Episode 703 | The Accidental SaaS Entrepreneur

Rob Walling:
Whether this is your first or 301st episode of Startups For the Rest of Us, welcome. It’s great to have you here this week. I’m your host, Rob Walling. This week I talk with Jordan Hansen, founder of Cobalt Intelligence, about his really interesting journey of becoming an accidental SaaS entrepreneur. 

Cobalt Intelligence is a SaaS that allows you to do business verification with Secretary of State data, using an API. And in the conversation you’re going to hear how Jordan just got there, almost by accident, that he really didn’t want to launch a SaaS. But he wound up building what is a pretty incredible business and has actually taken funding from TinySeed. You’ll hear us discuss that in the episode. 

I want to address that upfront, actually. I hope that, given this podcast has been going for 700-something episodes, I hope that you know that I don’t use this podcast as a commercial for TinySeed, nor for MicroConf. Obviously, I am motivated to promote things that I’m working on. If I’m running an event, I want you to show up. If I’m running an accelerator, and you want funding, I would love for you to apply. 

But the reason I bring folks like Jordan on and Matt Wensing, Derek Grimmer, Ruben Gomez, and other TinySeed founders I’ve brought on the show in the past several years is because their stories are interesting. They’re knowledgeable. They know how to communicate what made them successful. They’re willing to talk about both failures and successes. They tell their story well. There’s so much to it, and if a company or a founder has all that and can bring the thunder to this podcast, that I think can help keep you motivated or give you some strategies and tactics to succeed, I’m not going to exclude them from that because they happen to be part of MicroConf, or they happen to be part of TinySeed. 

Before we dive into that, tickets for MicroConf US in Atlanta next April 2024 are on sale. This event will sell out. If you’re thinking about coming to Atlanta, April 21st through the 23rd to see me co-host this event with Lianna Patch, and to see speakers like myself, Rand Fishkin, and several others, head to MicroConf.com/US to grab your ticket before they sell out. We had an amazing event just a few months ago in Denver, and I expect the event in Atlanta to be no different. So MicroConf.com/US to grab your ticket today. 

And with that, let’s dive into my conversation with Jordan. 

Jordan, welcome to the show.  

Jordan Hansen:
Hey, thanks, Rob. It’s good to be here.  

Rob Walling:
Yeah, it’s great to have you. So Cobalt Intelligence, your H1 is “Keep up with your pipeline. Automate and integrate SOS, court, and other public data into your MCA underwriting process” – wow – “so you can move forward quickly and confidently.” I-  

Jordan Hansen:
Does that feel long?  

Rob Walling:
Well, no. I don’t know what SOS and MCA is. So it’s like you have these obviously industry-specific terms in your H2, your subtitle in essence. So either that’s a really good decision because you’re speaking exactly to your customer, or you’re alienating people. But that’s for you to let us know. Translate that for us.  

Jordan Hansen:
Yeah. The good thing is I can answer this with confidence because I hired Lianna Patch, and we worked together. She crafted these headlines exactly like this. Whether it’s the right decision or not-  

Rob Walling:
I’d feel pretty confident-  

Jordan Hansen:
I [inaudible 00:04:36] to Lianna.  

Rob Walling:
At that point.  

Jordan Hansen:
Exactly.  

Rob Walling:
Translate for me what I just said then, because there’s a bunch of entrepreneurs listening to this right now, who are like, “I am not sure what this product is”. It’s CobaltIntelligence.com, if folks want to check it out.  

Jordan Hansen:
What we do is we help people in the finance industry. I say banks, but most of the time it’s people doing alternative lending. They’re not banks because they don’t have the volume we look for. But when a bank or a business needs capital for a pizza restaurant, and their oven goes down, they need money to replace that oven immediately. 

If they go to a bank SBA loan, it’s going to be a long time to be able to get that cash. They’re going to go work with an alternative funder, which normally can get them that cash, working capital, something like that, a lot quicker. They have to do the underwriting on this business so they check things like the SOS, which is what we call, it’s the Secretary of State. When you start a business, you register your business. We’re going to do things that check. “Okay, is this business in good standing? When did it file? How old is it? How much history it has?” And then court judgments. Has there been a bad history of credit? That kind of thing, that’s where we’re going to help with these funders. Right now, they’re doing that manually, and we help them just automate that process.  

Rob Walling:
So manually, meaning I am a business in Maine, applied to get a loan from us, or 500 businesses in Maine applied today to get a loan. There’s a lot of volume, you were telling me about.  

Jordan Hansen:
A lot of volume.  

Rob Walling:
I’m going to go to the Maine Secretary of State website, which I know is one of your favorites, and I’m going to log in. I’m going to type in, oh, this business name. Do they exist? And are they in good standing? And do they have a tax bill? That kind of stuff. And you’re saying you have that data for all 50 states, that they can just plug into via – I know there’s a web interface – but it’s mostly an API. Is that right?  

Jordan Hansen:
That’s right.  

Rob Walling:
Your product is mostly an API, yeah.  

Jordan Hansen:
It’s an API. The fact that it’s public data, a portal doesn’t offer a whole lot to them because if they have to go to my portal, then they may as well just go to the state. Again, that’s why banks aren’t great. I remember just talking to a bank last week and they said, “A thousand a year, we could probably do that.” I’m like, “No, our plans start at a thousand look-ups a month.” And they’re like, “Oh, that’s a volume. We need higher volume.” They’re processing hundreds of applications a day.  

Rob Walling:
Okay. I want to get into a little later, because you’re a developer, and you built this yourself. I want to talk a little bit about how you get all that data, because I’m sure people are wondering, “Is this freely available? Is just JSON blobs that are on GitHub that you’re downloading?” 

But before we do that, talk about where the company is. As I often tell people, you can give revenue, you can give team size, just whatever you feel comfortable with to give the listeners an idea what stage you’re at.  

Jordan Hansen:
Yeah. Right now we are three or a team of three, and we are profitable, so we feel pretty good. Two of those are US-based, both engineers as myself, engineer-founder, and then another engineer to give an idea of how much salary that is. We have one offshore marketing person. And we’re doing, thankful, thankfully, we’re profitable as of it’s been about, I guess, the last 10, 12 months we’ve been profitable.  

Rob Walling:
What’s your main channel for finding new customers? Seems like a pretty specialized market.  

Jordan Hansen:
Yeah, it’s interesting because I didn’t know this market existed before. I started building, I was building things constantly, and I just was building them in public, blogging about it, and then making YouTube content is where it started. And then people started reaching out and say, “Hey, I could use this data in my business.” That’s really what we’ve kept it doing. We just continuously are making YouTube content. It’s shifted how we focus that, but it’s still our main bread and butter is content, whether it be blog content or YouTube.  

Rob Walling:
Yeah. That actually takes us back to your origin story, is that you had a good job with golden handcuffs, working at Lenovo. Were you a developer, a senior engineer there?  

Jordan Hansen:
I was, yep.  

Rob Walling:
Yeah. You didn’t want to do a SaaS because you knew SaaS was a drag?  

Jordan Hansen:
It sucked. Oh my gosh, it was terrible.  

Rob Walling:
Because you built one within Lenovo, and it was just a fiasco. Is that what happened?  

Jordan Hansen:
Yeah. It was fine. No, the product was good. We had built a good product. That’s why they hired me in fact. They didn’t have any, they only had on-prem software they were selling. They wanted to build us a cloud-based software. I had done that before. They hired me to focus on that, and they built the whole team around us to build this software. But it was a good product. We did a good job. But it was so hard. They’re Lenovo, so they had a lot more security restrictions, a lot more red tape that we had to get through. But I was like, “I’m never building a SaaS, never.”  

Rob Walling:
That’s why I say stair step. For folks who haven’t built one, they just don’t know how hard it is that first time. And being at a big company doesn’t make it any easier because you have, like you said, all the security, there’s just so much more. 

Paul Graham had this expression when they got acquired by Yahoo, and he said, “We got in there.” I don’t know, they’re 20-somethings at the time. This is in ’90s. He said, “Once we started working at a bigger company, it felt like running through water.” 

Have you ever tried to run in the ocean?  

Jordan Hansen:
It’s so hard. Oh, yeah.  

Rob Walling:
I can’t get anything done. What would take a week at a startup will take two months at a big company, and it’s infuriating. I’m not saying Lenovo is good or bad. I’ve just worked there.  

Jordan Hansen:
That was a good team. Honestly, we were probably almost like a little company within the bigger company, so I feel like I loved it. They were good people and a really good team. And we made a lot of really awesome stuff. But it still was, like you said, there was still a lot of, we had to go security checks all the time.  

Rob Walling:
It’s challenging, yeah, yeah.  

Jordan Hansen:
Yeah, it was hard.  

Rob Walling:
So you’re working the day job at Lenovo. Am I right that you were creating blog and YouTube content around web scraping just as a hobby?  

Jordan Hansen:
Yeah, I needed something. I remember listening to a book by John Sonmez. I don’t know if you’ve heard of him.  

Rob Walling:
Yeah.  

Jordan Hansen:
Anyway, he has this book, Soft Skills for Software Engineers, and he said, “You should write a blog.” And I was like, “Everyone says to write a blog.” 

But I was determined. I really wanted my own business. I had one in college, and I was like, “I know that’s where I want to be eventually.” But I didn’t want it to be just a dream. “I got to take some action.” So I just started writing a blog post a week about web scraping, about getting data publicly. 

And the blogs, they sucked at the beginning, and they probably sucked a lot during the way too. But it forced me to find the cool stuff. I had to like, “Okay, what am I going to write this week? Let’s find something I can web scrape.” And that really is how it started.  

Rob Walling:
Why web scraping? Is that something you had done at a job, or you just decided to do it?  

Jordan Hansen:
I had a friend that hired me to do a contract job for his business, and it was around web scraping. I thought it was fun and interesting, and I was trying to pick something that wasn’t, a little more on the fringe. It wasn’t something that everyone was doing. I felt maybe intimidated to do just software because there’s really good software engineers. I’m pretty good, but I don’t know if I’m the best. But I felt like this was something a little more, that not every single software engineer could say they were good at.  

Rob Walling:
Yeah, I like that, picking a specialty, a niche from the start. So you’re blogging, and were you doing YouTube?  

Jordan Hansen:
Not for a while. I did probably blogging for a year, every week for probably a year plus. And then I switched over to YouTube as well. 

I just started… Honestly, my YouTube videos at the beginning, we were just down doing that Tennessee retreat, and we had breakout mastermind groups, and people talked about some wins you had. And I just harped. YouTube is so, so good. My videos at the beginning, it literally was an hour and a half of me writing code. That was it. 

Now, I wasn’t entertaining, definitely not, and I probably had 30 to 50 views on it. But I just kept making them. Because I was building stuff every day, I’d wake up early in the morning, it was like 5:00 A.M. or 6:00 A.M. I’d record before my day job and just code whatever stuff and put it all, just throw it up on YouTube, no editing at all. 

The thing is, it just builds. People started following more and more. And then I get people reaching out, like, “Hey, I need this data”, or “I need different things”. Why not do it?  

Rob Walling:
That’s interesting. How much… Just hearing you say, “I shipped a blog post every week for a year”, that’s something most people won’t do. 52 blog posts is nothing. That’s nothing easy. And then to create videos, you’re like, “Oh, I was just recording.” You kind of matter-of-fact it when you say it, but it’s a lot of work. You weren’t making money off it. You didn’t have a huge audience, not like you had tens of thousands of people. You probably had hundreds, I’m guessing, reading and following. So it’s not that much. Why did you keep doing it for that long? What was the internal motivation that kept you going?  

Jordan Hansen:
That’s a good question. I really think it was because I was that determined to find… I wanted a side business. I wanted a business. I wanted my own… I wanted to be a Rob Walling one day. 

I didn’t know who you were at that time, but sorry, don’t be offended. 

But no, I wanted to have my own business, and I felt like I love the people I worked with, but I wanted to be my own boss. I did not like being told what to do. Lenovo was probably as good as it could have gotten for a software job, but I wanted that, to have built my own thing.  

Rob Walling:
You have the genetic flaw we call entrepreneurship.  

Jordan Hansen:
That’s right.  

Rob Walling:
I often call it unemployable.  

Jordan Hansen:
That’s right.  

Rob Walling:
I remember becoming unemployable. I still had to work for a few years after that. But the moment where I was like, “Oh, I’m never doing this again. The moment that I can quit this job, I’m done, and I’m never going back.” 

Okay, so you’re doing it nights and weekends. You’re shipping these videos. So how does that turn into launching a SaaS that you said you didn’t ever want to do?  

Jordan Hansen:
Again, I was there at Lenovo, and I had a plan. I was like, “I’m going to get to a point eventually where I can quit.” I started saving my money more. 

As the videos came out, I would start to get some people doing one-off contract work. They’re like, “Okay, can I get this done? Can I get this done?” And I occasionally signed people up for recurring… They had me on retainer, essentially, to collect data for them. So I had some income coming in. I was making some money there, and I was selling occasional things. I would get some sponsored videos and posts too occasionally. So I probably had, I don’t know, 10 grand to 20 grand a year on the side that was coming. Not a lot, but I kept saving the money, and I was like, “Okay, with the goal to quit.” 

That’s kind of how it took me. Now, I didn’t get to the SaaS part. Even when I quit my job at Lenovo, I was like, “Okay.” I told my wife, “Hey, we have enough money in the bank that we should be good to live how we are for two years, I think, with the revenue we have coming.” And so she’s like, “Yeah, totally, let’s do it.” 

I quit. Again, no intention of doing SaaS. I was just going to do contract work, build something. But recurring revenue was really, I wanted that. I had done things before where I had sold a one-off, and I hated it, just because people came back to you, especially when it’s software, they want tweaks. I hate getting in that pricing discussion. I just wanted recurring revenue is really what I wanted.  

Rob Walling:
Was that 2021?  

Jordan Hansen:
That was 2021.  

Rob Walling:
This was going on, yeah. You took the leap with two years of savings in the bank. Congratulations. 

I know a handful of entrepreneurs that have done that. I was never able to do it, just to pull together that much cash to be able to do it. 

I would be super… For me, watching my savings burn down would be pretty tough. How did that feel? I’m sure the first day you quit, and you show up for your new job, which is working for yourself, got to feel amazing.  

Jordan Hansen:
It was amazing, right. Oh, so good. It was the best feeling ever.  

Rob Walling:
And did you, over the course of the next weeks or month, did you start to feel a little bit like, “Oh man, I got to make this work fast because I’m going to be losing tens of thousands of dollars over six months,” or whatever.  

Jordan Hansen:
There was stress. I don’t think it was intense stress. I had enough. Again, when I quit, it was a mix of savings, plus I had money coming in. I was like, “Oh, I’ll just keep having to build these customers, and I’ll have enough to take it over”, whatever it is. The problem was I was building products, but they weren’t really software products. It was more like a weird mix of, “Hey, I’ll send you an email a day with data.” It’s probably a SaaS kind of. I didn’t have any login. I’m just going to send you a CSV and invoice you once a month, and you’ll just pay me. That’s what I wanted to build. I was like, “No login, no SaaS, and we’ll just go from there.”  

Rob Walling:
You applied to TinySeed, and you were pretty early. I’m not sure I remember. I saw you sent me some notes, and I didn’t remember you being as early as you were, but…  

Jordan Hansen:
I don’t know. Maybe you read it wrong, and that’s what got me in because I felt pretty lucky.  

Rob Walling:
Did you apply in ’21 or ’22?  

Jordan Hansen:
I applied in ’22. In fact, I didn’t even know what TinySeed was in ’21, didn’t know what you were in ’21 until the very end.  

Rob Walling:
Yeah. Tell us how you got there then.  

Jordan Hansen:
Yeah. I started actually building a software business. It was just these products that I was building. As I got to more of this public data, I was just building up connections, and I was like, “You know what? This would be kind of cool to use and sell.” And then I had some people reach out and say they wanted it. That’s what exposed me to it. “So, okay, I think this is something where I could actually charge as a software as a SaaS or a software as a service business.” 

I started looking around for podcasts. I’m a big consumer of podcasts, and someone recommended yours. They were like, “Hey, this is one of the top ones you should listen to. I started listening to it like crazy. That’s where I got exposed to TinySeed, and it drew… I’m married with three kids. I’m 39 now, so when I quit, I was mid-thirties. I wasn’t going to be someone that’s going to go venture and work 80-hour weeks. I’m never going to do that. 

It was really a decision of… Funding was never on my radar, didn’t want it. But what you kept talking about, this lifestyle, you were saying, the type of business you were building, what TinySeed showed, promised that really appealed to me. I was like, “Maybe.” But I felt very imposter. Again, I didn’t want to be in the software business. I wasn’t someone who had been doing software since college. It was a whim. It was 2022, spring of 2022. I think you probably had said, “Hey, the application’s a piece of cake. Check it out.” And it was a piece of cake. You or Tracy, I don’t know who built that. I think Tracy built the application.  

Rob Walling:
Tracy did.  

Jordan Hansen:
It was so easy. I went and looked at it, and I was like, “Really? I can answer these questions.” I had to look up, I think, some of the definitions because I was like, “I don’t know what these software terms are.”  

Rob Walling:
Right, right. See, that’s something that I want folks to keep in mind. If you’re listening to this, and you feel like an imposter, but you have a business that’s doing revenue, and you’re like, “Oh, I should never apply to TinySeed because I don’t qualify”, or whatever. That’s not usually true. 

I also want to call out, this podcast and my interviews are not advertisements for TinySeed. You just as well could have gotten involved with the MicroConf ecosystem, never applied to TinySeed. And that’s okay too. The reason we have all this stuff, we have mastermind matching for people who want to pay for that. We have TinySeed funding and the accelerator for folks who want to participate in that. We have the state of independent SaaS for people who want to… We have in-person events. Some people want to go, some people don’t. 

I don’t have an agenda with… You’re not on here because you got into TinySeed. You’re on here because you have an interesting story to tell, and I think it can inspire people who may not want to build a SaaS, and you did, or may have a SaaS, but think they’re an imposter, which you did as well. You know what I mean? 

Now you’re much further than that down the road, with full-time employees and profitable and growing and all that. That’s the point of the conversation is to inspire folks to follow the path that you followed. 

You must’ve been surprised then. Do you remember what your revenue was?  

Jordan Hansen:
Yes. I had been selling, like I said, I had been selling other products. I had some recurring revenue, but it wasn’t the SaaS revenue. I had about $4,000 a month in that, which felt okay. But I felt like it was cheating to almost list it. I had to put a disclaimer because I only had $300 of actually the SaaS revenue. Had just launched it, very pre-beta, so barely anything was coming in there.  

Rob Walling:
We funded a few companies like this, where there’s a mix of revenue. But if it’s recurring, if the 4,000 was one-time, or it was truly consulting revenue for dollars for hours writing code, we would’ve said, “Get the SaaS further along. Please reapply.” 

But I remember there being… It was like, “Well, it’s recurring revenue, and it’s heavily related. It gets you to Ramen profitability, close to default alive.” We’ve invested in a handful of businesses like that, where it’s like, “Ooh.” Actually, we really like APIs anyways, just as a business model. We’ve had some pretty big successes within TinySeed. So we like them anyways. We like you, we like developer-founders, which you are. And we liked that you had traction in this space, where we’re like, “This is a niche of a niche. We don’t have any other A, no other TinySeed companies in it, but you can dominate.” 

I really like vertical software. We do at TinySeed because you can dominate it. You’re not competing with whoever – Microsoft, Google, Facebook. You don’t have to be the best marketer. You just have to be better than the other five in your niche. Obviously, you are. 

I want to give folks context, who think, “$300 MRR? How did he get in?” There’s more to it than that. You had more than 4,000 in revenue. It happened to not all be from the SaaS, but there’s nuance. This is when people say, “Should I apply to TinySeed?” And it’s oftentimes, if you’re in doubt, do it. And we’ll just talk. We’ll talk it out. I want to figure out here more about what the revenue’s from and just more about how the business breaks down. 

Now, as I said, I don’t want to make this a commercial for TinySeed. But I know you’ve gotten so much out of TinySeed, and I want to give you the opportunity to say that because it seems like you were… I don’t know if you were surprised by that, or maybe you’re surprised by how much you’ve gotten out of it. Just talk us through it.  

Jordan Hansen:
Yeah. I want to say Rob didn’t pay me. He didn’t ask me to come on and talk about TinySeed. If you’re listening to this podcast, you probably know not the hard salesman of this. He’s very low-key, and that’s how this was. 

But before this, I was a solo founder, feeling like an imposter, did not have a history of… I was a corporate job guy. There’s entrepreneur guys that I feel like they’ve been in software forever doing these things, and they were really comfortable with his ecosystem. I was not. Whenever I was having a decision to make, I was questioning it, even should I even stick with this product? That was a big decision I had all the time. And it was constant. I was asking my wife, but she didn’t know either. So I had no one I felt like I could trust to talk to about it. 

And I wanted a co-founder, but I had had co-founders in the past, and so I did not want a co-founder. I wanted the dream co-founder that would work. So applying to TinySeed, the money was good, but I needed someone to talk to. I wanted a community to talk to and say, “Hey, is this crazy? Is this not?” Honestly, it’s probably been a big… Getting into TinySeed was A, validation of my idea, that, hey, this actually is something I could focus on. 

I thought this, gone back and thought about this a lot. I don’t know if I would’ve focused on it. I probably would’ve chased another shiny thing. “Oh, someone else asked me about this, so I’m going to try to build that now.” The fact that I could now focus on it, which I feel like most businesses, when you focus on one thing, that’s where the growth happens. You just have to keep going. It’s going to suck for a while, and it’s going to continue sucking, probably for a long time. But keeping with it really just, that’s where the dividends come.  

Rob Walling:
It sounds like it made a big difference. And it’s not, as you said, the money’s the money. It’s fine. The community, the mastermind we match you in, the other folks that you can hit me up… You and I just had a call about your strategy for the next six months right before recording this podcast episode. You can just hit me up, get on my calendar at any time.  

Jordan Hansen:
Huge difference, yeah.  

Rob Walling:
And there’s 250 founders in TinySeed. We have 40 or 50 mentors, and you can hit them up. That’s really the value, I think, of… And to be honest, as an entrepreneur myself, I’m still a startup founder. TinySeed and MicroConf are startups. We have found product-market fit, but we have to worry about pricing. We have to worry about moats and this and that. That’s one of our moats. Anybody can raise money and hand out checks. Who can build a community like TinySeed? Not that many. And who has the alumni network? And who has the mentor network of the B2B SaaS founder  

Jordan Hansen:
It’s a special thing. It really is. They’re some of my best friends now, fellow TinySeed founders. When I go to the events, it’s a blast. You hang out with them. We just had the first one where we could bring some family, and my wife came. And she’s not really the most social person sometimes, but she was loving it. She was like, “Oh, these people are amazing.” I’m like, “Yeah, this is what I talking to you about. This is why I come home, and I’m like, ‘Hey, that’s my best friend, Jason. Hey, that’s my best friend, John. These are my guys I hang out with all the time.'”  

Rob Walling:
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Yeah, that’s cool. 

All right. In true Startups For the Rest of Us fashion, I have a question for you. 

When did you know you had product-market fit?  

Jordan Hansen:
Product-market fit, that’s a tough one. You hear people, I heard your podcast with Noah Kagan. I don’t know, this came out just before we were, the last one I listened to anyway. And he’s like, “You’re going to know.” I guess I kind of know. People are paying me, and I’m living. I feel very lucky for where I am. But man, I’m just constantly faced with doubt. What else can I do? Am I there enough? I don’t feel like we’re exploding yet, but since we joined TinySeed, we’ve probably been four to six, so a lot of growth since we’ve joined, which has been amazing. It’s easy to have those multiples when you only have $400 when you join. Doesn’t take much to multiply. But I would probably say when I knew I had product-market fit, it’s never, not yet.  

Rob Walling:
See, I think you’re being modest. The fact that you have people paying you thousands or tens of thousands a year means that you’ve built something that people want and are willing to pay for. Now the question is, you usually have product-market fit with your core customers who are not canceling. The question is how many of those exist in the world? And can you reach them at a scale? And what’s the switching cost? There’s all this other stuff. 

We might say, and as we usually say, their product-market fit is not a binary. It’s not a one or a zero. It is a continuum. Product-market fit also, per my conversation with Ruben a few weeks ago, you can have strong product-market fit with a certain group or with a certain product. And then you launch this second piece of it, and it’s like, “Oh, we don’t have it with this new customer type. There’s multiple ICPs, ideal customer profiles.” 

I think you have it strong with a certain group of folks, and I think you’re just in the process of figuring out can you expand that? Yeah. Or can you strengthen it with them?  

Jordan Hansen:
Certainly, maybe some of the things you’ve noticed is when you get on a phone call with someone, and it’s the easiest sales call of your life. They’re just like, “All right. I’m ready. Let’s go.”  

Rob Walling:
Oh, yeah. Yeah, that’s what it is.  

Jordan Hansen:
Then you know okay, okay, there’s something here. I don’t have to convince these people, I don’t have to sell the vision. They get it. They’re already looking for it. When that happens, that’s probably what it feels like.  

Rob Walling:
I teased it earlier, about you have all this data, you have an API. Where does this data come from that you have in your database that you’re basically selling access to?  

Jordan Hansen:
Yeah. Like I said, it’s mostly public information. Pretty much all of it is public information. Our customers, they do buy data from places that aren’t public, but I worry… You worry about credibility of that data. 

Anything we get, it’s something that we have some kind of integration with a state. A lot of times we even purchase the data from the state. Sometimes we just have integrations built into those states. But it’s all public data in fact. And we also have where we do Freedom of Information Requests, where we’ll just ask the state, they provide that data. Legally, they have to provide it. It’s public data, all this business data. That’s the data we’re providing to our customers. We’re just automating it and maintaining a large software infrastructure that goes through automating that collection and that data.  

Rob Walling:
I want to talk about what I think you’ve told me has probably been the hardest part of the journey, and it’s about YouTube because you had traction. You were publishing videos. You still have traction, but that was a nice source of customers. And then someday, somebody comes a-knocking. Walk us through that story.  

Jordan Hansen:
Yeah, it’s a tough one. I showed you this graph early, before this conversation, and there’s a notable spike. Like I said, most of my videos before a certain time, they were not very big. Most of them were just I got a hundred views here and there. 

But at some point, I started gaining traction, and the video… It was earlier last year, in 2023, in the spring, it just started. I don’t know what it was. It was a video had already been out for probably a year plus. But YouTube picked it up in the algorithm, and we went from 800 subscribers to 2000 subscribers to 3000 to 8,000 subscribers within two months. 

Usage went up like crazy. But some of the problem that happened was the data, the stuff we were talking about, did not overlap very well with our target customers. We had to make the business decision.”Okay, this is more distracting than it is helpful.” It was so hard because you build up some ego and pride and the fact that people are reaching out to you. We were getting a lot more comments, and they were saying… 

It was just at the beginning of this rise where we started to take… We took all the videos down. We had 350 videos published. We took probably 300 of them and put them down. They’re private now, and I feel bad. People still comment, and they say, “Hey, can we get access to these videos?” And I say, “I had to make the business decision to take them down.” 

It was a source of leads too, because while most of it wasn’t overlapping, most of it was distracting. The overlap existed. We probably lost a little bit of source of leads as well. It felt good to be the man that knew stuff, that could talk about things, and just that little bit of credibility. It disappeared for a second. 

I remember discussing it with my wife, and I think with you too. Yeah, we did. You and I met and talked about it, to say, “Okay, I think I need to make this decision.” But I was really proud of myself that… It was a hundred percent the right decision for the business, and I’m proud of myself that I made it, even though it really ended up in being… 

Since then, we were 8,200 subscribers, I think, and we’ve lost subscribers. Now, we’re still making YouTube content, but it’s a little bit shifted and focused more on our customers. Now those people that subscribed originally for a different type of content, they’re churning out, which is fine. I understand. Not offended at all, but my pride takes a little hit.  

Rob Walling:
Sure. Because these numbers, this is the thing with vanity metrics, and I’m going to say YouTube subscribers are vanity metrics more so-  

Jordan Hansen:
A hundred percent.  

Rob Walling:
Email subscribers are not vanity metrics, unless if your open rate’s really low, whatever. Certain people beat their lists up. But email subscribers are the highest form of audience in my opinion. And podcast subscribers are actually very, very high because it’s usually, it’s podcast listens, it’s downloads. If you have 30,000, then you get 30,000 downloads, and we approximate those as listens. 

YouTube subscribers are like Twitter followers, where you can have 30,000 YouTube subscribers, and you publish a video, and you get what? A thousand views on it or something. That’s pretty common. Unless it catches the algorithm, it doesn’t even get shown to all your people. 

That’s the problem with Vanity metrics is you have these 8,000 subscribers, and that’s a number. And you’re like, “I want that to go up into the right, because we want all numbers to go up to the right.” 

But you realize that there’s this focus problem, there’s a mismatch. That’s something that most, especially with content, I don’t think people think about that enough. “Oh, my content is getting eyeballs, but is it achieving? What’s the end goal?” The end goal is bringing more people into the business, assuming it’s a business channel. On YouTube, it’s Cobalt Intelligence. So it is truly your business channel. It’s not like you’re building a personal brand around Jordan. You’re building it around the business. The goal really is to promote the business. 

Now, some could argue, “Well, look at HubSpot”, or “Look at Salesforce.” Look at these other companies. They do just put out broad, broad, broad stuff. Well, that’s because they’re public companies with a deca-billion dollar valuations.  

Jordan Hansen:
And they sell to a huge horizontal audience.  

Rob Walling:
Huge swath.  

Jordan Hansen:
They catch one little person over here, over there, and it could be someone valuable.  

Rob Walling:
Thousands, if not tens of thousands, of customers versus Cobalt, which has a fraction of that number. You don’t need that many because you charge so much more. So you know that lack of focus can actually be, it can be detrimental to the marketing, just because you have people seeing it.  

Jordan Hansen:
I had to make the decision because I love those subscribers. It felt good, and it was nice, the ego, the pride. Like you said, it’s a metric, it’s a vanity metric. While I did like that, I decided I liked money more. Really, that’s what it came down to. It’s like, “Hey, do I want the subscribers? Or do I want more dollars?” I like dollars more today at least. Maybe one day that changes.  

Rob Walling:
Jordan, as we wrap up, if you can describe your journey, because your journey feels, I guess, I say it’s unusual. But it’s probably not. It’s actually not that uncommon for folks to… It’s like accidental entrepreneurship almost. You knew you wanted to be an entrepreneur. Maybe accidental SaaS founder. Reflect on the last several years and how things have panned out for you.  

Jordan Hansen:
Yeah. That’s what I would hope the most. Whenever I talk to people, I just don’t think it’s as hard as people think it is. More importantly is that they take action and actually do something. So often, at least that I’ve visited in that trap, where I didn’t do anything. 

I just feel lucky, even meeting with other TinySeed companies. I didn’t choose this industry really. I stumbled upon it, and I’m just feel grateful that I have people that are willing pay. But not only that, the biggest way that we are increasing our revenue so quickly is the fact that we can charge a lot of money. Honestly, people are willing to pay for it. If we had a product where we could only charge $15 a month or $20 a month, revenue growth, it would just be insanely difficult. Now I can land one customer, and we add 20% to our revenue. 

I just feel really lucky that I happened to be in this, not only with TinySeed that’s been helpful to focus, but also just happen to have a product that’s good. And I don’t take that for granted at all. I recognize that I’m lucky to be where I am.  

Rob Walling:
Jordan, thanks so much for joining me on the show. If folks want to keep up with you on Twitter, you are jordbhansen with E-N at the end. And of course CobaltIntelligence.com if they want to see what you’re working on. Thanks so much, man.  

Jordan Hansen:
Thank you.  

Rob Walling:
Thanks again to Jordan for coming on the show. If you’ve bought my book, the SaaS Playbook, and haven’t yet left a five-star rating on Amazon or Audible or wherever you get your books, it would mean a lot to me. If you log into the site, and click that five star, I don’t even think you have to write a review. I think you can just rate it, and it goes a long way towards helping more people discover the book. The book has crossed 20,000 copies sold, which feels amazing. As you know, my mission is to multiply the world’s population of independent, self-sustaining startups. The more folks I can get this book into the hands of, the more I can continue leaning into that mission. 

I hope you enjoyed this week’s show. This is Rob Walling signing off from Episode 703.