’s up for the challenge, Rob Walling: Something you and I talked about in an earlier episode was that you had a part-time SDR and realized very quickly that wasn’t enough that you wanted to move more towards someone who’s working more hours. I know that since then, cold outreach wasn’t necessarily a great win for you guys. So you’ve pivoted away from that altogether, I believe. But you really said, I don’t think we’re going to do any more part-time employees. Might hire some contractors to do black box work or might hire agencies, but we have the resources and we need the speed of having people in house full time. Is that where you are? Is that where you sit today? Tony Chan: Yeah, I think that’s still very much our mentality and I think our mentality has evolved a bit, chatting with people and learning from that lesson as well. I think Francois, I put our heads together and what kind of company we want to build, what kind of employees we want to hire. And last episode, we talk a lot about intentionality of how we do that. And one of the big themes that Francois I came up with was like, we want to hire really smart people and give them the space to do really cool things, and have them be fulfilled with our jobs. And I think that’s what we’re seeing with Kattya. We’re seeing that with Arturo. That’s why Francois and I started our own business. We wanted the space to do something really cool. We wanted the space to help people out. We wanted the space to bring value to people. So yeah, as mentioned, that’s evolved from, if you hire someone part-time, it’s harder to have them invested in it, especially if they’re spending only 10, 20 hours. But someone that’s full-time 40 hours investing their career, very smart and sharp and they just want the creative space to do good work and bring good stuff to the table and learn. We want that to be something we can provide as a company now that we have more resources financially and the way our company’s growing, Rob Walling: Something else you talked about last episode was that your sales pipeline was increasing and you really have had some ups and downs during this year of troughs where you have no sales pipeline and it was disappearing and then nobody was closing. And then suddenly you had this really big enterprise deal. Come through the double juror, MRR overnight. And last episode, it seems like things were upbeat, that you were optimistic and that the pipeline was doing well. Where does that stand today? Have you closed any of those and what’s the pipeline look like? Tony Chan: Right now, we have a few enterprise deals that we’re actually about to close by the end of the month, the signals are very strong on that side. Some of the sales calls we had with particularly one, there’s no better feeling when we sell them to these companies, it’s multiple people are at the table, leveraging our product. And it’s a bottom up approach. So usually a DevOps engineer or engineering manager, they need to try out the product and then they need to get approval from people above them. So it’s a very bottom up approach. And every call that we’ve had with some of these opportunities, we just had to sit back and our point of contact sold our product to the team. We didn’t even have to say anything. And there’s no better feeling knowing that you have that advocate within the organization that gets your value, gets what you’re doing and understands where our value is and vouching for you within the organization. That is very powerful to me. So back to your question, we had a very stellar March in terms of signups and opportunities. We soft launched a free community plan too, we’re seeing really good traction on that. I don’t think we even publicly announced it and people are signing up using it, which is really great to see. April was not as strong as March in terms of just pure signups, but the pipeline of enterprise opportunities is relatively the same there. So we close these deals. I feel pretty good about where we’re at, but at the same time it’s still hard. We still have a lot of things going on. So it was hard to keep focused on that amongst the many other parts of the business that also need attention as well. So I think the challenge right now that we’re running into is, where do we prioritize the time? And what’s the most important right now? So I think that’s been a big struggle for me at the moment Rob Walling: That’s been the running theme of this season, is almost every episode you say something like, we don’t want to make the wrong decision on where to invest our funds. I’m not exactly sure where we should be investing our time. How do we do it intelligently? And should we deploy more and then used summit? And you said, we have a lot of capital and we doubled our MR. We have even more cap. And suddenly it felt like this weight. I won’t say suddenly, it was pretty much been the running thing this whole year. Where do you stand with that these days? Tony Chan: I feel like it’s getting heavier and heavier on my side. Rob Walling: Oh man. Tony Chan: I say that but it’s like, every month as we grew and as we got more capital, the weight gets heavier and heavier, especially on the business side, I’m solo right now. I’m the only one doing everything from marketing to customer success to support. Sales, Francois helps me out here and there, but it’s a lot. And we get more customers, the more people that we have to support. And the more log visitors that come in, the more pages I have to make sure they’re optimized for SEO and they’re published well and it’s promoted well and the whole process of content marketing that we’re running through. So the weight is getting heavier and heavier every month for sure. And I think, even though I’ve said it multiple times, but it’s been different themes in different ways. The cool thing is we’ve been learning too. We’ve been able to pivot, even though I might have dealt with an issue the previous month and where should I prioritize? We talked to a few TinySeed mentors and advisors and they give us some advice and we’re like, okay, cool. That is how we should approach it. And we execute on it and it makes things feel a little bit better. But yeah, it’s still a lot of work, especially for me. Not going to lie. I do feel overwhelmed more so than before. And Francois definitely agrees with that as well. Rob Walling: And I wonder if that’s something that’ll get better long term or if it’ll just continue. Tony Chan: One thing that was really helpful too, is I had mentioned that we were working with DemandMaven and that was a huge weight off my shoulders because they pretty much set up a pretty strong plan for us the next year on where we should be focusing on. I think one thing that you run into as a founder is those decisions you make, you always wonder if it’s the right one or the decisions you’re making at the moment, or you’re already in the middle of it, is it the right decision? And you talk about a lot. You’re making a lot of decisions without complete data or knowledge. A lot of it’s a educated guess of what you have in front of you. And the outcome of the Demand Maven research that they did with our customers were a few things. One is, they said you should invest in content and SEO. Great, that affirms our approach and what we’re doing right now. And it feels good to know that someone who chatted with our users who are a lot smarter than us in marketing have affirmed our approach of how we approach with content and SEO. So that’s really cool. So I think that has been helpful with that and getting a different perspective of our business, because I think sometimes when you’re in it so deep and you’re on a day to day, it’s really hard to step back and see the bigger picture and think strategically about things as well. Rob Walling: That’s the value of advisors, mentors, mastermind groups, and high quality consultants. They give you a sanity check, a second opinion when DemandMaven have been validated Tony’s content and SEO strategy, he had a massive weight lifted from his shoulders, but despite all the help and mentorship Tony’s received this last year, he’s still struggling with a different burden. As I reflected on this season of TinySeed Tales, I went back and listened to the first couple episodes. And something you said in the very first episode was that you wanted to get low end tasks off your plate, that you were still doing too much stuff in the business. And I don’t remember if the context was customer support and success or if it was internal ops and that stuff. Do you still feel that way or do you feel like you have been able to get some of those tasks off your plate? Tony Chan: I still feel very much that way. I think Francois framed it really well. He has gotten help and he has a lot of weight off his shoulders on the technical side. And that was a intentional plan for us because we want to iterate on features. We want to serve our users. We want to listen to their feedback and build product and features that they’re asking for. And now Francois is at a point where he can take a step back, think strategically, plan out some things at a higher level and be able to pass it off to his engineering team and whoever we hire in the future. Whereas for me, all those things I’m still dealing with. And I think on top of that, my learning process of SEO content marketing and what does that mean? So I think a lot of that has been very overwhelming for me and we still want to do that, be able to pass things off. And I think the big area that we’re looking into currently is actually hiring someone in SEO content. So we’re actually looking for a SEO content marketing manager at the moment. So we can hand off this big piece of marketing that I’ve been learning how to do and have someone smarter in place. So it frees up my time so I can work on other parts of the business, like customer success, closing sales ops, and so on. I think that would be a huge relief for me. Rob Walling: Yeah. I was going to offer the advice that I don’t think your next hire should be a full-time developer. You’re getting heavy on the dev side. Tony Chan: Yeah. We’re all set there. And Francois was like, Hey, I think you need some help. And I was joking with my wife the other day. If I had the opportunity to just brain dump everything I have in my head right now and put it on a list, it can be probably 200 pieces deep in terms of what needs to be done. I’m training myself to be okay with the business, not doing as well as other pieces to focus on one particular thing, which right now is how do we find that person that can fill in the SEO content marketing manager role. And that is my sole focus. So I’m using your trick of labeling a bunch of emails that I don’t need to look at right now, archiving it. And just once a week, just try to truck through it versus me feeling very overwhelmed, looking at it and doing it. That is not the priority. The priority for the business at the moment is to find someone on the marketing side to help and contribute and help grow our revenue. That is the number one priority. Nothing else matters at the moment. Rob Walling: I don’t think Tony will have much of a problem finding their content marketing manager, he and Francois have done a great job filling other important roles with smart driven people. They’re really committed to maintaining an intentional company culture that puts employees first. Building that culture didn’t happen overnight. CloudForecast started TinySeed with two founders and now they’re four people full time. Plus a bunch of part-timers and agencies. They have almost four ex that revenue from the time when they applied to TinySeed, they dealt with Francois’ paternity leave. Tony had to learn how to deploy capital and hire people and onboard them. It’s been a cool journey over the last 12 months. Now I’m thinking about what will happen in the next year. So there will be a TinySeed Tales where are they now episode in, let’s say a year where you come on, start for the rest of us. And we talk about what’s been your biggest win of the last year, your biggest loss whatever’s been going on with you. So in the spirit of wrapping this up, what are you least looking forward to in the next year? Tony Chan: Yeah, I think it’s not like I’m not looking forward to, but it is on the back of my mind. You’ve talked about it. It’s like you go from a startup to becoming a business, from a business to become a company we’re in between of a business and a company. So meaning Francois and I still have a lot of control on a day to day and we still contribute a lot and do a lot of things to push the business forward. And that’s great. But in order for us to be successful, we need to scale. We need to hire people. We need to put really smart people in places that we are bad at, or we just have a deficiency in. And I think that’s scary. We’re taking the control that we’ve had the last three or four years and giving other people the keys to do really great work. No doubt in my mind, they will be successful, especially if we hire the right people, but it is very hard to switch from being tactical where we’re at right now to being more strategic and looking at the bigger picture of our business and trying to become a company. So change is really hard. I think change is really hard for a lot of different people, whether it’s life or you’re moving or you’re moving to a new city. This is very much a change in our business right now where it does feel very scary and it’s hard to remove control over what I’ve been doing for the last three or four years. I’m sure Francois feels probably the same way, but with the different context of him being an engineering side. So this is needed to grow the business, but how do we approach it? How do we shift? I don’t know. There’s just so many questions that come from it of getting to that point. Rob Walling: I can’t wait to hear how it goes. And what are you most excited for over this next year? What do you hope has happened that you can talk about when you come back on the show? Tony Chan: Yeah, I think one is building more of the business side and getting people in the door, hiring people. As mentioned, we are working on a SEO content marketing manager hire at the moment. So getting that person started, hopefully we can have someone come in, maybe on the ops admin customer success support side as well. So that’s another thing off my plate and someone that can handle that as well. So maybe in a year and a half will be a team of six to eight people. That is determined obviously by MRR growth. And I really hope that, especially by the end of 2023, DemandMaven have been challenged us as like, can you double your MRR by the end of 2023? So right now we’re hovering around 450 about to approach 500K in ARR. They think that if we execute the plan to the T, obviously it’s more of a guidance approach rather than this is what you need to do step by step, but here are some gaps and such. They have confidence that we can hit $1 million in ARR. It is a very lofty goal. It’s very scary as well because it’s taken a lot of effort for us to get to close to 500K, think this is about year four for us. Can we do that in a year and a half and move another half a million in just a year and a half. They seem to have confidence to us. Some people do as well. So that is what I hope. Not saying it will happen, but that’s my hope is we hit 1 million by the end of 2023. Rob Walling: Best Of luck, Tony. I actually think you’re going to reach your next goal earlier than you think. And then it’s on to the next one. Thanks for listening.