In episode 704, join Rob Walling for another solo adventure where he answers listener questions. He weighs in on buying a SaaS, how to validate ideas using landing pages, and what tech stack to choose. Rob also provides guidance for those considering leaving their comfortable day jobs in favor of being a founder.
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Topics we cover:
- 4:00 – Comparing your business to successful outliers
- 9:50 – Exploring business outside of a comfortable day job
- 15:45 – Early access landing pages prior to development
- 20:00 – How do you vet SaaS businesses that you are trying to acquire?
- 27:16 – Evaluating a seller’s intentions
- 29:50 – Choosing a tech stack for your SaaS
Links from the Show:
- MicroConf Remote – Early Stage Saas Strategies
- Register for MicroConf US in Atlanta, April 2024
- Apply for Director of Marketing and Operations for MicroConf
- MicroConf Connect
- Startups For The Rest of Us – Ask a question
- 37signals
- 7 Proven Ways to Create Profitable SaaS Ideas EVERY Time
- The SaaS Playbook
- Quiet Light
- Acquire.com
- The Stair Step Method of Bootstrapping
If you have questions about starting or scaling a software business that you’d like for us to cover, please submit your question for an upcoming episode. We’d love to hear from you!
Subscribe & Review: iTunes | Spotify | Google
Is your outsource development team dropping the ball? Maybe you’ve worked with a team that just couldn’t grasp your vision and needed constant oversight because they weren’t thinking strategically. Or maybe you ended up wasting hours micromanaging, often needing to jump on late night calls across massive time zone differences to get alignment. And in the end, they delivered a sluggish app with a frustrating UI that didn’t come close to the solution you had envisioned.
If any of that sounds familiar, you need to reach out to our sponsor, DevSquad. DevSquad provides an entire development team packed with top talent from Latin America. Your elite squad will include between two to six full stack developers, a technical product manager, plus specialists in product strategy, UI/UX design, DevOps, and QA, all working together to make your SaaS product a success. You can ramp up an entire product team fast in your time zone and it rates 75% cheaper than a comparable US-based team. And with DevSquad, you pay month to month with no long-term contracts. Get the committed responsive development team that your business deserves. Visit DevSquad.com/startups and get 10% off for the first three months of your engagement. That’s DevSquad.com/startups.
When you choose to listen to podcasts, I know you have many options, so I appreciate you listening with Startups For The Rest Of Us. I’m Rob Walling, and in this week’s episode, I’m going to answer some listener questions. I’m going to mix it up this week. I’m going to break all the rules, going crazy, running with scissors up in here, and I am going to answer only text questions.
I have text questions dating back to May of last year, so that is eight or nine months, if I’m doing math correctly on the fly. So, I’m going to dig in to a few of those just to get into the backlog. But I’d imagine that in the next listener question episode, I’ll get back to the old way of doing audio and video questions first. As always, head to startupsfortherestofus.com, click ask a question in the top nav if you want to send a question into the show.
But before we get into the episode, I want to invite you to MicroConf Early Stage SaaS Sales Strategies. It’s an online event we’re hosting March 12th and 13th of 2024. It runs from 11:00 AM to 1:00 PM Eastern Time on those two days. And there will be sessions all focused on early stage SaaS sales led by Rachel Leow, Craig Hewitt, Daniel Ebert, Sam Howard. I’ll be MCing, and we’re going to cover strategies to boost your close rate, build a sustainable sales process, and figure out how to overcome the challenges of selling as a technical founder. We’ll also have daily Founder mixer sessions where you’ll get to meet other attendees to network and chat about what you’re working on. Tickets are inexpensive and they are available at microconfremote.com. And with that, let’s dive into the episode.
Let’s dive into my first listener question. This one’s from just a few weeks ago from Lee. Lee says, “Hey, Rob, on a recent episode of Startups For The Rest Of Us, you mentioned that you don’t like when people use Apple or Basecamp as examples for comparing to their startup. Comparison to Apple seems obvious to me. But why Basecamp/37signals? They seem way more of a model for bootstrappers to emulate. Thanks for that question, Lee. So, the reason I don’t like when people use any type of outlier company is usually you are not in their position. The issue with Basecamp is not that they’re not a solid, mostly bootstrap company, they took a small bit of funding in the early days from Jeff Bezos. I’m not sure if you heard that whole story.
But the problem is that Basecamp or the founders can come out and say anything. And they can say things like, “We don’t market,” or, “We don’t have any type of marketing analytics,” or, “We don’t check opens on our emails.” They could say, I don’t know that they’ve ever said this, “But we don’t do cold outreach. We don’t focus on SEO. We don’t care about marketing. We just built a great product.” And some of those things they’ve said, and some haven’t. I’m not trying to put words in their mouth, but they can say whatever.
They have built one of the most successful bootstrapped businesses of all time. People estimate it’s doing what? A 100, 200, 300 some hundreds of millions a year in ARR is estimated. Jason Fried on the MicroConf stage said it throws off tens of millions a year in net profit and that was six, seven, eight years ago. And you know it’s probably grown since then. But the problem is they, as Jason Fried said, I said, “What were the keys to success?” He says, “We did some things right, but timing and we got a little lucky. Luck and timing were one and two.” And I think that’s a great and honest assessment of why Basecamp succeeded.
If you started your SaaS in what ’04, ’05 and you get a little lucky, then you too cannot market and not check email, open and click rates, and not check analytics numbers. I don’t remember all. But it was things like this that I’ve heard them say. And so, then developers who don’t want to market, or who don’t want to focus on email opens and click rates, who don’t want to do blocking and tackling that 95% of the successful businesses I see doing, they use these quotes or that sentiment to justify it because they say, “Well, look, Basecamp’s successful and they didn’t do it.” The problem is you’re not Basecamp.
It’s the same thing with Apple. Hey, Steve Jobs said X, Y, Z. And it’s like, but you’re not Steve Jobs. Keep in mind when he said that he was worth a $100 million. And he already had a massive company and he was co-founder with the guy who invented certainly the invention of that decade. But you could argue that the invention of one of the top few inventions of the past 50 years, the personal computer. So, that’s why I have an issue with it. But keep in mind I like and respect Jason Fried. And DHH sometimes says things that are pretty inflammatory that I don’t agree with, but they’ve built a hell of a business and I have respect for what they’ve built.
The issue is they have really strong opinions about things. And I sometimes think that they would’ve been successful either way, whether they had or had not done those things, but most people are not. Most founders, especially those that “just want to build a great product,” need to get out of their own head, they need to get out of their basement, and they need to start talking to customers, asking them what they need, trying to solve a problem, building shipping iteratively. There’s all different ways you can do it. Basecamp never did that. And that’s cool. They truly scratched their own itch. And that was a thing early on where they were saying, “We scratched their own itch so everyone should.” And it’s like that is one good approach. But there are seven different approaches for finding ideas and problems to solve.
I actually outlined all of these in a recent YouTube video. They’re doing really well on the MicroConf YouTube channel, Microconf.com/youtube if you want to check it out. And I think it’s something like seven ways to find SaaS ideas or proven ways or something. I have written that up as well. It’s going to be a chapter of my book that is the precursor of The SaaS Playbook. So, it’s the earlier stage stuff of finding ideas and validating. But anyways, that’s why I don’t like it when people use Basecamp as an example because usually it’s to justify an opinion or justify an approach to business that I just don’t see working for anyone else. And I want to state like DHH, Jason Fried, they are TinySeed mentors. They invested in one of the TinySeed funds. So, there’s nothing against them or the way they handle things. It’s just I think as someone just getting started, imagining that since they did it worked and it will work for you, I think is a mistake.
I got a really nice note from a reader of The SaaS Playbook. He says, “Hi, Rob. This is not a question, but I wanted to send you a big thank you for The SaaS Playbook. I just read it in one go and I’m sure I’ll come back to many of the topics when relevant. I absolutely loved the book and how succinctly and to the point it’s written. I’m a B2C founder myself. Most of the insights are still very relevant. Although you’ve convinced me that my next company should probably be B2B. I’m trying to do that one founder at a time.” One B2C founder at a time trying to convert you. So, thank you for that note.
If you haven’t read The SaaS Playbook, it’s available at Saasplaybook.com. It has actually just crossed 20,000 copies sold, which just feels incredible. And it’s picking up momentum. And probably every day, every other day I’m seeing folks talk about it on Twitter or Reddit and recommending it. And it’s that word of mouth that really drives book sales at this point. So, I appreciate it if you check it out. And if you have already purchased the book, would love it if you’d head to Audible or Amazon, and just give it a five star review or five star rating. You don’t have to type in a review because that also helps people find it.
My next question is from Anonymous and he says, “Hello, Rob. I admire your work in the small SaaS space. I find myself stuck in a comfortable and happy job and I’m wondering how best to join the scene. I’m living my childhood dream at my day job. It’s a stable job, lucrative and enjoyable. It’s in a hobby I really enjoy. It’s basically the perfect fit. Between ambition, a desire for more money, and an earlier retirement, and seeing the success of some friends and family who were entrepreneurs, I would still love to own something. I could buy something and focus on automating the activities away, but MicroAcquire looks to have turned into a bit of a wasteland of cheap AI flip jobs.”
Wow, I haven’t been on there in quite a while, so that’s interesting to hear that is as his sentiment. Back to the email, “I could be a consultant to bootstrap businesses, but my day job is more lucrative on an hourly basis and there are zero missed invoices. I have considered booking a ticket to MicroConf. I’m highly confident I can be of value to the community. I am sure I’m not the first person you’ve met who is interested but tempted by comfort aside from just take the leap of faith. Any thoughts from your experience?” A couple thoughts. I think you should come to MicroConf and you should be around founders.
One of the reasons MicroConf is so different is that the vast majority of people have a real business. It’s not a bunch of wannapreneurs like so many of the SaaS or startup conferences you go to where it’s people walking around looking for permission, asking for funding. MicroConf is real entrepreneurs building real products to sell to real customers for real money. It’s our people. It’s the folks who would listen to Startups For The Rest Of Us, and take that leap and buy a $1,000, $1,200 ticket, and fly somewhere and make a hotel reservation. These are people who are willing to take action and do it. And so, I think if you’re looking for some motivation, being around those types of people for two and a half days, hearing the talks, having the conversations, I think is highly motivating. If that doesn’t get you unstuck, I don’t know what will. I don’t know you and how you work mentally or how you process all this, but I think that would be a big win.
And there are still some tickets to Atlanta here, and it’s just about two months. That’s at MicroConf.com/us. That event will sell out. So, I wouldn’t wait if you’re going to do it. The other thing is something that I’ve said when I’ve had similar questions like this in the past. I guess from my perspective, it was a burning desire and need, and that got me through the hard times because it’s going to be a lot of work. And it’s going to be a lot of things you don’t want to do in order to get to the place that you want to be. And so, if you’re not highly motivated to do it, I just don’t know why you would stick with it through the ups and the downs, and whether it’s nights and weekends, or watching your savings drain if you quit without a product already in place.
I’m trying not to view it just through my lens of how I did it, but I’ve talked to maybe a handful of entrepreneurs, half a dozen, 10, 12 about this topic. Asked them, “Do you think you could have made it without a burning desire?” And everyone’s been like, “No, it was too hard. I wanted to give up, but X, Y, Z thing got me to the next stage or kept me pushing on this product, or pivoting, or whatever it is.” For me, it was a desire to quit my day job, to have equity, to see what it was like to be an entrepreneur, and I didn’t like working for other people. And that’s usually the story that I hear about folks who start as bootstrappers. And then at a certain point, the dopamine comes from doing interesting things, creating, shipping things into the world and having an impact.
And you start to be like, “Oh, well a couple hundred grand a year isn’t as interesting as a million a year. Oh, @2 million a year, $3 million a year.” And you start to get good at it, and then you start to love it and need it. And if you went back to work for someone as just a director of something or other, a manager of something or other where you’re, I’ll just say more of a cog in a wheel. I’m not saying you are now, but if you went back to a job, it would be tremendously unfulfilling like the volume was turned down to two after volume being turned up to eight, nine or 10 for so many years. But I don’t know, there may be entrepreneurs out there who didn’t have that burning desire and just kept going because they just did. I just have a hard time myself with that paradigm.
So, if you’re listening to this and you’re a successful entrepreneur, and you have bootstrapped a startup or done something super interesting, and you’re in a similar situation where you weren’t super motivated to do it, but you did it because you wanted to and then it worked out, please write in questions at Startupsfortherestofus.com. I’d love to hear about your experience and how you made it through. I would almost think that if there are folks out there, and there probably are that are out there that have this experience, they almost launched a side project that maybe took off and they got a little lucky. And it’s okay to get lucky. I’m not taking anything away from that. I wish I got lucky with more things I did. But that’s okay. So, maybe that’s what you need original poster. I’m keeping this person anonymous.
But maybe that is what you need, is to launch some things that are fun that if they work out, hey, great. And if they don’t, then you just let them go. Kind of the typical indie hacker project where someone launches it, puts it on product hunt, Hacker News, Reddit. And then if it doesn’t catch, which most don’t, they just abandon it or they autopilot it and add their new things such that they have this portfolio of products each doing $300 a month. So, yeah, I think that’s how I would think about it. And I definitely, if you love your job, I wouldn’t go and try to freelance, or be a consultant, or whatever. I don’t think that’s going to make any happier. I think it’s going to be product income or starting an actual, a startup where you’re selling a product, not just dollar for hours, that would make any kind of difference in your life.
So, thanks for writing that email. I think it’s an interesting question and one that hopefully I’ve learned some insight onto. But obviously there are folks out there, if you’re out there and you have had success when you were in his situation, I would love to hear from you. My next question is from Pedro about an early access landing page. “Hey, Rob, thanks for the great content. It’s been incredibly helpful for me right now. So, my question is related to early access landing pages and the development timeline. What are the pros and cons for using early access landing pages before any development? So, the page wouldn’t have a ton of content and it’d just have an email capture form. Versus a more dense landing page with screenshots, feature lists, and sometimes even pricing details. In both cases, the customer conversations would be done. There is a problem to be solved, the product is not done yet, and the goal is to get prospects beyond the ones we are talking to during validation. Thanks a lot.”
This is a good question and I’m not sure there’s a right or wrong way to do this. I’ll tell you the way I’ve always leaned, but it’s just because it’s been the easier way to do it. I have tended to attack something, a problem that is pretty well-defined and that I can just have a catchy headline that says, “I plan to fix this.” I believe the headline when we launched TinySeed, which was just a landing page and email capture was something like, “Startup funding is broken for bootstrappers,” or, “Startup funding is broken. Here’s how I intend to fix that.” And then it was pros, it was 800 words or a thousand words of talking through how venture capital doesn’t support bootstrappers, but some people want to raise a little bit of money, but they don’t want to go on the venture track. And here are thumbnails of Anner and I looking intensely at things. And I realized that’s a different example because it’s not an app, and so I wouldn’t have included screenshots or features, but I did the same thing certainly with my books.
My books were usually just… Well, my first book was a headline and two sentences, that was the whole thing. And then an email capture. And it was something like finally a book written for people where venture capitalists aren’t putting a bunch of money in your bank account. And I think it didn’t say people, it said startup founders or developer founders, or something like that. Books are also different. But truthfully, The SaaS Playbook, go to Saasplaybook.com right now and look at that. That is essentially what you’re talking about, which is it’s the cover, it’s pictures of me, it’s pictures of the interior, its features and benefits of the book. That is what we did this time. I had more money, I had more budget, and I knew what was going to be in the book. The book was done by then. And so, I did pay a design firm to design that whole website. And then I’ll go back to Drip. And Drip was just a headline, three or four sentences of copy and an email capture widget. And I think that’s what we launched with.
So, all I’m telling you is that’s what I’ve done and I don’t want to act like that’s right or wrong. I think it’s easier when you’re first getting started, if you are tackling a simple problem like all CRMs suck and here’s why, here’s how ours is different. Or some other simple obvious pain point that’s pretty easy to communicate in a handful of sentences. I don’t know. I like to keep it simple. I like to keep it simple as well because then people might be intrigued by it and then I can talk to them and say, “How do you think I’m going to fix CRMs? What’s broken about your CRM?” If you give them screenshots and show them how you’re doing it, you are putting your opinion on that. At this point, it’s not customer development. So, I think that’s part of the question, it’s like the more vague you are, the more customer development you can do. If you are actually trying to pre-sell a bit more information is probably warranted.
So, in all honesty, I could go either way. I think the danger of having screenshots and a lot of info is that means you are taking an opinion and is it a hypothesis that you are certain of? Because if you’re not, then I would tend to hold that information back and let people confirm or deny my hypothesis, confirm or deny my opinions before I become that opinionated about them. You don’t want to be certain of stuff that customers aren’t telling you that you’re just making up in your own head. But the more certain I am of it, I probably would start building out a landing page. You’re going to eventually need that full featured SaaS website. I say need. A 100% need it, but it’s a good thing to have. And I think as you’re developing the product and you become more confident in it, fleshing out that landing page to see if it’s resonating with people and to see if you’re marketing it well, I don’t think that’s a bad idea. So, thanks for your question, Pedro. Hope that was helpful.
My next question is from EJ. EJ writes, “Dear, Rob. Hope this message finds you well. I’ve been following your entrepreneurial journey with great interest and your story about purchasing a Microsoft business has particularly piqued my curiosity.” I think he’s referring to HitTail, although I purchased several small products, but HitTail is the one I tend to talk about the most. And when I acquired it, I believe it was doing about 1,500 MRR and it was completely flat and had been for a long time. And I eventually grew it up to about 30K MRR At its peak. It was a high churn business, so it was in the 25 to 30K for, I don’t know, quite a long time until I wound up selling it.
Back to his email. “I understand that platforms like MicroAcquire exist to facilitate these acquisitions, yet I find myself grappling with several questions about the entire process. My primary concern lies in assessing the value and potential of a Microsoft business accurately. In a marketplace where information asymmetry is prevalent, how does one ensure that they’re making an informed and fair purchase rather than falling prey to an overpriced or underperforming business? In your experience, what are the key indicators to look out for or the red flags to avoid during the evaluation process?” So, there’s more questions, but I’ll answer that. The answer is you don’t and you just have to get good at trying to identify red flags. In addition, these days, personally, I would buy through a broker, Quiet Light, Effy International, Empire Flippers. They tend to do, I think, a bit more vetting than MicroAcquire. I’m not saying you shouldn’t buy on MicroAcquire, which is now called Acquire.com by the way. This email is that old. It was before the rebrand. But yeah, there’s definitely going to be some risk.
If there wasn’t risk, then it would be priced accordingly. I was buying stuff and getting a little bit scammed or lied to back in the 2005 to 2012, 2011 maybe. Was that when I made my last acquisition? Something like that. And sometimes I got lied to and sometimes I didn’t, and I just made sure that I paid a low enough purchase price that it really didn’t come back to bite me. And I also did a ton of due diligence and as much investigation of it as possible. Of course, it’s asymmetric information and I think it’s trying to learn the ropes of what do I really need to look for?
The key indicators to look out for are red flags to avoid, there’s almost too many to list. I mean, I would look for a book, or an ebook, or an entire YouTube channel, or someone who is the Rob Walling of acquiring businesses. Is there a podcast or some resource? Because I could imagine writing an entire book on this process of buying micro businesses through either the brokers I’ve named or Acquire.com, or I used to… What was the other one? Flippa, Flippa.com. I don’t hear about them as much anymore, but that’s the thing. It is getting more experienced at it so you can gut feel. You start to read a business and you do see that, oh, this is why that one’s a piece of crap and hasn’t sold.
The other thing is you’re talking about assessing the value and the potential of a SaaS business. Usually for me, the potential was how am I going to market this? The potential is that there’s a marketing channel that I see or an avenue I see that the current person is not exploring that I think will work, and that I have some confidence that I can learn, or that I know how to do right. And without the ability to grow it, I never bought a business. I always bought ones that I wanted to either take from flat line to going up or I wanted to accelerate their growth. The next part of his email says, “Furthermore, once the business has been acquired, the transition phase presents a new set of challenges. How does it want to effectively manage and grow a live product, especially when they’re still in the learning curve phase? Are there specific strategies or resources you found particularly helpful? During this stage?”
No resources, but the strategies are you get in and you spend a ton of time learning the code base, learning what the existing marketing is, learning where the traffic is coming from, who’s converting and why, looking at the funnels, looking at the bottlenecks. I remember having the instrument several products because there was no… There may be was Google Analytics, but nothing else. So, you just had no funnel measurement. And so, I would see people drop off at this one signup forum that was 10 questions long instead of just asking for a username and a password. And I would see that the pricing was way off.
So, no resources. I don’t know anybody who talks about this. Maybe someone can write in with suggestions. But the strategies are I would get in and learn the business and literally take ownership of it. Imagine coming into a new company and there is either a product or something else that you have to get in and start driving. And you don’t own it. Let’s say you’re the software development manager and you have to learn the code base. How do you dig into that? You start by one bite at a time, eating that elephant. And so, for me, I would tend to identify what are the things that need to be fixed first and then move through that list. And so, with HitTail specifically, it was unstable. It was buggy and the server was crashing. So, I was like A, I need to learn the code base enough to fix the bugs. And that took a lot of time. It did. It took dozens and dozens of hours digging in just to figure out how this thing worked.
I actually did the same thing in DotNetInvoice. There were math errors in this invoicing software. And it’s kind of like you have one job and you can’t have math errors in your invoices, and yet there were. And so, it was going page by page through it and being able to figure out, fix the bug, ship new versions. And then, let’s see, with HitTail it was getting it on stable servers, so we did a migration. And then I wanted a redesign of the marketing website and of the app, and that took a couple months with a designer, and then I had to retrofit it onto this old code base, and then it was marketing. And that’s when I said, okay, now I’m going to juice up. I didn’t want to juice up SEO and ads, and whatever, content marketing, and integration marketing, and anything else until I felt like the product was stable and the design was amazing. And that one worked out. It’s not to say that that’s the plan for everything.
DotNetInvoice had some bugs that I had to fix. That was different. That wasn’t SaaS. It was downloadable software that you ran on a web server. The product looked good for the time and it needed some bug fixes and better support, and then it was just marketing. And I was looking at all the avenues that I could to lmarket.net invoice and grew that from, it was doing a few hundred dollars a month, like three, probably two to $400 a month when I acquired it. And it was usually between about three and $5,000 a month by the time I was able to plateau it. I never got a pass there. But that was a great little side income while I was doing consulting and sometimes had a full-time job as well.
So, yeah, you just have to dig in and do the work, honestly. I don’t know any other way. Maybe someone out there is smarter than I’m, and they can do it without digging in and doing the work, but that’s just what I did every time. But one thing I did like about it is once I spent money on it, my back was to the wall and that was a helpful motivator to me of like, well, I spent the money. Now I need to figure out how to make this work. And that is also why I bought in spaces that I had a little bit of familiarity with. Like HitTail was an SEO keyword tool. I knew SEO. And DotNetInvoice was invoicing software for .net developers.
You got the source code. And so, if you didn’t, you either cared about privacy or you cared about having the source code. And so, I was able to talk with the developers and people who were buying it. And learn from them, and converse with them, and figure out how to grow the marketing funnel. And then the last question in the email says, “Lastly, I can’t help but consider the intentions of the current business owners. While I understand that there could be numerous legitimate reasons for selling, I also wonder if there might be instances where the business might have undisclosed issues or skeletons in the closet that the seller is keen to avoid. In your experience, how prevalent is a scenario? And what precautions can one take to safeguard against situations? I understand these are complex questions. Any insights you can provide would be immensely valuable.”
Yeah, I’m sure there are undisclosed issues or skeletons in the closet, especially if you buy on a marketplace. I’m not saying marketplace buying is bad, but it is, I think, more risky than going through a broker. I’m not saying that brokers validate and verify everything, but there is at least some recourse with a third party involved. So, if something was undisclosed, I would at least know that I could go back to someone and this brokerage has a reputation to uphold. And so, even if the seller disappears, I have some recourse. Yeah, the idea here is probably the same answer that I said to the first question, which is you have to know what you’re doing. You have to know what you’re looking for. And that takes time and experience, which is tough because how do you get that time and experience? The time is looking through a lot of deals and learning what makes them good and bad deals. And the experience for me came from buying smaller.
Well, my advice would be to buy smaller ones today and then you’ll learn what didn’t work and apply that to the next one. I actually started with an $11,000 acquisition, and that was in, I think it was ’06, 05, or ’06 when I made that. That was a lot of money. That was all the money I had in the business bank account. So, I should have done something smaller. I was building things on the side, so I did have some experience. But that’s how you want to do it. You want to take these small steps and really learn from others. And that’s where I think the information put out by these brokers by Empire Flippers, maybe Acquire.com puts out info. I don’t read their stuff. I imagine they have eBooks on the topics. And Quiet Light, and FE International, and anybody else you can get your hands on, information in that space that’s going to help you learn, is something that I would be consuming if I was actively thinking about this.
But yeah, it’s risky. There’s always a chance someone’s not going to disclose things and they’re going to screw you. You’ll never get to a 100%. It’s always scary. What I don’t know is do you get to 80% where you’re 80% certain you’ll be fine? 85%? I don’t know what that number is. But the only way that I know to get better at any of these things you’ve asked about is to put in the time and gain some experience. And without that, I think you’ll just be sitting on the sidelines. So, thanks for that question, EJ. I hope it was helpful.
My last question for today is from Misha and they ask, “What are your thoughts on choosing tech to build a startup in the MicroConf Slack community, which is Microconfconnect.com? I keep seeing the same two to three questions asked in various channels. For example, my database is slow. The usual, very specific responses pile up, but the core of the question ends up being someone who is new to software development and is seeing a symptom. Often the tech stack is Node.js or some Python weirdness, not Django or some .net thing, et cetera. At this point, why are people not just using Rails or Django? Tons of educational material, plethora of people to hire and more being trained in bootcamps. A library for 99.99% of problems, one would face easiest way to deploy and scale, and most importantly, super stable frameworks. Is this just a matter of helping folks understand the technical and business challenges with making the right choice for what they are building?”
This is a interesting question. I guess it’s like A, you can have database slowdowns with any tech that you use. If you’re scaling, if you have bad code, I wouldn’t always blame that on the technology. I will agree with you though that if I were to build a SaaS app, which I’m never going to do again, very likely be something like Rails or Django, maybe Laravel. These are probably the top three that I see. Node.js is fine, and I know there’s developers out there screaming at the speaker right now. But I really like these super stable server side frameworks. I don’t like JavaScript, NBC frameworks that… Like React and such that have a bunch of spinners.
I know there’s unit tests and all this, but it seems like a lot of the problems that I hear about with bootstrap founders who hire developers to build things wind up in this front end. Maybe that’s what Misha is saying is, it’s not the technology necessarily, but there are certain technologies that maybe lend themselves to, well, just different types of issues. Whether it’s performance issues, or whether it’s writing spaghetti code, or whether it’s… Since there’s so many bootcamps putting out people who are less experienced, then that means maybe the code quality overall is lower.
I don’t know what it is, honestly. But I really like HTML rendered to a browser and then some JavaScript sprinkled in. And I know it to say, “Hey, here’s a old man doing the old man thing.” But it’s like, no, there’s just some stability. That’s a personal preference. I think, Misha, your question of why wouldn’t everyone just use one of these two frameworks? It’s like, well, all the frameworks… These two frameworks don’t cover everything. I know they’re stable, but what if I know PHP? What if I’m a .net developer and I want to build something nights and weekends? That’s all I know. I can spend the time to try to learn a new language. I’m not going to be that great at it. Or I can use what I know and I can build quickly. That’s usually I think what’s happening. But that’s also another thing, and it’s non-technical founders starting a SaaS.
It’s just hard. I’ve talked about this on this show many times where if I was a non-technical founder trying to start a SaaS, I either wouldn’t or I would try to find a co-founder. A technical co-founder who can head up and own the code. When I say wouldn’t, I mean I would go back and try to stair step my way up, certainly not by building SaaS, probably not by building software. Because thinking that you can just hire a developer to write code and build a product, is like thinking, I can hire a carpenter to come build a house. You can, but you also need an architect, and you need a designer, and you need other skill sets. And how do you know the architect is any good? And once the foundation is poured, it gets really hard to come back and undo that work.
And the analogy is not perfect. I get it. But thinking that any developer can build a SaaS app is incorrect. In fact, the vast majority cannot. And yet, people hire dev shops that just don’t… They don’t build quality code. They cut corners because you are not going to know any different. That’s the problem, is you can’t evaluate whether the developer is good or not, and you can’t evaluate if they’re rushing. Because even good developers can ship crappy code, low quality code if they’re in a big hurry and they’re being pushed to hit deadlines. There’s a reason that the majority of the MicroConf community are technical. It’s not that we don’t want technical people. In fact, we want more non-technical people because, hey, we need more marketers here. How often have I heard of a developer founder who needs more marketers? So, I’d love to have more marketers in the MicroConf community.
Same thing with TinySeed though. Last time I looked, I think it’s like 10 or maybe 15% of companies we funded with TinySeed don’t have at least one technical co-founder. It’s a super minority. And there’s a reason for that because getting to the point to where a TinySeed would fund you, it’s obviously not easy. And doing that without a developer who is heading up that side of the business makes it even harder. And in fact, probably the number one issue that tends to face companies that we funded who don’t have a developer co-founder, is they are perpetually dealing on and off, but perpetually dealing with the headaches of that with, “I had a lead dev and then they left, and now I have to replace them.” And it’s like, that’s not the best. It’s a tough situation to be in. And those folks are bearing the burden of having to be the ultimate where the buck stops for a code base, but they’re not a developer.
Your tech lead leaves and now you have two juniors in a mid-level. And you now have to go find that next tech lead, but you don’t know if they’re any good. It’s an uphill battle. And as appealing as SaaS is, and the fact that it is the best business model on the planet, I believe it is just really difficult. And this is why I talk about doing the stair step method of entrepreneurship, not to go straight to SaaS. And this is why if I was a non-technical founder… I mean these days, I wouldn’t be writing the code. If I were to start a SaaS app, I would try to find the best SaaS developer I knew, whether they lived in my town or not, or I just knew them through MicroConf. And I would work my network. And maybe I would hire them, maybe they’d be a, they wouldn’t. That’s irrelevant.
Probably if I wanted to keep them around for a long time, then they would get equity, because I would want us to have that shared motivation, because it’s hard in the early days. But I wouldn’t go hire a freelancer, or a contractor, or an agency, or I’ll say just a… Random is not the right word, but you get the picture of AW2 employee who can leave any time and leave this code base. It’s like leaving an open heart surgery patient in the middle of surgery. And SaaS apps unfortunately, you’re always performing open heart surgery on a living patient. And that’s one of the reasons why this is so challenging. So, Misha, I’m not sure I have the best answer of why everyone doesn’t just use Rails or Django, but I sure appreciate your question. And I do agree with you that I think there are some tech stacks that are better designed or better suited for building SaaS applications. So, thanks for writing in. And that wraps another episode of Startups For The Rest Of Us. Thanks for joining me today and every week. This is Rob Walling signing off from episode 704.