Startups For the Rest of Us

Rob Walling:
Welcome back to Startups. For the Rest Of Us, I’m Rob Walling. This is Hot Take Tuesday. In this episode, we talk about the rise of Blue Sky and a r and Tracy wind up making a four figure cash bet about where they think Blue Sky’s going to be three years from now. Talk a little bit about TinySeed and how we are raising our next fund, how Y Combinator backs competitors and more hot take Tuesday topics. Before we dive into that, the SaaS Launchpad course, this is the most comprehensive and best course I’ve ever released on early stages, the very early stages of just getting started. Idea validation, launching, building a launch list, getting to your first revenue. The course is live and we now have a free sample module called the DNA of a great SaaS idea. It’s a 28 minute video. This is 28 minutes of about, I think we have nine and a half, maybe 10 hours total of instructional material as well as dozens of worksheets, checklists, forum where people are discussing the ideas and throwing ’em back and forth. 

It’s at SaaS launchpad.co if you want to check it out. This is the first and only trial that we’ve offered for this course to give you an idea of the level and the quality of the content because the quality of the content is far, far superior than stuff I’m putting out on YouTube. It is far more in depth and it is a book level depth in a video course with full transcript summaries and all that. So SaaS launchpad.co, click the start free button to download the free sample, the DNA of a great SaaS idea. And with that, let’s dive into Hot Take Tuesday. This week I’m joined once again by Tracy makes on Twitter,  

Tracy Osborn:
Well, I’m there, but or tracy osborne.com on Blue Sky.  

Rob Walling:
Ooh, blue Sky. We’re going to get into that in just a moment. And Mr. And our set on Twitter.  

Einar Vollset:
Absolutely. How you doing  

Rob Walling:
As well as your real name? Are you on Blue Sky?  

Einar Vollset:
No.  

Rob Walling:
All right. Are you going to get on Blue Sky?  

Einar Vollset:
No.  

Rob Walling:
All right, so let’s talk about  

Tracy Osborn:
This. I would bet money you are.  

Rob Walling:
First topic of the day, is Blue Sky going to do it? Meaning do we think Blue Sky is going to survive and thrive? Tracy, I’d like you do. I need you to steal, man, this argument of Blue Sky because it sounds like you are leaving Twitter in favor of Blue Sky. Talk us through what’s going on.  

Tracy Osborn:
I am a Twitter OG whenever that year. That was way back in the day and I freaking loved Twitter seven, and it was one of the things that really catapulted my career in tech and I thought I was all in. But I got to say the vibe has changed and the vibe has changed pretty significantly in, it’s been changing for a little bit of time due to certain events with the selling of Twitter and whatnot. But I feel like it’s very different in the last few months. And for me personally, it doesn’t suit my purpose anymore and it’s not a place that I find very fun. It’s not useful for me for my career stuff, and Blue Sky seems to be taking hold. It’s like Twitter in 2007, 2008, and that’s really fun. So I am over on Blue Sky enjoying those early days where people are doing a bunch of little apps and creating analytics and doing little silly things. All the things that you go to be able to do on Twitter with the API stuff, I’m sure it’s going to change and evolve over time, but it just, it’s the kind of thing that I want to be a part of rather than what Twitter has turned into now.  

Rob Walling:
Got it. So for you it’s a personal preference of the type of social media that you’d like to be part of  

Tracy Osborn:
And I also feel like there’s an opportunity, might as well make an account. I did one for TinySeed, just I’m going to cross post between TinySeed and Twitter and Blue Sky for the time being because I feel like might as well. And if it does take off then it’s already there and it’s pretty nice to have that in there because Blue Sky, you can verify using your domains, so it’s really easy for people to find TinySeed. It’s just TinySeed dot com. So I feel like there’s some business reasons to do it, jumping on a network when it’s early, but largely for me it is personal preference in terms of the way I want to experience a social media network  

Rob Walling:
And our V set, what’s the counterpoint?  

Einar Vollset:
These are all good points. I think I just can’t be bothered to join another thing. I’m like, why do I care? I mean honestly, I’ve been on Twitter since 2007. I think I am on there all the time. You see, it’s changed radically. It hasn’t changed all that much for me. It’s always kind of been a show for years now. That’s what I’m used to. It is what it is.  

Tracy Osborn:
I mean, you’re in good hands with your posting, so it is. That’s true.  

Einar Vollset:
And 

I think certainly it used to be a certain kind of place I think before and it was pretty left wing, it was pretty progressive, it was pretty of a type and I think it’s become more balanced let’s say now than before. And so I think you’re more likely to see things that maybe you don’t agree with than you used to. I feel like it used to be very, if you were a San Francisco type liberal, you get a lot of reinforcement of the things that you believe on the old Twitter versus now you definitely get some of the other stuff. And I don’t know some of the stuff, there’s no doubt that I see full on. I see both communists and Extreme right wing white nationalists on Twitter more than I used to, but I mean it’s always been for me, I just don’t think it’s changed all that much I think.  

Rob Walling:
And how about Blue Sky? Do you think Blue Sky will gain traction and be around in three years and be bigger than it is today?  

Einar Vollset:
No, I think it’s just a hissy fit to a degree. And I feel like it’s been that there’s been Threads was kind of the same. What was the other one before that? Wasn’t there another one? Not this Macon Bason. There you go. That was the new thing that was supposed to be a thing, and I’m like, yeah, okay, great. If it becomes a thing, then it’ll be a thing. And I am not saying I’m not going to wander over there, but right now I’m like, look, I only need so much screen addiction. Twitter gives me plenty of that.  

Rob Walling:
And for me, I think we’ve kind of heard two viewpoints here pro and con, and I’m genuinely the middle. I do have an account on Blue Sky, I’m Rob Walling dot com if folks want to hook up with me there, and I’m more doing it to keep an eye on what’s going on. I am posting some of my Twitter posts over on Blue Sky. I find that the community is much smaller. I know everyone that I’ve followed in essence, which is interesting for now, but the volume over there, it’s just very light. If I open Blue Sky a couple times a day tops, I’m like, oh, I’m all caught up because I’m just looking at the people you follow tab and I only follow hundreds of people. So it’s not just this constant free flowing flow of stuff that I don’t necessarily care about Twitter for me, I don’t care about the political stuff. 

It just doesn’t bother me either way, left or right. I’m just kind of like whatever. I mean, if something’s offensive, obviously it bothers me, but I’m not seeing an inordinate amount of left wing or right wing or whatever. I’m just seeing. I don’t care about, I’m seeing stuff from whether it’s Elon Musk or some celebrity who posts something or blah and it’s just like, I didn’t follow this person. I don’t give a fuck about this topic at all. So that’s the thing that I’m a little fed up with. So I’m going that there’s the what is there, the four U tab, and then there’s people you follow tab, but then I go to people you follow, there’s a reason. There’s an algorithm that is boring. There’s a lot of people I follow that’s like, man, I really don’t care about what’s going on with you.  

Einar Vollset:
I’ll say that one thing I have started doing with the following that I had to do when you guys sort of forced onto the four U tab is when you see things that you’re like, it’s stupid, tell it. It does work pretty well. I feel like if you’re just like, I don’t seeing what I see on Twitter, I’m like, whoa. Or X, sorry. Then I think like, well, you’re just not telling it what you don’t like, because it pretty quickly shapes into if you spend half a day looking through and being not interested, not interested, not interested, it does update pretty quickly I would think.  

Tracy Osborn:
So I have one more point before we kind of evolve the conversation, but I just wanted to bring it back for folks who might be thinking about should I move over and the vibes of blues for folks who are indie hackers, makers trying to share what you’re doing in public. So if that’s something that you look forward to being part of a community of folks, sharing what you’re working on, how you’re building your next indie project and whatnot, then I would say check out Blue Sky. I think that in particular, that area has been really taking off.  

Rob Walling:
And Tracy, your prediction, do you think Blue Sky will be around in three years and bigger and have more traction than it is today?  

Tracy Osborn:
I would bet so. I could be wrong, but it feels like it terms of the herd instinct of folks and the herd instinct of tech press and whatnot. There’s more now than there was when Macon and Threads and everything else launched a few years ago, including Blue Sky, which was the two years, I guess Blue Sky has been around for a few years and nothing was really happening. And then finally this magical moment happened where people all of a sudden moved over and they had that inflection point. I think that now makes the service more useful.  

Rob Walling:
And so just because we want to keep things interesting. Tracy Einar, what are you going to bet? What kind of cash are we going to put on this bet of It’s a three years out, so someone’s going to have to remind us. Reach out. Listen to this episode.  

Einar Vollset:
I think it should be a hundred bucks.  

Rob Walling:
Oh, I was going to say a  

Tracy Osborn:
Thousand.  

Rob Walling:
Wow. Whoa. Now we’re talking. Yeah. All right. You heard it here first. Tracy Osborn. Thanks. Three years. Wait, AER has to agree to  

Tracy Osborn:
1,002.  

Einar Vollset:
Whoa, whoa. What’s the definition of being around here? Because I can see Tracy buying bluesky.com and just spinning up her own little thing three years from now just to get a,  

Tracy Osborn:
Which bluesky.com is not the network,  

Einar Vollset:
Isn’t it?  

Tracy Osborn:
That’s someone else. So I’m sure they’re just  

Einar Vollset:
Wait minute, wait a minute. Why do they name it bluesky if they don’t own blues sky.com? What is the domain then?  

Tracy Osborn:
It’s like B sky.  

Einar Vollset:
What? Actually let’s make it $10,000. This isn’t going to last you into the fucking next year. Forget it.  

Tracy Osborn:
No, I’m capping out a thousand here.  

Rob Walling:
So a thousand dollars and yeah, not that it’s around in three years, but that it has significantly more traction. Do you know what’s the daily active users right now? Anyone?  

Einar Vollset:
I mean it’s Tracy and you guys. That’s two.  

Rob Walling:
So I just did a quick Google and it says that Blue Sky has 20 million users. That’s not daily active. That’s not monthly active. It says user. So I’m thinking that’s registered account. So what is the definition of in three years, this being around and having significantly more traction,  

Einar Vollset:
Significantly more, a hundred million.  

Rob Walling:
I was going to say 50 or a hundred. It’s got to be somewhere in there. If it’s 30 is not it. This is a dying social network. If it adds 10 million in three years, so let’s say a hundred, I like that.  

Tracy Osborn:
I would also say if Rob Walling posts more on Blue Sky than Twitter, at that point, I would consider it a live network at that point. Wow.  

Einar Vollset:
Okay. So all I have to do is convince Rob not to post more on there and make a thousand bucks. Hey  

Tracy Osborn:
Rob, you want to make 500 bucks? Sure deal. Do that to your detriment,  

Rob Walling:
Moving on. And where is Threads and all this threads? What are you doing, man?  

Tracy Osborn:
Threads just engage. Every time I open Instagram, it’s like, Hey, let’s look at the thing that make people pissed off so they’re all responding to this. So for me, it’s threat. I mean, I clicked on it a few times. It is interesting. People are like, oh, I was at the airport and Delta screwed me over and I talked to this person and I clicked on those a few times because like, Ooh, I want to know what happens next. And then I realized, wait, it’s just pulling me in by making me pissed  

Rob Walling:
Off. Exactly. It’s the worst of  

Tracy Osborn:
Social media. And so Zuckerberg, he just announced, he finally put in, because Blue Sky is taking off, they added an option. So you can just see the folks you’re following on threads. They’re feeling some pressure from Blue Sky and they’re changing threads in response. I think folks are so fed up with threads that I feel like they’ve kind of missed the boat, so to speak.  

Einar Vollset:
I don’t get it. So the reason I think I didn’t sign up for threads was I have a private Instagram, just family things and you have to use this account. And I’m like, no, I’m not doing that. This is a private, this is why I never signed up for Threads. I just didn’t want to open that Pandora’s box. So why aren’t people pissed off with threats?  

Rob Walling:
It’s just too algorithmically driven. Everything is engagement based. All the posts you see is people being angry or people doing When I post A, so what are the most underrated guitar solos of all bands from the seventies? And then you want to weigh in, right? You’re like, oh my gosh. Well, obviously Jimmy Page is solo on StarWay to Heaven is just underrated, dah dah, dah.  

Einar Vollset:
You’re so old. Dude,  

Rob Walling:
That’s seventies. Are you nearly 60? No, not even close. And so that feels just rude. I wonder.  

Einar Vollset:
Played rude. There we go. Perfect.  

Rob Walling:
For listeners who don’t know, I just held up my a RP card. Someone thought it was funny to sign me up for the American Association of Retired People here  

Einar Vollset:
In the United States. It wasn’t a problem.  

Rob Walling:
Anyways, it’s engagement bait. It’s just vapid content. It almost feels like just listical type stuff. So I go there, I don’t go there anymore. I’m just like, I don’t need this in my life. It’s not interesting. So let’s move on to our second topic. I hear rumor that TinySeed is raising their third fund, a r vol set TinySeed dot com slash invest. If you are an accredited investor and you want to invest in US companies or UK entities, you want to talk people through what’s going on. We’re just kicking this off.  

Einar Vollset:
I mean, I guess most people know TinySeed and what it is and why we’re doing it and all that stuff. We’ve been doing it now since 2019, so it’s been half a decade. Unbelievably  

Rob Walling:
First startup accelerator for SaaS.  

Einar Vollset:
Yeah, and it’s worth thinking about 2019, what was going on at the time. It was right around the time actually it was Sam Altman now of OpenAI who wrote an article, I think he was YC president at the time or maybe he just left or just starting. He wrote this article saying how to invest in startups. And his main point was don’t invest in anything unless it can be 20 billion. And really TinySeed was sort of a response to that. It was like, look, there’s got to be a different way to help founders who wear successes selling to private equity or strategic for 50 or a hundred or a couple million dollars. That sounds like success I think to most people. And so really that’s what we’ve been trying to do with TinySeed and we’ve been doing it, like I said, we did our first fund 2019 deployed. 

That was kind of at the time I actually got some advice saying, you should call this your fund zero prototype fund. And I kind of wish I had done, but I didn’t. So it is our fund one. We raised about $5 million. I’m sure our compliance person is going to shoot me now, but our sort of mark on there is we’re at about two two and a half x markup on that fund, which it’s not quite apples to apples, but certainly Carta came out with a venture benchmark report here earlier this year and we’re basically in the top five to 15% of most metrics of venture funds. We’ve started returning capital from that fund. And then we raised our second fund in, well, two funds really. One US focused and one European EMEA focused in 2021 in 2022. And those are also starting to sort of trend the same way. 

And really this fund, the strategy here is like, look, we think this seems to be working and we’re sort of just looking to keep executing on that strategy. So if this is interesting to people get in touch through that invest page, you’ll eventually end up in my inbox and I’ll reach out and I can share some more information. And like I said, you have to be accredited or a sophisticated investor depending a little bit on the fund and there’s some minimums and some things there, but certainly get in touch and I can describe what we got going on.  

Rob Walling:
And we’ve invested in a lot of companies approaching 200 B, two B SaaS companies, and so that we’re going to continue investing hopefully at that pace over the next several years. So it’s a really nice way to index in quotes into a lot of early stage B2B SaaS companies. I don’t know of any other place that you can do it. We do it just the ecosystem of MicroConf TinySeed, this podcast and my books and all that. It really has, if you’ve ever been to a MicroConf event in person or online, it’s a unique group of folks and a good chunk of the TinySeed companies come out of folks who are in this community.  

Tracy Osborn:
I mean, it’s the REDDEST community, the best community out there.  

Einar Vollset:
Yeah, it is. I think it’s one of those things where it’s like, look, if you believe that sort of B2B SaaS, the mostly bootstrap, there’s value creation there. It is one of the better ways to access that market. It’s hard to do as an individual investor just because it’s so early. You really need to be making enough bets that you have the chance of finding the ones that do really quite well and getting access to that deal flow. And that’s very, very hard to do as an individual investor and probably only a handful of people worldwide could do it in sort of the same way that we do.  

Rob Walling:
Our third story of the day is TechCrunch article about Y Combinator. It says Y Combinator often backs startups that duplicate other YC companies. Their data shows it’s not just AI code editors. And to give folks background, if you’re an accelerator and you’re investing in a lot of companies, you inevitably will back competitors over time. And at TinySeed, we have also had to face this because you can’t invest in 200 B2B SaaS startups and expect to never invest in two companies that compete, right? So 500 startups has this Techstars yc, they’re all going to have it, but this TechCrunch article where they analyzed the data was interesting. I have kind of mixed feelings about it. I think I’ll probably kick it over to Tracy for first thoughts.  

Tracy Osborn:
The thing that really resonated with me, particularly because I’m part of the TinySeed applications process and going through interviews and picking folks and sending over offers, is that they specifically called out that they are backing the founders, not necessarily the idea, which is very similar, pretty much what we are doing as well because things change over time. People pivot, they find new ideas, they change their positioning, and folks can already, even if we try to do it based on the companies themselves and try not to back competitors, then eventually they’re going to be competing At some point people are going to, they might pivot, move around, might. Yeah, totally over time. So I thought I really resonated with that part and I was like, okay, good. I mean that we won’t really compete with yc, but it does show how the right person, the right driven person who is all in just executing super fast and doing really good stuff. It’s something we do at TinySeed and YC is doing that as well. But also yc, what are they doing per batch? I guess they’re doing four batches per year now and hundreds per season.  

Rob Walling:
I think it’s 150 to 200.  

Tracy Osborn:
Yeah. Well at TinySeed we have some competition, but then you step back at yc and then of course they specifically say in the article that even within batches and even within, I forget what they call it, but a cohort with their one partner, they’ve had competitors within that. And I’m like, that’s a little bit too close for me for my comfort with TinySeed. I want people to feel comfortable. This is something I did I had to deal with in 500 startups because I was with another startup doing wedding stuff, and that’s a whole podcast on its own, how awful that was. So I’m always cognizant of that at TinySeed. I’m surprised at YC doing that, but they’re kicking butt, so they must be doing something right.  

Einar Vollset:
I think it’s hard. One of the points that we make at TinySeed founders too is like, look, even if we had a strict, which we don’t, a strict policy, we would never back somebody who’s competing to anybody, not possible, but companies pivot all the time. It’s almost like a religion just to be like, it’s not working. Let’s do something completely different. And what are you going to do? Say people like, sorry, you can’t pivot into what you want to pivot to because we’re already backed someone doing that. That’s not going to work particularly as a minority investor, but just in general, it’s just like you can’t stop people doing that. Like I said, and the batch sizes are now, I think it’s more than 150 now. I think it is probably a couple of hundred. It used to be for the longer. I think 2020 or 2021 was the high point. It was like 300 or 400 per batch,  

Rob Walling:
But they were doing two batches a year. Now if they’re doing four, it’s got to be a little smaller. Yeah.  

Einar Vollset:
Oh, that’s right. Oh, then it might be a hundred or 150. I don’t know.  

Rob Walling:
So folks have an idea. We back across Americas and emea, we do two rounds per year every six months, and we get about 22 to 30 companies between both of those. So still a good pace, but it allows us to be a lot more hands-on and ideally not back direct competitors within the same batch. That’s kind of something we have been able to avoid to date because that feels like it could be a little bit awkward.  

Tracy Osborn:
I should mention that if there’s anyone who’s like TinySeed or yc do both. We have a few folks that have gone into TinySeed and then gone to yc. There’s advantages. I say obviously as someone who’s running a TinySeed accelerator program and being very biased towards it, but also my husband went through Y Combinator for different programs like YC is what they do, they kick butt at. And what we do, I think we kick butt at it too, but they don’t necessarily conflict. So if there’s anyone who is like, you know what, I’m looking for an accelerator program in B2B SaaS, we are fans of yc and we do encourage folks who are in TinySeed that feel like that’s the place where they want to go to jump into that, but you’re going to have a very different experience in terms of that. We have a lot fewer founders, a lot of you companies, whereas in YC, you’re going to be one of thousand. But they have other advantages that make up for it.  

Rob Walling:
And we focus on B2B SaaS. We are some of the best in the world at this. And so if you are B2B SaaS, you’re going to get more direct help. But man, if you want to raise buckets of money, this is going to play a better place than yc easy to raise. Our next story is an article on Swapnil Han’s blog. Sorry about the pronunciation there. We will certainly link this up. Title is procrastination and the fear of not being good enough, and it’s actually a short article. There’s some headings, am I just not good enough? Do I care too much about what others think? Pushing through to be able to ship stuff. The reason I bring this up is imposter syndrome is often talked about in startup space and we see mindset being such a critical element to founder success that we actually retroactively went back. 

We have our tiny C Playbook, which is seven different modules. We added playbook zero that is all about mindset. And this is a big part of it is getting over imposter syndrome. It’s not fake until you make it because faking it, I have such issues with this online of people faking stuff that’s not real, but it is internally maybe having more confidence than you think you, you should. But people get hung up and they get analysis paralysis and they don’t take action. They don’t know if what they’re doing is right and blah, blah, blah. And that is really what I wanted to call out because I know a lot of founders feel this and I know a lot of founders deal with this as they’re starting their company of not knowing what to do next, not knowing if they’re going to succeed, wondering when everybody’s going to find out they don’t know what they’re doing. So to kick us off and our ep, have you seen this trait in founders and what is your take on getting over it?  

Einar Vollset:
Yeah, I think it’s actually one of the biggest mistakes you can do as a founder. That’s sort of what I think. And I think not like fear not being good enough. That’s hard. Just get over your fear not being good enough. But I think what it materializes into a lot of the time is like you say, analysis paralysis, needing more and more and more data and favoring analysis over just action. And it’s one of the things that we tell our founders pretty early on and just try to hammer into them. And if I could filter it for this at the interview stage, I would just because I think it’s so important just as having a bias for action and being okay with operating under uncertainty. We had to kick off in Barcelona here a couple of weeks ago and I told this piece then I was like, look, a lot of the time this analysis paralysis or not moving fast enough, not moving stuff tends to be because founders, they really want to reduce uncertainty. 

They kind of don’t want to spend resources or time worrying that it’s the wrong thing. It’s uncertain whether they’re going to get a payback, particularly if you’re sort of bootstrapped, you don’t have a lot of resources, you don’t want to waste it. But my point that I was making these guys is like, look, you want to embrace uncertainty. That’s what you need. If you didn’t have uncertainty, you’d be dead in the water. As a startup, if you don’t have uncertainty on something, there’s nothing for you to exploit. If there was an market opportunity that had zero uncertainty about it, how to do it or whether it was worth doing, then someone more better resource than you would’ve already done it. And so a startup person as even as a bootstrapper, you want to operate in environments that have reasonably high uncertainty and you don’t want to wish it away. 

And I think your superpower as a startup founder tends to be tolerating operating uncertainty and making mistakes and still being able to move fast and do things under those kind of conditions. And I think sometimes around founders who sort of wish there was less uncertainty, but I actually think that would be a mistake. I don’t think there is put a gold at the end of the rainbow if there is no uncertainty. I just don’t think it’s a thing. You have to embrace the fact that, look, if you want no uncertainty, you should go get a job. And even that’s not completely uncertain, but you shouldn’t want to be a startup guy if you can’t oral, if you can’t handle that uncertainty and sort of embrace it.  

Rob Walling:
How about you Tracy? What are your thoughts?  

Tracy Osborn:
I definitely drink the TinySeed slash Einar.  

Einar Vollset:
There’s  

Tracy Osborn:
Another place where I see there’s a side to this. I see in myself I, I’m an information gatherer and I love reading things, everything I can about B2B SaaS and sales and churn and all that kind of stuff. And there’s a paralysis of then knowing what the right way of doing things and being aware of how much work it is to do it the right way. And then I kind of procrastinate because I’m aware of how much work it is. Whereas before when I was just getting into startups, I kind of just flung myself into things. I got things done because I didn’t actually have an awareness of how much work it actually would be. And I was blissfully unaware about of what it could be like to be a founder. And so I was just executing fast and doing the 80 20 and all that kind of stuff. And now it’s a little bit intimidating when the full sales process and all that kind of stuff, rather than just being, getting on the phone with someone. It’s easy to procrastinate when you have too much information.  

Einar Vollset:
I think sometimes it’s just a matter of I didn’t realize that we couldn’t do it, so I just did it. Actually. 

It’s like General Patton during World War II famously, or maybe if you’re just a nerd, he got an order not to take to bypass this German city because he was going to take four divisions and they didn’t think it was worth it. And he radio back and says, I took it with two, should I give it back? Kind of thing. So I think there’s a certain amount of that. The ignorance is blissing, but I also think one thing to internalize also is that most doors are two eight doors. There’s very, very, very few things in the startup world that can’t be undone if it turned on out to be the right thing. And it’s just to a degree just kind of try it and see it tends to be the best approach.  

Rob Walling:
Our last story of the day is about Australia proposing their quote, world leading ban on social media for children under 16 from Reuters. We will link it up in the show notes. Tracy Osborne is someone who has been on social media since you were 16. No, I’m just kidding. But  

Tracy Osborn:
I mean kind of. I was 11 years old. Was  

Rob Walling:
It Tumblr?  

Tracy Osborn:
No, this is before Tumblr. I had  

Rob Walling:
TI  

Tracy Osborn:
Had, yes, I owed bed a chat into my website. I had a Terry Brooks fan website and I had a chat on there and Terry Brooks, the author, fans around the world would use my chat and my dad would be like, what are you doing? Are you in a chat room? And I’d be like, no. And I go back to talking to all my friends on the internet. So technically yes, there was some sort of social network that I was probably not supposed to do it that time, but as an adult, as someone who is in her forties, I feel like the internet has kind of updated. I’m curious, Rob, you have kids and I’m curious what you think about this. I don’t have kids myself. I just have my own experience of,  

Rob Walling:
Yeah, it’s interesting and then I’ll pass it to a R as well, because a R has kids under 16. I don’t think social media is good for anybody. I especially don’t think it’s good for kids who are just so much more addictable, which is not a word, but it’s just easier for them to just get hooked on stuff. As you can tell by you, give a 10-year-old an iPad and they’ll play it for 24 hours straight and not eat and not sleep and all that. Not saying adults don’t do that, but it’s definitely the brains are still forming. So I don’t think social media is good. I also don’t think kids having cell phones carrying around all the time is good. And yet I have a 14-year-old with a cell phone and I have an 18-year-old with a cell phone. The question for me is, do I want the state legislating that? 

I guess if the state does, then that makes it easy across the board because then when my 14-year-old says, but you won’t let me on insert name of Snapchat, it’s like, oh man. But all the other kids do, and if the country bans it, then it’s not an issue for me. Now, do I like the country or my government overreaching and telling me what kids can and can’t do? Well, I mean I guess they do it for alcohol, right, and smoking. And is social media as bad for them as that? It could be debatable, right? They’ve done studies of the high suicide rates. So I overall am probably just fine with governments limiting children’s use of social media. I do think it should be the responsibility of the parents, but I just know so many parents that don’t it much be like, let’s say there was no drinking age minimum and there was no smoking age minimum, that would be a problem. 

There would be parents that wouldn’t care, wouldn’t enforce, and we’d have 13 year olds, not that we already don’t, but we’d have 13 year olds smoking a pack a day and drinking a bunch. So I do think having the laws and some barriers is not a bad thing for the government to impose. My kids are barely on social media. They’re more like in Discord and they’re in messaging apps where they message friends, but they’re not in public places where they’re posting. They’re not doing Twitter, Instagram to public audiences. Einar Vollset, you have kids under 16. Are they on social media? And what do you think of policy like this?  

Einar Vollset:
Well, it sort of depends. I define social media, but no, they’re not on social media that I’m aware of anyway.  

Rob Walling:
That’s the thing.  

Einar Vollset:
They’re on discord with their friends and YouTube is a constant in my household. So that’s the thing. Yeah, I guess I don’t more the libertarian side when it comes to this. I don’t trust the government to tell me what to do with my kids fuck yourself kind of thing. This tends to be my standard MO when it comes to, I’m like, really? You’re going to regulate this? And this is me having been in academia. Anytime there’s a newspaper piece about what experts found, I’m like, did they now? Okay, I don’t believe you. So that tends to be the thing too. So I’m like, look, good for you Australia. You do what you need to do. But do I think, would I be excited if Gavin Newsom decides to this apply to California? No, I wouldn’t. I would almost be like kids that sign up for social media. But that’s probably more my personality, more anything else.  

Tracy Osborn:
I mean, I look also back at my 11-year-old self clicking through all the, are you 13 messages on the internet? And I was like, yep. Even though I was 11. So it’s not like it’s hard to get around.  

Einar Vollset:
No. So I actually only peripherally paid attention to this thing. And the Australia thing is, look, the more concerning thing, and this is again, the more libertarian side of my personality is like, how are they going to enforce this? And the answer is apparently that they’re going to require all Australians to provide identification to access the internet. And at that point I’m like, no, no, you don’t get to do  

Rob Walling:
It. That’s the problem is these things infringe, right? They start getting real up in your face. Yeah,  

Tracy Osborn:
They have good intentions, but the outcomes are terrible. Yeah.  

Einar Vollset:
Yeah. So that’s my view. I’m like, I don’t think so. My personal view,  

Rob Walling:
Tracy Osborn, if folks want to keep up with you, you are. Tracy makes on Blue Sky.  

Tracy Osborn:
I mean it is. In my title it says Tracy Osborne parentheses. Tracy makes literally for you, Rob. I put it in there.  

Rob Walling:
I’m going to say this is not going to die with you. You know that Tracy Osborn dot com on Blue Sky and our vol set while you are in our set on X Twitter, if folks want to keep up with you, they should head to TinySeed dot com slash invest.  

Einar Vollset:
That’s right.  

Tracy Osborn:
He’ll be our best friend. If you come with a bucket of money,  

Einar Vollset:
Buck I money. I’m only accepting pockets of money these days. No small change. A hundred dollars bills only. Yo,  

Rob Walling:
Thanks for joining me. You too.  

Einar Vollset:
Thank you.  

Rob Walling:
Thanks to tracy osborne.com and a r vol set for joining me this week on the show. And thank you to listening to this episode and with you’ve been listening for five or 500 episodes, I appreciate you being around. If you keep listening, I’ll keep recording. This is Rob Walling signing off from episode 744.

Rob Walling:
I’m Rob Walling and in this episode of Startups For, the Rest, Of Us, my wife, Dr. Sherry Walling and I read chapter one of our new book called Exit Strategy, the Entrepreneur’s Guide to Selling Your Company Without Regret. This effectively will become the intro and first chapter of the audio book, so you get a free preview of the audio book to see if you might like it. The Kickstarter for this book closes this week on December 12th. You can of course go to kickstarter.com and search for exit strategy or you can follow the link in the show notes. It would be amazing to have your support. This campaign is not doing as well as the SaaS Playbook did, and so every bit helps, every pledge helps, and even if you are not thinking about selling your business today, I believe it is never too early to set yourself up for success, even if it’s months or years down the line when you decide to sell. 

And this book talks about all this stuff to think about before, during, and after. And the before section is super helpful even if you aren’t thinking about selling today. In addition, applications for the all new MicroConf Connect are closing today. December 10th. MicroConf Connect is our application only membership and we only open applications once per month to ensure everyone who’s accepted is onboarded together in a cohort and that we can give them the support they need. All members who sign up will have access to an Ask Me Anything with me on December 12th. If you miss the application date though, you can make sure to sign up for the wait list. We’re going to reopen applications after the new year. That’s MicroConf connect.com and with that, let’s dive into the intro and first chapter of Exit Strategy. You’re listening to Exit Strategy, the Entrepreneur’s Guide to Selling Your Business Without Regret. Written and narrated by Sherry Walling, PhD and Rob Walling,  

Dr. Sherry Walling:
Not PhD.  

Rob Walling:
Well done  

Dr. Sherry Walling:
Rob Walling Odd Blank Space.  

Rob Walling:
Thanks for pointing that out. This book has a forward by John Warlow, the author of Built to Sell and several other books about selling your company.  

Dr. Sherry Walling:
He’s a pretty smart person,  

Rob Walling:
Very smart. It was awesome to get his forward book is Copyright 2024 by Rob and Sherry Walling. There’s a lot of praise in here. John Warlow, Jason Cohen, Derek Sivers, JJ Virgin, Sam Parr. Ben Chestnut. I think we did good. I really appreciate everyone who wrote us a testimonial.  

Dr. Sherry Walling:
How much did you have to pay those people to say nice things about this book?  

Rob Walling:
Exactly. $0 and 0 cents. Did send an email to them though. Really appreciate  

Dr. Sherry Walling:
That. Thanks y’all for saying nice things about the book and reviewing the book. I mean, a bunch of them actually read the book.  

Rob Walling:
That’s the dirty little secret right of author blurb. Testimonials is most of those are just because someone and they don’t actually endorse the book, they don’t read it, but I get the sense that most or all,  

Dr. Sherry Walling:
Most of our people, this book,  

Rob Walling:
Yeah,  

Dr. Sherry Walling:
This book is dedicated to Genesis Riley Cook being her guardian parents taught us a great deal about going all in on love and letting go with grace. So let’s jump in. This is the introduction. The last days exiting your business with intention. It feels like I’m going through a divorce. This is the most stressful thing that’s happened to me outside of my wife getting cancer. Is it reasonable to feel like this is one of the most difficult parts of my life? These thoughts are not what you would expect to hear from someone in the midst of an event that will leave them millions of dollars richer, but we hear them all the time. Different wording, different dollar amounts, the same sentiment I’ve been working my whole life for this moment. Why is it so painful? Selling your company is one of the most fragile points in the life of an entrepreneur. 

It is a messy psychological process, often accompanied by an implosion of identity and emotional stability. It requires an extraordinary amount of focus over a long period of time. It disrupts your sense of meaning, your sense of accomplishment and your vision for the future. It’s extremely challenging for your personal and professional relationships. Exiting a business is a transformational experience that few people have Beyond the headlines and highlight reels, there’s sparse conversation about how to do it well. We have a few models to describe the nuts and bolts of the process, but none to guide the deeply personal aspects of a monumental deconstruction and reconstruction of one’s life. We call an exit transformational because it involves change at every layer of life. From the way you introduce yourself to how you begin each morning, what your bank account looks like and the fears that keep you up at night building and then leaving a business is emotionally similar to raising a child who heads off to adulthood and inadvertently fires you from the day-to-day tasks of parenting. 

You can do everything right and have a wonderful outcome for all your labor and still feel deep emptiness and disorientation. Like any good story, your business has a beginning, a middle, and an end. There’s the seed of a dream that kicks off the adventure. There’s the arc of the story complete with try fail cycles, emotional peaks and valleys and plenty of high stakes, and then there’s the big finale, the exit. You will exit your business. You might sell it. You might go public and get voted out by the board. When you don’t hit your quarterly targets, you might shut it down either by choice or because you feel the story arc has finished or because you run out of money. You might choose to step into retirement and hire someone to take over day-to-day operations. You might die and leave the spreadsheets and shipping deadlines to be decoded by your co-founder, COO or spouse. 

One way or another, your relationship with your business will end and although there are several ways this relationship can end, this book focuses on exiting via a sale. This is the exit most entrepreneurs aspire to achieve, one that warrants significant preparation and planning. Every founder knows this intellectually, but if you think about their exit until it’s too late and no one is prepared for how hard it’s going to be, the good news is that you get to shape the story arc of your company. You get to participate. Are you writing the story or is this story writing you? There are plenty of books about major life transitions from aging to divorce to empty nest. The sheer volume of self-help and practical guidebook speaks to how difficult and momentous these major midlife shifts are for the human psyche. However, few books prepare you for selling your company. 

Of course, exits are not nearly as universal as kids leaving home or the slow transitions of aging, but for the millions of people who identify as entrepreneurs, some kind of exit is inevitable. This significant and disruptive experience in the life of the business owner is not given the thought or attention that it deserves. Exits are complicated. They are financially and legally intricate. They are incredibly stressful. There are many relational implications. They also rearrange a founder’s identity in deeply felt and widely sweeping ways. No matter where you are in the process, it’s important to prepare yourself for your exit to achieve your optimal outcome. You must be mindful about setting yourself up for the exit trajectory most congruent with your goals. Exits are not magic. They don’t just happen one day when the money wizards stops off at your office with a wheelbarrow full of cash. They are usually the result of careful planning and thoughtful decision-making. Failing to prepare can result in many complications even if you do achieve your optimal outcome and sell to someone you trust. For buckets and buckets of money. A simple truth remains. Selling is one of the hardest experiences of a founder’s life.  

Rob Walling:
When we tell this to entrepreneurs, they rarely listen. They nod and they smile politely. They hear what we’re saying, but they don’t really listen. After all, every part of entrepreneurship has been challenging and if they’re going to sell anyway, what does it matter that it will also be hard. We’re not telling you this to scare you off. You already know selling will be hard even if you don’t yet know how hard and who better to prepare you for this difficult journey than a clinical psychologist specializing in entrepreneur mental health and a serial entrepreneur with 20 years in the trenches supporting founders through the full scope of the entrepreneurial journey.  

Dr. Sherry Walling:
Hey, that’s us.  

Rob Walling:
That is us. Between the two of us, we’ve seen hundreds of founders through their exits. Dr. Sherry has been helping entrepreneurs with their mental health relationships and big decisions since 2016. Prior to this, she spent 10 years helping people put their lives back together after trauma loss and major disruption. She has deep expertise in grief along with personal experience coming back to life after a significant loss. For more on this, check out her book Touching Two Worlds.  

Dr. Sherry Walling:
As the co-founder of MicroConf for TinySeed, Rob has worked with thousands of founders across all stages of business. He has also started six yes, six companies and gone through multiple exits including his successful and wildly stressful exit from Drip.  

Rob Walling:
Did you roll your eyes when you said six companies? Like each one of those took years off your life?  

Dr. Sherry Walling:
Yeah. I can name all of my gray hairs and wrinkles after the companies that  

Rob Walling:
After each of the companies, our first book for startup founders, the Entrepreneur’s Guide to Keeping Your Shit Together, how to run your Business without letting it run You helps you navigate the beginning and middle of your business’s story arc. This book is about nailing the big finale. In writing this book, we aim to shine a light on the path before you so you can see the challenges and pitfalls ahead. We can’t make those challenges and pitfalls easier, but we can prepare you to face them. Our goal is this to help you protect your family, your relationships, and your mental health while working toward the best possible exit for you and everyone in your company. This book offers frameworks to simplify the complex mental, emotional, and relational challenges of exiting. It draws on the combined wisdom of thousands of founders we’ve coached, talked to, laughed with, cried with, and advised over the years.  

Dr. Sherry Walling:
You’ll also hear firsthand lessons from Rob’s own experiences selling his companies and my experience during him on as well as insights gleaned from interviews with other entrepreneurs about their exits.  

Rob Walling:
Finally, we provide practical strategies to help you exit well. We will touch on the elements of a deal and some basics of negotiation, but this book focuses more on the space between your ears than the line items in the contract. For detailed guidance on deal structure and company preparation, see our resources at the end of this book for well-crafted, practical content about preparing your business for your departure. Whether you’re selling an e-commerce company, a children’s brand, a trapeze franchise, a consulting agency, or a software as a service or SaaS business, we’re here to help you prepare. Every exit is unique and there’s no such thing as a game plan that will lead you through all the steps. As the Spanish poet Antonio Machado wrote by Walking the path is made and when you look back, you’ll see a road never to be trodden again. No one can tell you how to walk the path, but we can equip you for the journey. Let’s get started.  

Dr. Sherry Walling:
Let’s get started. Section one of the hardest things you’ll ever do. Chapter one. Why is this so difficult? Julie Ellis and her three co-founders hadn’t intended to sell their beloved children’s label company Mabel’s labels, but when one of the largest companies in their space made a $12 million offer, the four co CEOs decided it was time the business structure of four co-founders with equal decision making power was starting to feel too slow for the rapidly growing company Julie told us in an interview, yeah, that makes total sense to me. For people making decisions is a lot. Plus, after 13 years of pouring all their resources into building the business, the sale would provide each of them with a nice nest egg for retirement. There comes a time when getting your money off the table starts to look pretty appealing. She said the timeline was aggressive less than six months from the first talks to the closing date, but the acquirer checked the boxes. 

Julie and her co-founders wanted checked. They were Canadian owned and would let Mabel’s labels keep running on its own rather than dismantling and absorbing it. It seemed like the perfect situation, but Julie quickly learned how exhausting selling a business could be. The exhaustion only grew as she went to work for the acquirer immediately after the sale and realized that the marathon finish of the acquisition was actually the starting line for a new kind of race. Six months after the sale closed, she left the business. She thought she would never leave exhausted and uncertain about her next direction. As entrepreneurs we’re always climbing for a pinnacle, Julie said, but there’s always another pinnacle after the first one and another one after that, and many entrepreneurs fall into the trap of dismissing or diminishing their accomplishments. We have an inability to find a plateau and rest on it. 

For a little while, said Julie. For Julie, the exit was a vast plateau. It should have felt like a victory, an opportunity to rest, but her entrepreneurial mindset was trained to keep pushing for the next accomplishment. Sitting on that plateau sparked an avalanche of new questions. Is this the best I will ever do? What will happen next? Was it a mistake? Even when an exit is going smoothly? The untold story is that many founders experience a significant mental implosion during and after the process. It’s possible for something very good to happen while still feeling a lot of emotional turmoil or conflict. These emotions can coexist. Talk to anyone who’s had a baby gotten married or started their dream job, and you’ll often hear that the joy was accompanied by a sense of inner disorientation. Exiting is an emotionally tumultuous event and it’s worth taking the time to prepare your mind as well as your business. We are not trying to scare you, but time and time again entrepreneurs have said how surprised they are that selling their company is so hard. If you go into it with eyes wide open to the challenges and armed with strategies to get through them, you’ll be miles ahead of someone who’s going into it with the magical thinking of signing some documents that yield a personal bucket of money and a room full of elated employees, friends and family members. So let’s start by digging deeper into the psychology of what makes this process so difficult.  

Rob Walling:
Hiring senior developers can really move the needle in your business, but if you bring on the wrong person, you can quickly burn through your runway. If you need help finding a vetted senior results oriented developer, you should reach out to today’s sponsor lemon.io. For years, they’ve been helping our audience find high quality global talent at competitive rates, and they can help you too. Don’t just take my word for it. Listener. Dylan Pierce had this to say about working with lemon.io. The machine learning engineer they helped me hire was very professional and even learned a new tech stack to set up an environment to train and deploy machine learning models. He documented his work clearly so I could train it in the future with additional data. I’m super happy with the results and longtime listener. Chaz Yun hired a senior developer from lemon.io and said his higher quote, definitely knew his stuff, provided appropriate feedback and pushback and had great communication including very fluent English. He really exceeded my expectations. Chaz said he definitely used Lemon IO again when he’s looking for a senior level engineer to learn more and get a 15% discount on your first four weeks of working with a developer head to lemon.io/startups. That’s lemon.io/startups. 

Your business is your baby. Entrepreneurs are deeply connected to their businesses and a study of entrepreneurs, emotional experiences and neurological activation. Scientists used functional MRIs while asking entrepreneurs to think about an image of their business. They conducted the same experiment with parents asking them to think of an image of their child. When comparing the brain activity of both groups, they found remarkably similar activation patterns. Specifically the study showed that activity was suppressed in regions of the brain involved in critical assessment. Specifically, the study showed that activity was suppressed in regions of the brain involved in critical assessment, while it heightened in areas associated with the brain’s reward center. In real world terms, this means that entrepreneurs and parents experience a similar sense of delight and satisfaction when thinking about their beautiful, perfect, above average children or businesses. Whether we’re thinking about our children or our businesses, our perceptions are not entirely objective. Both entrepreneurs and parents tend to view their subjects with a positive bias rather than objective clarity. Running with the parent analogy, you may rationally understand that your relationship with your children will change as they mature. You may also know that the goal of parenting is to raise autonomous independent individuals who do not live in your basement. 

Our 8-year-old moved out, went to college and currently lives in our basement, so this one hits a little close to home.  

Dr. Sherry Walling:
Whoops, we might not be very good at this.  

Rob Walling:
You may even be emotionally ready for your 18-year-old to leave home to preserve everyone’s sanity. However, understanding this doesn’t make the transition any less emotional or challenging. It’s not so different with a business. If you’ve built it well, there will come a time when the business outgrows you, but neurologically speaking, entrepreneurs often don’t perceive a clear separation between themselves and their businesses. This means that no matter how you pride yourself on being, it’s incredibly difficult to see yourself and your business objectively during and after your exit. When you commit so much of your time and energy to the formation and growth of a business, it is perfectly natural for the business to become an extension of your identity. You intertwine yourself and the business and other people may see you and the business as intertwined. Those years of intertwining get unraveled in an exit, A topic we’ll explore in the latter half of this book, there are psychological pros and cons to thinking of your business as your baby. Generally speaking, it isn’t a great idea to tie your wellbeing to an external entity that is highly vulnerable. Just social media algorithms or the supply chain from China. Too much of your identity is wrapped up in things you can’t control, but regardless of whether or not it is optimal, the neural imprinting between a person and their business is substantial and consistent.  

Dr. Sherry Walling:
Another reason it’s difficult, you’re entering the unknown. Businesses tend to grow slowly. You have the seed of an idea and then spend months or years on your own building it into something people want. You create your team slowly refining your product and growing your company until you suddenly look around and realize you have 20 people working for you. And then in a move that can feel like it happens overnight, you begin an exit process. You find yourself in a new location, a new world. The sudden shift is disorienting to say the least.  

Rob Walling:
Here’s a quote from a post exit founder. As a first time founder, it’s scary. Giving up a business is going well and recognizing whatever good fortune that allowed you to thrive might not be repeatable.  

Dr. Sherry Walling:
It’s not just the suddenness of an exit that’s disorienting. It’s also the potential loss of your identity, direction, and purpose. Returning to psychology, if you consider the typical progression of human development, we see rapid changes in our early lives. We try on adolescent identities, a jock, a punk, a goth. Oh yeah, I like the breakfast club. We leave home for college, perhaps switch our career paths a few times. We enter into and leave intimate relationships. We establish ourselves professionally. We purchase homes and couches to cats in a fish tank. We might have children. We start companies. As we age, the rate of these life-changing events slows down. We can no longer move apartments in one afternoon with our cousin’s pickup truck. We grow comfortable with our stable lives and identities. Mature adulthood means that generally we know who we are and how our life operates, and then we face an exit and we’re thrown into the unknown once more because of the depth of the relationship between the entrepreneur and the business. This is not a casual unknown. It is a deep unknown, a fairly comprehensive recalibration of who we are and how our life works. Most dramatic life-changing events that happen in the middle of adulthood are traumatic, like a car accident, a divorce, the death of a parent. What comes after the can be daunting. The exit creates instability and unpredictability, and after years of leading and directing the path of your business, it requires you to surrender control. It can feel like going backwards.  

Rob Walling:
Here’s another quote from a post exit founder. It’s not often as a 43-year-old, I have a major life decision. Most of what we want at this point is predictability, and the uncertainty of what comes after this is daunting.  

Dr. Sherry Walling:
It can feel like you’re 18 again and wondering what the hell you’re going to do with the rest of your life.  

Rob Walling:
On top of all that, going through an exit is incredibly isolating. Think of it like an iceberg. The tip of the iceberg is the public perception of what you’re going through. Everything below the water is what you’re actually experiencing from the perspective of your employees. Team members and the public exits are seen as times of celebration. Pop out the champagne and the celebration emojis because now you’re a millionaire, right?  

Dr. Sherry Walling:
Which is the celebration emoji.  

Rob Walling:
There’s a confetti one, and then there’s one that looks like a bullhorn with confetti around it. I think if you type in colon confetti, oh, that’s in slack anyways,  

Dr. Sherry Walling:
Alright,  

Rob Walling:
And while that’s partially true because getting millions or tens of millions of dollars wired to your bank account is a pretty incredible moment, that’s only the tip of the iceberg. The rest is an incredibly nuanced experience that the founder goes through alone. You’re trying to make the best decision for yourself and your business processing a complicated multivariate analysis in your head, and often you might be legally barred from talking about what you’re working on. When I sold Drip, I experienced a barrage of congratulations. While mentally I was almost at my breaking point. This created a deep sense of disconnection because it was nearly impossible to talk about the realities of the exit due to non-disclosure agreements or NDAs and the dearth of people who could relate to my experience. Exiting is a low frequency event. There just aren’t that many people who’ve done it. Many other major life transitions are universal puberty, completing high school, choosing a life partner, pregnancy, the death of a family member, a child departing home and aging. They’re challenging shifts, but almost everyone has experienced them. There’s plenty of collective wisdom and guidance available to help you navigate these difficult transitions, not so with an exit. It’s a pretty small club and you have to work hard to find commiseration guidance and support as you enter this unknown territory  

Dr. Sherry Walling:
And there’s no blueprint. Another factor that adds to the feeling of isolation is that there’s no blueprint. Exiting is like a fingerprint. No two look exactly the same. As we mentioned, exiting is a low frequency event. It’s also a high variability event, which means that even the few other people in the world who have gone through an exit haven’t gone through your exit. If you and I both decide to sell our houses today, there’s a relatively standard process to follow. It’s a high frequency, low variability event. Sure each home is unique, but millions of homes are sold around the world each year. Even if you haven’t sold a house before, you probably know a dozen people who’ve been through the process and there are standard templates you can follow selling a business. On the other hand, each experience is unique. Maybe you’re part of a mastermind or run in entrepreneurial circles and even have other friends who are founders, even if that’s the case, and even if some of them had gone through their own exits, the chances that someone has gone through your exact scenario are very low. No one can hand you a blueprint for exiting your business. The number of variables is just too great and there’s never one right answer. When selling your company, your hand sketching your blueprint while the backhoe digs the foundation  

Rob Walling:
And all that got you here, won’t get you farther exiting well requires a new set of skills. During the course of running your business, you’ve learned how to build, how to sell your product, how to market, how to lead your team, how to build a profitable company. None of those skills apply to what you’re about to do. In fact, the main drivers that got you to this point, your passion for your product, your commitment to your team, your dedication to your business can stand in the way of a successful exit. Many entrepreneurs have difficulty making clear decisions during a sale because they care so much about their team and their business. You’ve spent years or decades building something incredible and developing the passion to run it. After all, everyone’s got the cutest baby right now. Not only do you have to go through one of the most difficult and isolating times of your life without a blueprint, but you also have to unlearn old habits and teach yourself a brand new set of skills  

Dr. Sherry Walling:
And it’s irreversible. If you hire the wrong engineer, you can fire them and find a better fit. If you develop a feature that turns out to be a dud, you can always scrap it and try something new. If you invest in a marketing approach that turns out to be a waste of money, you can also change course. Those are reversible decisions. You can make them relatively quickly without too much stress. Exiting your company though is irreversible. Sure, we’ve all heard of people who repurchased a company after they sold it, just like we’ve heard of couples who got back together after a divorce. But both situations are pretty rare. Because of this, it’s not a decision you should make quickly. It should stress you out. You should spend a lot more time thinking about it than you did thinking about who to hire for that engineering role. The decision is irreversible, so you should make damn sure it’s the right decision, except  

Rob Walling:
You can’t see the future, which means there’s absolutely no way to know if you’re making the right decision. All you can know is that you’re making a decision, which is hopefully the best decision you could make with the data you have. You can run various calculations and imagine what life might look like if you continue to grow the business for another 20 years versus selling it now and walking away with a specific dollar amount. However, you can’t actually know how any of these scenarios will ultimately turn out. We know founders who wish they hadn’t sold, founders who felt like they sold for too little, and founders who declined an offer that in retrospect was a once in a lifetime deal. There are many potential scenarios for regret. With the benefit of hindsight, they might have made a different decision. None of us can see the future though. The only thing you can do is make the best decision you can with the information you have right now.  

Dr. Sherry Walling:
So now let’s shift to six factors that shape how you feel about an exit and our experience working with entrepreneurs. Six factors strongly predict the emotional process of an exit. So we’ll discuss these factors throughout the book. The first one we want to talk about is motivations. The reasons behind your decision to sell the company significantly impact how the process will affect you mentally. Are your motivations purely financial? Are you seizing of lucrative market opportunity or strategic acquisition? Are you feeling called to shift into different or more meaningful work? Are you selling off one product to concentrate on the success of another, or are you selling somewhat reluctantly due to unexpected life changes, burnout, fatigue, or depression? When you understand your motivations, it helps clarify what a successful exit looks like for you regardless of your situation. It also helps you gauge the emotional reserves you have available for the exit process. Beginning an acquisition process while experiencing burnout is like running back-to-back marathons. It’ll be highly emotionally challenging. It’s crucial to be aware of your energy levels and core needs as you navigate the process.  

Rob Walling:
The second factor is tolerance for uncertainty. If you started a business, then tolerance for uncertainty is your bread and butter. But as we’ve mentioned, the level of stress and uncertainty during the exit process is a whole new ball game. Founders who have a high tolerance for uncertainty will have an easier time during their exit, but even if that’s you, it will require all of your coping skills to rise to the challenge. It’s worth assessing those coping skills. Now, take stock of the ways you tend to deal with uncertainty, both positive and negative, and create a plan for implementing or mitigating them during your exit.  

Dr. Sherry Walling:
The third factor is good old fashioned stamina. Exits take longer and are more complicated than anyone imagines at the outset. Even if you have a fantastic strategic buyer and the purchase price is agreeable and the details seem to be lining up, it always takes longer than it should. There’s a lot of paperwork. There are many people, employees or customers who need to be brought along strategically with thoughtfully crafted information. Pace yourself and prepare yourself mentally to run a marathon.  

Rob Walling:
The fourth factor is team psychology. The way an entrepreneur views their team is another critical factor. What is your relationship like with your team? Do you see them as family? Are they literally members of your family, friends from high school? Are they a curated workforce that you’re paying to do their jobs? How do you see responsibility to them when you’re setting yourself up to exit? Hopefully with a nice pile of money, your existing relationship with your team will significantly impact how you feel about exiting.  

Dr. Sherry Walling:
Number five, identification with the business. How closely do you identify with your business? Whether you built it from scratch over decades or have been running it only a few years? At least part of your identity is probably closely tied to your company. As you consider your exits important to find meaning and engagement in other areas of your life, your hobbies, family, community, and other passions. Exiting a company can feel like cutting off a limb, but founders who have found a meaning in other parts of their lives tend to have an easier time. The earlier in your business journey that you begin to separate yourself from your business, the better for you and for your business. You may want to ask, how well can this business run without me? The business may be more valuable. It almost certainly will be more valuable if it isn’t tied to you and you are healthier pre, mid, and post exit. If your sense of worth as a human being isn’t intertwined with your business.  

Rob Walling:
The six factor is a sense of what’s next. It’s easy for a founder to get so wrapped up in the exit process that they’re not thinking about what comes after. However, it’s healthier to start thinking about future plans and gently engage with those plans as early as possible. We use the word gently because rushing into a plan to offset the uncertainty can be problematic. Instead, approach it with a sense of exploration. Gently noodle through ideas. Don’t solidify them by pouring concrete. The question of what’s next can either haunt you throughout the exit process or serve as a north star that guides you into the next phase of your life.  

Dr. Sherry Walling:
So at the end of each chapter, we decided to make these little sections called making it real, and in ’em they’re kind of like practice assignments. These parts of the book where we want to translate the content of the book to something that you can actually use and apply to your life. So for this first chapter, the Making it Real section says, start your exit journal. Grab a notebook or open a password protected document and write down what a good exit would look like for you in this exercise. Practice active imagination. Close your eyes and imagine your last day at your company. Imagine some last act like locking your office door, closing your laptop, offering a goodbye hug to one of your team members. In your imagination, examine yourself. How old are you? What is your emotional state? How do you feel about this ending, this last act? And now let’s jump scenes. Imagine you are telling an old friend about the last day at your company. Imagine that you are happy, proud, satisfied that your exit went exactly as you’d hoped. What’s the story that you tell them? Who was the acquirer? What was the sale price? Where are you taking your loved ones for a celebration? Now, begin to imagine yourself in this scenario. It is one way to practice a not yet experienced reality,  

Rob Walling:
And we wrap up chapter one with a sidebar titled, think About Your Exit Before You Get Started. Ideally, you’ve been thinking about your exit since day one. A good exit strategy is like a prenup in a marriage, especially if you have a co-founder,  

Dr. Sherry Walling:
Hey, do we have a prenup?  

Rob Walling:
No, our net worth was like $8,  

Dr. Sherry Walling:
But I had a guitar.  

Rob Walling:
That’s true. $8 plus a guitar. Entrepreneurs who have never thought about it usually find themselves blindsided three, five or 10 years into a business when life circumstances change, they get tired of the business or they get an offer with a shocking number of zeros. Everyone exits. If you don’t plan for it early enough, you’ll find that your business isn’t prepared to go on without you once the day comes. And if you don’t think about yourself exiting, you’ll be emotionally jarred when you find yourself pondering. Now, what do I do with myself? In your mind? Begin to see an exit as a universal stage in the lifecycle of any entrepreneur. Make it the assumption, the default setting, not to get too dark about it, but a helpful analogy is thinking about exiting your business, like making sure your affairs are in order for the end of your life.  

Dr. Sherry Walling:
That is dark, dude. Nobody’s going to die.  

Rob Walling:
Nobody’s going to die.  

Dr. Sherry Walling:
Oh wait, whoops.  

Rob Walling:
People are depending on you to leave your business in good shape. If you suddenly need to leave, there’s no way around death. Taxes and exits. Have an ongoing open dialogue with yourself and the relevant people, even if it’s just a password protected document where you can jot down thoughts and explore your exit ideas from time to time. Whether or not you can visualize the end of your relationship with your company, start having that conversation with yourself today. Don’t wait until you’re forced into it without having enough time to think and plan. You might miss an opportunity because you were unprepared to seize it, and definitely don’t wait until you’re in the middle of stress and burnout to make some of the most important decisions of your business life. Though, if that’s you, we’ll walk you through that process too.  

Dr. Sherry Walling:
Hey, good job reading.  

Rob Walling:
Yeah, you too.  

Dr. Sherry Walling:
You read. Good.  

Rob Walling:
Thanks for joining me on the show. I know I grew up reading and writing and arithmetic and  

Dr. Sherry Walling:
Speaking English.  

Rob Walling:
Speaking English. Well, thanks for joining me on the pod here.  

Dr. Sherry Walling:
My pleasure. Thanks for writing a book with me.  

Rob Walling:
How’d it feel reading that first chapter? We have not read the book out loud. It really well.  

Dr. Sherry Walling:
I just gave a talk about the content of the first chapter, so I didn’t read the book, but I actually used some of the language verbatim, so I felt like, oh, I’ve have actually read this out loud before.  

Rob Walling:
Did you just say I haven’t read the book, the book that we wrote?  

Dr. Sherry Walling:
No, I haven’t read it out loud.  

Rob Walling:
Oh, got it.  

Dr. Sherry Walling:
I’ve read it multiple times.  

Rob Walling:
Like proofreading. Yeah,  

Dr. Sherry Walling:
Yeah. But I have not read it out loud. It’s not been the book that our children have requested for their night night pre-B bedtime story being as they’re 18 and 14.  

Rob Walling:
I think it felt good. It holds up. It’s always a different experience reading something out loud.  

Dr. Sherry Walling:
Yeah, I mean, other times that I’ve done this, I’ve really wanted edit things as I’m reading it, it feels clunky or like, no, that’s not how I want to say that. But I made a few little wording adjustments as I was reading, but generally speaking, I think the writing is quite good.  

Rob Walling:
Yeah, I’m the same. Every audiobook I’ve ever read, I have made edits to the manuscript as I’ve been making it because there’s just certain things that you find are clunky or I believe in the very read through the SaaS playbook, there was one sentence where it was missing the word not, and so I said the exact opposite. It was probably something like, you should definitely do B2C or something like that, and I was like, what has to be not, I cannot print this book. People think it’s an April Fool’s joke. So anyways, thanks for joining me on the show. Folks want to learn more about the book, where do they go?  

Dr. Sherry Walling:
Exit strategy book.com.com.  

Rob Walling:
See you next time.  

Dr. Sherry Walling:
Peace.  

Rob Walling:
Thanks to Sherry for joining me on the show today, and thank you for joining me this week in every week. This is Rob Walling signing off from episode 743.

Rob Walling:
Welcome back to Startups For, the Rest, Of Us. I’m Rob Walling. I’m on a solo adventure today and I’m going to be covering topics ranging from normalizing, doing hard things about just getting used to doing hard things about how bisons walk into storms. Not sure if you’ve heard about this, but it’s an interesting adaptation they’ve developed over hundreds or thousands of years, and then about making it work, making it right, and making it fast. Before I dive into that, the Kickstarter for my new book Exit Strategy, the Entrepreneur’s Guide to Selling Your Business Without Regret is Live and it closes next week on December 12th. You can head to the link in the show notes or you can go to kickstarter.com and search for exit strategy. The book is 260 70 pages of all the knowledge that my wife, Dr. Sherry Walling, who is a founder and executive coaching consultant and myself have gathered over the past couple decades of working with entrepreneurs, advising them, investing in them and having had an exit or two ourselves. 

So you can head to exit strategy book.com and also get a link to the Kickstarter there. It would mean the world to me if you’d back it. And also I think that everyone, whether you’re just starting out or whether you’re thinking about exiting or in the middle of exiting, can use some mental support, psychological support and really learn from not only Dr. Sherry and I, but the 15 or 20 entrepreneurs who have exited that we interviewed for this book. So I’m really proud of what we put together and I think for $30 it’s quite this steal in terms of the amount and the quality of the information that you’ll gather from it. In addition, MicroConf mastermind applications close on December 4th. You’ve heard me talk about Mastermind’s ad nauseum on this podcast about the tremendous impact that they’ve had on my entrepreneurial career, not only in the moment, but just keeping me going for the past couple decades. MicroConf masterminds.com if you want to get matched with like-minded founders who are bootstrapped and mostly bootstrapped but ambitious and looking for accountability, friendship, comradery, and frankly just looking to not feel so alone. So that’s microcom masterminds.com. 

Let’s dive into my first topic of the day. I want to tell you a story about a trip that my track team took to Hawaii in high school. I think I was a junior and this was a big deal. None of us had ever been to Hawaii and we went out there to compete in an invitational type thing, but we had to do fundraisers and such to afford the tickets and all that. And while we were out there one day, my coach was driving the rental car back to the hotel and the hotel was surrounded by, I think it was all sugar cane if I recall correctly. And there was this long road, of course it’s Hawaii, so there’s a mountains on this side and a beach on this side and just this amazing vista. But he’s driving back to the place that we were staying at and he sees one of the distance runners running the other direction running away from the hotel, and he’s just kind of trotting along and his name’s Brian. 

And so coach pulls up and he says, Brian, where are you going? And he says, I’m running down to this convenience store to get ice cream. And the coach says they have ice cream back at the hotel. There’s a refrigerator thing where you can buy it in the lobby. And Brian says, yeah, but they don’t have chocolate chip. And my coach told that at the end of year event, the reception where parents get together and talk about track and give people awards and all that, and I got a huge laugh from all the parents because the convenience store was a couple miles from the hotel and us track athletes. We looked around. I don’t get why that’s funny, and I get the joke now. It’s that wow, as an adult would you run two miles in order to get a thing of ice cream that is the flavor that you want? 

And most of the time, no you wouldn’t. But the thing was is when you’re running at that level, we were competing at a pretty intense level. I’ll say I wound up, I’ve talked about this, but I wound up breaking the school record in the hurdles and that record lasted 31 years. It just got broken this year about four months ago. So we were not dabbling in track. We were very, very intense about it, and as such, we had normalized doing hard things. There was such second nature that most of us didn’t get the joke when the coach told that story at the end of your reception. And the thing about it was our workouts were a mile warmup. Then you do some stretching and then you do a pretty intense workout of sprints and intervals and you’re dying at the end and then you do another mile cool down, you stretch and you leave. 

And that’s just what we did five days a week, sometimes six days a week. There were obviously days when I threw up once a week during the fall for a few months As you’re getting into shape, it’s just so intense and that was just what we did. We would groan when they would name a particularly hard workout, but we all showed up and we all did it, and the people that performed it was just expected that if we wanted to do great things, we had to do hard things and usually we had to do the hard things first. It was getting in shape and it was working on our technique and it was sometimes running ourselves to the point of throwing up, unfortunately, but in the end of the season when you’re trying to qualify for regionals and the state meet, you were thankful that you did the hard things in the early days, and there were some folks that came to the first month or two of track and it was hard and they said, you know what? 

This isn’t for me and that’s fine. It was a way of I guess weeding folks out and really only having those that cared enough to do the hard things that were really committed to the long-term vision because talk about delayed gratification, and I guess I should clarify, in high school it was only about, was it maybe five months? So it was probably from January to June you started working out and then you had the state meet in June in college was when there was fall workouts, and that went all the way through June, so it really was a full nine months or so of doing hard things, so to speak, and you kind of did it every day and got used to it. The reason I’m bringing this up, of course, in the context of startups is a lot of the founders that I see succeeding if they’re not relying on luck and they are the ones who are executing and building skills and putting in hard work, it’s just expected that you’re going to have to do some hard things. 

And sometimes that hard thing is digging into marketing approaches that don’t work right away or maybe that you’re like, I don’t really want to do that. Do I have to do SEO? I don’t really want to do the ground. I don’t want to do sales demos. I don’t want to focus on one product and push that boulder up the hill. I don’t want to try to run ads. That doesn’t sound interesting. The way my mind works is I really want to build a media company. Well, I just start a YouTube channel and be on Twitter and tweet about things and have that build my business. I don’t want to hire people. I don’t want to have to fire people. I don’t want to make the hard decision of having to focus on one thing. I don’t want to do b2b. That sounds boring. I want to build a two-sided marketplace. 

I’m not saying that’s not hard, that’s actually doing it on hard mode, but you get the idea. I get emails to this podcast about I have a good day job and I’m making good money, but I really want to be an entrepreneur, but I just have a tough time getting motivated. And I think to myself, then you don’t really want to be an entrepreneur and that’s okay. That’s okay. Just know that if you’re going to do this, you have to do hard things. I was in conversation with someone who had sold their company for nine figures, so that’s hundreds of millions of dollars. And one of the things that he does is talk to other founders who have exited for never have to Work again, money. I call it sunset Money. You can ride off into the sunset. Some people call it FU money, and that’s fine too. 

It’s all the same. And he said one of the big things he encounters, and this is similar when I have these conversations with folks, one of the hard things is if you sell your company for whatever that number is for you, maybe it’s 5 million for you, maybe it’s 10 million, maybe it’s 50 million. You sell your company, you’ve been grinding, you’ve been creating, you’ve been building, and you have all this money in the bank, and it’s really hard to figure out what to do next. That’s meaningful, but not so hard that you’ll just give up because when you have that much money in the bank, why do hard things? What’s the motivation anymore? So many of us had the motivation to build these companies of I want to build interesting things. I want freedom. I want to be in charge of my own time, and basically that means I have to get rich in order to do it. 

But that becomes a motivation for a lot of people. It’s not to get rich. It’s the freedom, right? It’s the ability to build and work on and do whatever you want for the rest of your life, and that is an amazing place to be in. Now the challenge is your motivation to stick through the hard times and to do really hard things like the mile warmup, the mile cool down, and the really hard workout in between or to grind for months and months on SEO or ads or focusing on a product, trying to find product-market fit, and staying up at night thinking, am I ever going to find product-market fit, dealing with an employee who doesn’t work out and you have to fire and rehire. There’s all these things that are difficult, that are challenging and finding that motivation, whether you have enough money to make to never work again, or whether you don’t and you just want to be an entrepreneur, but you don’t feel that drive enough to push you to want to do really hard things. 

It’s a challenge. And so I tell this story about Brian running two miles to a convenience store to grab chocolate chip ice cream. He did return with chocolate chip, by the way, and there were a couple people that wasn’t just Brian who wanted it. There were some parents or something that wanted chocolate chip, and when he went, he walked out in the lobby and they didn’t have it. He just took off. He didn’t even go back and ask him. He just left and ran a four mile round trip to get chocolate chip ice cream for these other people. So I hope that anecdote has you thinking about the hard things that perhaps should be normalized in your day today. My second topic for today is a fun fact. I heard the other day, and then I confirmed it with not only chat GPT, but with Google as well. 

And it’s about how a pack or a herd, technically speaking of bisons, if they see a blizzard coming or a storm, they will walk into the storm because they know that whatever direction the storm is headed, it will go by faster if they are moving into that storm. And think about that, there’s some type of really deep adaptation that has gone on there because I think for most of us, we don’t want to walk into the storm and most animals will run away from a storm or from danger or from something that is perceived as uncomfortable, but the bison knows that if they take this big challenge head on, it will be over faster. Hopefully. The parallel to running a startup is really obvious. What are the storms? What are the blizzards that are coming at you? The lack of product-market fit, the lack of growth, impending competitors that are going to eat your lunch. 

Ai, a rapidly changing landscape. Folks who can spin up a similar app to you in a week now because of copilot or cursor AI or all these coding tools, people building stuff with no code that is purpose built and perhaps solves a need better than your custom app that you spent years building can. So what do bison know that we don’t? Well, they know that if you ignore a threat or if you walk sideways or away from it, you’re just going to experience it longer. It doesn’t actually fix anything. And you as the startup founder or an aspiring startup founder, I think would be well-served to figure out what are the big things that make you uncomfortable, the things that stress you out, the things that keep you up at night. And instead of trying to ignore them, trying to run away from them, trying to hide from them, think about how can I attack this head on? 

Whether this is someone working for you who just isn’t quite working out and you let it go way too long. That’s a very common thing. The startup founders do. All of us do it at one point or another in our careers and all of us come to regret that decision of ignoring it is not a threat in this case, but I mean it’s a threat to our growth. It’s a threat to our business. It is just a hard thing that’s easy to ignore. Another hard thing is lack of growth, and your R is not going up into the right. Do you make excuses? Do you blame the internet? Do you say, oh, startup advice doesn’t work anymore? Well, in 2024, it doesn’t work the way it used. You used to just be able to do SEO content and AdWords and everything would just work out, and it was so easy, which in fact it wasn’t. 

But you convince yourself of this because you’re not having success, or is it hard and you need to figure out which direction to head and you need to persevere long enough and normalize doing hard things. Ooh, see the way I integrated those two but normalize running the four mile round trip to get the chocolate chip ice cream in order to face these things that are difficult. If you’re always running away or ignoring or making excuses or acting like these hard things don’t exist, you’re not going to find success. I can’t think. Now, maybe there’s an exception, but I can’t think of a single entrepreneur that I have worked with, advised, been around, invested in, and I’m invested now in, I think it’s 212 B2B, SaaS companies can’t think of a single one that has achieved success. And we can just say, what is that? I dunno. 

Seven figure and up a R seven figure eight, figure a RR. Can’t think of one that ignored these hard things that didn’t accept their current reality, even if that reality was not what they wanted to hear and didn’t make a game plan a, plan a, plan B, a plan C of how to deal with and address it. I’ve known founders, multiple founders that have received cease and desist letters. I know multiple that have been sued. I know many that have been threatened to be sued. I know several that have been hacked where their app has been hacked. There has been ransom situations where I’m going to release this on the dark web if you don’t pay us X amount of Bitcoin. I’ve seen embezzlement, I’ve seen employees rogue. The list goes on and on, and whether it’s any of those or whether it’s something as simple as, oh, hey, we’re not growing, and that’s the storm, that’s the coming storm is that if we don’t grow for too much longer, we’re done. 

We either have to lay everybody off or the app itself. We just need to shut down the company. That has to be the hard reality that you face on a day-to-day basis. And I am not trying to paint entrepreneurship as this terrible hard thing. You have to work 60 hour weeks all the time and be stressed. That’s not how it should be either. If it’s that hard, either you’re trying to build a billion dollar company or maybe your approach isn’t quite right, or frankly, maybe you’re running into some bad luck, but it doesn’t have to be hard all the time. I just want to level set for you listening that there will be ups and downs and when the ups are here, celebrate them. And when the downs are here and the difficult times are present for you, realize that that is part of this game. 

That is part of being an entrepreneur and learning and being willing to face those hard things head on is something that I wished I had learned sooner, and if only I had learned this tidy fact about bisons walking into storms years ago, perhaps I would’ve been better equipped. And that’s what I hope to convey to you here today. So I hope you continue your entrepreneurial journey a little better equipped to do so. My last topic for today is about first making it work, then making it right, then making it fast. And this is a quote or a paraphrase from the Comic Lab podcast that I have quoted in or paraphrased several times in the past. You can go check it out if you’re interested. But the co-hosts I find are very practical and pragmatic and the number of parallels between being an independent comic artist, which is essentially being an entrepreneur and making money from your art. 

Now it is B2C, so it doesn’t necessarily fit in the focus of this podcast, but a lot of what they talk about I find has parallels in the startup space and specifically in the bootstrapped and mostly bootstrapped SaaS space. So one of the hosts, Brad had this quote. He said, first, make it work, then make it right and then make it fast. And the context he was using was about art, was about drawing or writing frankly, anything that you would do to produce a comic strip or a comic book or a web comic and about how when you’re just starting out, just learning to draw or learning to write and be funny is hard. And so it might take you, it probably will take you years just to make it work, but you’re going to be really slow at it and it’s not going to be that good. 

So then the next step is you’re not that good at it, but make it good. That’s the making it right step. So I think it’s like make it work, then make it good and then make it fast. But he says make it right. And I can say that, look, it’s his phrase. He can name it whatever he wants. So first step is to make it work, then you make it right and then over repetition, you make it fast basically. And I actually like thoughts or frameworks or statements like this that make me think, oh yeah, that’s totally obvious, but I didn’t say it. I haven’t heard it phrased this way this succinctly before, but I think the parallels run deep. I think this podcast, if you go back and listen, the first 20 or 30 episodes, maybe 40 or 50, we’re just trying to make it work. 

And we did shipped every week. There were a couple months where we shipped every other week, but you get the idea over the 14 year lifespan of this podcast and the 742 episodes, the first 20 to 40 were making it work the next, I don’t know how many were making it right? And then eventually we got to the point and later me on my own got to the point where I can record these really fast. That took repetition. That didn’t happen in the first a hundred episodes. The fast part was probably in the second hundred or maybe the third a hundred, frankly, these solo episodes. I didn’t start doing these until several hundred in, and those were excruciating and painful at first, and then through repetition, I made them write and made them fast. Same thing. If you’re writing and giving conference talks, your first one’s not going to be that good. 

You got to make it right. And then over time you get better. To the point where I’ve given talks that I have literally built the slides four days in advance and run through the talk once, and then I get up on stage. And that’s just pure repetition because the first talk I gave, I was working on weeks and weeks in advance, and I was practicing over and over because I didn’t know how to do it well, and I didn’t know how to do it fast. It’s the same thing with sales demos. First time you do it, it’s not going to be very good. You’re going to be super nervous and you’re going to potentially over prepare, spend a lot of time on it, and then over time, over repetition, you make it so it’s good. The making it fast maybe doesn’t apply here, but I do think maybe making the deck for your sales demo applies, right? 

That you would get better a second time building a deck for it. Marketing approaches similar. First you just kind of stumble through and you don’t know what’s going to work, and eventually you make something work just enough that it keeps you alive for another month and then you start getting better at thinking strategically and about thinking like a marketer. And then eventually you get to the point where you can spin up new marketing approaches. I’ll say quickly, right? That’s the fast part. Now the analogy doesn’t necessarily hold up. It’s not a piece of art. And so thinking that you can spin up five or six marketing approaches just because you’re good at it isn’t reality in most situations. Most companies don’t have that many, but you get the idea. You do get better at moving fast and doing a lot of things. A r and I talk about the most successful founders across the tiny C portfolio of 192 companies are those founders that do a lot of things relatively quickly. 

They put a lot of things into the world, and they’re right enough of the time. And Ruben, the founder of Sewell, mentioned to me that he liked that analogy, but he felt like I was leaving something out. When I say that the founders who do a lot of things and are right enough of the time, and I think enough is 50, 60, 70%, it’s somewhere in there and there’s asymmetric upside when they are right? But Ruben was saying, yeah, but even those founders, one of ’em for sure, even those founders that do it, they’re not necessarily right immediately out of the gate when they try a new thing. Usually it’s off a bit. And every approach needs to be honed unless you get really lucky, you launch a new sales effort, a new marketing effort, a new landing page, a new feature, a new product. 

You hire someone new, there’s a certain level of refinement, maybe some experimentation, but of putting something into the wild and realizing, oh, that’s not quite right, and I need to tweak it according to my founder gut and according to the taste that I have in my mind of what a landing page should look like or what a feature launch should be or how a marketing approach should be executed, I’m going to take the signals that I’m getting back and there’s a feedback loop and I’m going to iterate, I’m going to tweak. And then eventually, you’re right enough of the time. So don’t think that right out of the gate, founders who are doing exceptionally well are just right all the time, but you do build your founder gut. I use this phrase all the time, and the editor for the SaaS Playbook was like, that’s not a real thing, and it has to be founder’s Gut, right? 

It’s a possessive that the founder possesses this gut instinct. And I was like, I guess, but almost it’s like capital F, capital G, it’s like founder gut. It’s a thing that I name of over time, you can develop this. Some people probably have it from the start. I think like Jason Cohen Heat and Shaw probably Dharmesh. There’s some people that I know David cancel that at least as I saw them going on their journey, they just seemed from the start to kind of know what they were doing and to generally work on the right things with asymmetric upside ship, a lot of things really smart people. I was not that I was stumbling around blindly for years and years in my twenties and early thirties, not really knowing what I should be working on. And my founder gut was not great. And the way that I developed it was through people giving me advice. 

People that were ahead of me, watching people who have really strong founder guts and seeing how they made decisions. It’s just a refinement and a learning and an iteration of myself, a constant search for self-improvement. And part of that I’ve talked about on the show in the past, which is knowing yourself not having blind spots. We all have weaknesses, but a blind spot is a weakness that we’re not aware of. And so even taking the personality tests, the Enneagram and the StrengthsFinder and the Kolby A and there’s a few others, do those unlock everything and all the magic to make you a high performer? No, but they give you one more data point, and if you can read through the descriptions and say, oh, yeah, the strength side of this certain attribute is that I really focus on things and I really focus and get it done. 

And the shadow side of that is I focus too long and I spend years working on stuff that isn’t working. And knowing that about yourself goes a long way towards helping you improve as a founder and improving your founder gut. Now back to first making it work, then making it right, and they’re making it fast. I do see people try to skip this and they see much like in the stair step method, I often say, Hey, if you see folks that are playing in the major leagues and you haven’t played T-ball yet, you don’t want to go try to play in the major leagues right away. You want to play T-ball and then little league and then junior high ball and high school ball, college ball, minor leagues, major leagues, right? There’s a bunch of steps along the way, and I see folks, I guess it’s on Twitter, I hear ’em on podcasts, whatever, who see an entrepreneur that is 5, 10, 15 years ahead of them or someone who has assets that they do not such as, well, you have half a million Twitter followers and I have 500, but I’m going to try the same approach because that surely that will work. 

It’s like trying to jump to the end without putting in all the time to first make it work, then make it right, and then make it fast. I mean, what’s interesting about this phrase is just how much it does align with the stair-step method. It hadn’t occurred to me until right now as I’m saying this, it’s crawl, walk, run. Don’t try to run from the start. Don’t try to play major league baseball from the start. Don’t try to quit your day job and have a burn down of all your money. I had six months to launch a standalone SaaS and get traction. I’ve never done this before. It’s like, well, hold on. How about you make it work by just launching anything? And whether that’s a plugin in an app marketplace or an ecosystem, whether it’s an ebook or a course or whatever, just build enough of an audience or learn to market well enough or build enough of a network that you just get something out there and then get better at it, right? 

That’s the make it right. And look, that might take a few years. This is why I say think in years, not months. As an entrepreneur, as a bootstrap founder, especially think in years, not months, don’t be in such a hurry to get to the end result because then you’re trying to jump to the make it fast. And that’s where this ridiculous idea that I should spray and pray one thing every week. I’m going to launch 50 apps this year and just see what sticks. I’m going to see what’s going to make it work that’s wanting to get to make it fast and take a shortcut to get there and not do the learning and not put in the hard work and not face the hardest things that are the blizzard that is marching toward you. And I think people that are trying to skip the line and get there are doing themselves a disservice and are much less likely to be able to repeat it again in the future, are much more likely to need to rely on luck and are much less likely to succeed in the longterm and to be able to do it again, even if they do. 

Now, am I saying you have to grind it out and put in years. It’s like you got to go through high school and then you got to go through university, and then you got to go through, get your master’s and then your PhD, and then you got to work 10 years before you have seniority. So that’s just what we all did. And so you got to put in 20 years. No, that’s not what I’m saying. Obviously the beauty of entrepreneurship and what we’re all doing is you don’t have to take the same path that anyone else did. But I do see early stage folks making the mistake of thinking that they can just jump to the make it fast. They can just jump to that end. But if you can’t make it work and make it right, it doesn’t matter if it’s fast because you’re shipping something crappy, and whether that thing that’s crappy is a product or ebook or whatever it is, if it doesn’t work and it’s not right, what’s the point of trying to make it fast? 

I gave a talk after I sold Drip, and it was called 11 Years to Overnight Success, and it measured the time from launching my first little micro product wound up doing a thousand, 2000, 3000 a month until Sunset Money, right until selling Drip and never having to work again. And the title was Tongue in Cheek, obviously 11 years to Overnight success because people think this stuff happens overnight and almost without exception, or maybe without exception, it doesn’t, doesn’t happen overnight, crawl, walk, run. You stair step your way up, you first make it work, then you make it right, and then you make it fast. Thanks so much for joining me this week and every week on the show. If you keep listening, I’ll keep recording. This is Rob Walling signing off from episode 742.

Rob Walling:
Welcome to another episode of Startups For, the Rest, Of Us. I’m your host, Rob Walling, and in this episode I sit down with Wes Bush. He’s one of the key proponents of the product led growth movement as the author of two books on the subject, product led growth, how to build a product that sells itself and the Product Led playbook, how to unlock Self-serve revenue, and dominate your market with a tiny team. I wanted to have Wes on the show today because I think there are a lot of misconceptions and a lot of myths around what product-led growth actually is, and I wanted to talk with Wes, obviously one of the foremost experts on this topic, to really try to peel away myth from fact and really get to the heart of product-led growth, why you might want to consider it and when it’s a good idea when it’s not. 

Before we dive into our conversation, MicroConf Mastermind matching happens three times a year and it’s happening right now, applications close on December 4th, so just a week or two after this episode goes live. Masterminds have been critical to my development and frankly, my longevity as an entrepreneur, and I’ve been a proponent of them for probably 12 or 13 years. You can go to startups For, the Rest Of Us dot com and search for startup mastermind and find the first time that I ever mentioned it on the show. And it’s a long time ago because I became a believer in meeting with like-minded founders over time, a small group of founders who really followed my journey, almost like honorary co-founders. So if you’ve been feeling alone or isolated or lost or you’re just not sure what to do next and you need some accountability and someone else to be in the trenches alongside you, head to microcomp.com/masterminds. You pay a one-time fee, and we will match you up with other like-minded founders. And with that, let’s dive into my conversation with Wes West Bush. Thanks so much for joining me on the show. Thanks  

Wes Bush:
For having me. I’m excited to be  

Rob Walling:
Here. I’m excited to talk about product led growth with you for a long time. Listeners of the show, they know I have a love hate relationship with the term product-led growth because I like shorthand terms, even product-market fit, I feel the same way. It’s like, oh, if I say that, and we kind of both know what that means, it can be thousands of words encapsulating that. The problem is when I say product-market fit, if there’s 10 of us in a room, there’s 10 different definitions of it. And I feel like product-led growth is a bit like that and sometimes misused, especially by developers who just want their product to sell itself. Do you find that in your role as, I mean you’re an ambassador, you’ve written three books on product-led growth. Do you find that as well?  

Wes Bush:
Oh, totally. And one of the most viral tweets that I got, a ton of retweets and stuff, I was like, product growth, this is just an effing free trial. It was like, oh, okay. There’s a lot of people that  

Rob Walling:
Think that.  

Wes Bush:
So it was interesting.  

Rob Walling:
So I want to start by letting people know, you’ve written three books on product-led growth, so you certainly, of all the guests I’ve had on this podcast, probably the person who knows the most about it and who has thought the most about it. You have the product-led playbook, you have product-led growth, that title and product led onboarding  

Wes Bush:
Ley. John did write that one. I just wrote the first chapter, but  

Rob Walling:
Oh, okay. Well, thanks for the clarification. Yeah, no worries. I’d love to start by let’s do the best job we can at really defining what product led growth is. So I’ll kick it to you, you say what you think it is, and then I’m going to say like, well, is this product leg growth? Just so we can kind of tease it apart because I have my own internal definition of what is, I’m not even sure it’s right. So talk us through PLG.  

Wes Bush:
Yeah, and I think where a lot of people get confused is thinking of one dimension of like, oh yeah, that’s product like growth, whereas it’s a multi-dimensional thing that impacts your entire business. So here’s a fun way of thinking about it, is product-led growth is when you use your product to acquire new customers, engage them, meaning getting them to value and also monetizing. And you could also take that to expanding customers as well, but it’s where you’re using your product throughout your entire go-to market motion. It’s not just the free trial for people to sign up for free, but it helps them get the value. It also upgrades them and you can use it for expansion as well. And so at the surface, that’s what it is in its simplest way, and you’re talking about different examples of it, what it looks like. I’ll use some non-software as a service examples like Cologne, perfume, I think those are great examples of PLG and the real world where it’s like, Hey, I can try it before I buy it. And that’s really, I think a core tenant of it. It’s got to have that experience where, okay, I tried it for free, I like  

Rob Walling:
It. Oh, I like that example of cologne. I’d never thought of it. To me, when I hear PLG, I’m just like SaaS, SaaS and software,  

Wes Bush:
Right? Yeah,  

Rob Walling:
Self-serve freemium. These things all come to mind, but that’s kind of cool to hear an example of a real world product. So now I want to ask you some questions and say, is this product led growth or is it not? So my last SaaS startup was called Drip. It’s still functioning here in town downtown Minneapolis, and we had a self-serve trial credit card upfront, and for now, we had no free plan. Later we did. So we’re going to get a lot of examples out of this, but no free plan. Put a credit card upfront. You get a trial for whatever it was, 14, 21 days inside the app, there was a bunch of onboarding stuff, there were videos and kind of like, Hey, do this next, and you got emails to come and engage and do this next. And then if you got fully set up, then you got to choose if you canceled your trial or if your credit card got charged at the end basically. I always thought of that as just, to me, I just say, well, that’s self-serve SaaS that it existed since Basecamp is self-serve SaaS, and I had hit tail in 20 10, 20 11, that was self-serve SaaS, and it all followed that model. But would you include that under the umbrella of PLG?  

Wes Bush:
Well, here’s a qualifying question. First, we’re users that were signing up able to get to value for free. They could, in drips case, send a lot of emails and really feel like, okay, I got the value from the product, could do something interesting in the product that I couldn’t do before.  

Rob Walling:
And that was included in the trial itself. It truly was a free trial. And yes, they could do everything in terms of uploading subscribers, sending emails, getting the value that the product offered.  

Wes Bush:
So that would be an example where it’s like, yes, I would consider that product led. Now I’m going to try and confuse everybody here for a second and give an example of a company that does have a free trial but is not product led because it’s not always the same case. So this company is called ZoomInfo. A lot of people know about them. You can sign up for the free trial and it’s actually more of a request, a free trial. And then you get to the, okay, you fill out your info and it’s like book a call. You got to go through this whole experience and everything from the second you fill out that form is like convert, let’s convert them and let’s get them on the phone and convert them. So there was no value exchange, there was no kind of try before I buy experience. 

So you can actually have a free experience, free trial, but if every bone in that company is soon as you sign up is like convert them, convert them, convert them, no, that’s still just using a different mousetrap At the end of the day, what the biggest changes between what I would classify as more of a sales led company versus a product led one really comes down to, if you think of oversimplify, a go-to market motion, there’s really three things that go on in any business. There’s acquisition, there’s monetization, you got to make customers, and then there’s the overall engagement delivering on the value. Now a traditional sales like company, it’s like you acquire them, then it kicks off the monetization side of things. Then it’s about engagement, delivering on the value. The big change in product-led growth and product-led companies is just that middle piece. It switches. So it goes from acquisition to engagements. You deliver value before you purchase, and then it’s monetization. And so whenever you’re thinking, is this a sales led or a product led company, just refer back to that because that is probably the easiest way to kind of see, oh, okay, is that truly your product led company or not?  

Rob Walling:
So it’s engage, monetize or swapped is what you’re saying?  

Wes Bush:
Exactly.  

Rob Walling:
That’s interesting. Okay, let me ask you this, then there’s a company called Spark Toro. Have you heard of it? Rand Fishkins company?  

Wes Bush:
Yeah, yeah, definitely.  

Rob Walling:
And I’m an investor there, friends with Rand, they have a try it free button on their website. When you click it, you do self sign up for an account, your username and password, or I think you can authentic through Google. And then what you do is you get a, it’s a really limited free plan. In essence, you get five searches a month, so very limited and I believe you only get the top three or four results or five results when there might be hundreds. And if you’re a paying customer, you can get all the data. And for folks who don’t know about Spark Toro, the H one is how do you get better ROI from content, SEO, social PR and performance marketing smart to is basically an audience research tool for marketers. So with that stage set of how I just described kind of this free, it’s even a stretch to say it’s a free mean plan, it is quite limited, but what is that? Is that product-led growth? Definitely not. They’re not doing sales. So does that by default mean their product led growth?  

Wes Bush:
Yeah, in theory, that’s the free motion they have that. I think that’s definitely in the right direction. The only thing where I would be like, okay, is that the right thing they’re giving away free is could someone sign up for that and feel like they genuinely got some insight that was really meaningful to them? Now, if they can check the box on that, it’s like, Hey, that’s a great free motion. And yeah, I would still classify that as product led, you’re giving away free, but what separates a great free model from one that’s just mediocre and not many people convert at the end of the day is it all comes down to what is the outcome of that free product? Does it have one very similar products that we’re working with? One of our clients, it’s for trade opportunities if for export import businesses, let’s say are trying to find the best baati rice exporter, and it’s like it shows the database, you know what? 

They only need to find one. They need to find one deal that’s really incredible. And what we decided to give away for free is like, hey, finding that person finding that is free now if you want to contact them, then you got to upgrade at that specific stage. Now it doesn’t seem like it’s a lot, but it’s enough. It’s enough for them to fill, they walk away from that experience saying, Hey, if I need to find another export import business, I know exactly where I got to go. And same thing with Spark Tora. It’s like as long as they find out of those top four or three options, something’s meaningful, then it’s enough. But that’s the tricky part too, because if you search and you waste those five searches on something, you don’t find anything useful, then people are like, this product sucks.  

Rob Walling:
And I kind of asked a question without asking a question with my last prompt, which is sales led is what maybe the Jason Lemkin playbook, I think of it where it’s just a lot of outbound and it’s just this, you build up this big sales force, the boiler room as they say, and you obviously have inbound, you try to do inbound, and anybody who comes inbound, it’s like do a demo, put ’em through the sales funnel versus product led. What you’re saying is, well, that’s more of the product provides the value. I feel like that’s a false dichotomy. I feel like there’s more nuance to this whole story than that. And in fact, coming back to Drip, we did both of those things. Now we did outbound, it was not a huge motion, but we had a ton of inbound. I’m a better marketer than a salesperson, let’s put it that way. 

So we had a ton of inbound just from all the stuff we were doing. And what we noticed was on the lower end, if someone’s going to pay us $50 a month or a hundred dollars a month, those our cheapest plans had to be product led. We weren’t going to do a demo, just the A CV. The LTV was not there for it. But we’d see someone come through and it’d be like, oh, this is someone, it’s a website that that if I said the name of you would know. And it’s like, well, I’m sure they have a million subscribers and they’re probably going to pay us $3,000 a month. So then we would reach out to them and we’re like, we need to get on the phone with you. We know that we can help close the deal. So I call that a dual funnel now where there’s lower end and the higher end and you handle ’em differently. So I guess were we sales led? Were we product led, or would you just say, well, you’re both,  

Wes Bush:
Yeah, that’s both hybrid and that’s great motion to have if you can do that. If you’re only product let’s say is like $10 per month, something like, it’s like, okay, it probably doesn’t make sense even if that company did sign up because there’s not that expansion opportunity where you can make it work. But no, I love those motions and I think that’s using the best of both worlds where it’s saying, Hey, if you’re a small company here, self-serve, do that. And if you’re a bigger company, hey, there’s a different approach. And we could actually maybe even position that instead of just like, Hey, you want to hop on a call with me? It’s like, Hey, I know you have a big list. How can we create email marketing strategy together that is going to be so much better than what you’re currently doing? And they’re like, man, this drip company’s really looking out for me outside of just looking for another place to send emails. They’re a value added partner here, absolutely like 3000 per month. That seems like a no brainer deal. To get this advice to  

Rob Walling:
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So let’s talk a little bit about product-led growth. And I think a lot of people think freemium, you have to have freemium and you’re basically like, no, a free trial, as long as you get value out of the product and that’s engaging in monetizing, that is a qualifier. You can still be included in the PLG Hall of Fame if we’re a paid or a free trial that makes, oh no, it’s the monetization has to be after. So it can’t be a paid trial,  

Wes Bush:
It  

Rob Walling:
Has to be  

Wes Bush:
Free. So the free model you choose actually doesn’t matter. So if you look at billion dollar plus product companies, you’ll find every company with whether it’s a free trial, a Freeman model usage-based trial, they’re all out there. What does matter though is deciding what is the main outcome of your free model. So what could you actually do when you sign up for that free product? And is it actually something that feels like it’s tangible value for that user? A lot of times I’ll send it for a free trial as an example, and you click around and you do a couple things. You’re like, Whoopi, I can’t do anything I couldn’t do before. There is no transformation. And the best product companies, they all have somewhat of a transformation where it’s like, Hey, before chat GBT and after chat GBT, it’s like it is pretty clear there was a difference there in productivity and all those other things. So you got to have that. You got to allow your product to shine in that free experience. And so I could go on a whole big tangent, Rob, go through how do you actually decide what’s to giveaway for free? But I just wanted to point that out that the model doesn’t matter as much as people think it is, it’s what that outcome is. And deciding what that is is really the tricky part.  

Rob Walling:
It’s interesting because with Bootstrappers, which the majority of this audience is folks who are bootstrapping are mostly bootstrapping, frankly. I mean there’s 20 or 30% who want to raise funding or have raised some type of funding, but it is just the non venture track. SaaS founders is kind of the listeners of this audience. We’ve just always done product led. That’s just what we did from the start. Because I wasn’t good at sales demos, I wasn’t going to do a bunch of outbound, my SaaS 2009, 2010, 11, it was marketing. And since I was charging early SaaS companies, I had with 10, 20, 40 a month, so really low end and then 50, a hundred, 200 with Drip. I couldn’t afford to do anything but build onboarding into the app because I had to operate at a scale that it just required that and I wasn’t going to be able to manually onboard. So I acquired through SEO content, a bunch of other demand gen, and then I engaged in the product because I was a developer. And that’s the only way to automate it to the point where I could have 500 or a thousand customers in order to get to tens of thousands of dollars a month in MRR and then of course monetization. It was always just a free trial to monetize. So it really sounds like the default for most bootstrappers is probably going to be product led. Is that accurate?  

Wes Bush:
So I think the mindset of them wanting to go this direction is, but then there’s very few folks where that is like, Hey, this is what I want to do, and I’m actually seeing really good success with it because I think folks like yourself where you have just naturally done it is actually really rare. There’s like for every one of you, there’s probably 10 others that are like, yeah, I want that too. Yet when I try and do the product led thing, I suck at it or it just doesn’t work out the way I thought it was. The free to paid conversion rates really bad and because users can’t get the value, they just don’t upgrade. So there’s a host of other reasons why it usually doesn’t work. But yeah, I’d say generally speaking, they do want that specific direction because they see that is the most efficient way to scale this business without adding people and more cost to the equation.  

Rob Walling:
And I think one of the annoying things for me with PLG is that people have misused it, and I see makers and developers being like, it means I don’t have to market because the product just sells itself. And it’s like, that’s not my, I don’t think any product really sells itself. I mean, again, it sounds like I’ve been running all my SaaS was PLG, and yet it never sold itself. I marketed the shit out of that stuff. I drove a lot of traffic, I did a lot of split testing, a lot of conversion optimization. I optimized the hell out of the funnels, the onboard, all of that was a massive thing before growth hacking was a thing. I was doing all of it. It was like, well, I know I want these numbers to go up. I know I want trial to pay to go up. How do I do that? Well, I got to get more people onboarded. How do I do that? Well, I need more people to install the JavaScript snippet on my thing, so how do I do that? And I, it was just a very logical flow. But do you feel, is it just me or do you feel like some devs, maybe especially builder types, maybe misuse the term?  

Wes Bush:
Oh yeah. And I think the biggest reeducation a lot of times do it product-led is just the fact that it’s like, Hey, you still have to market this. You still have to sell it and have really good understanding of what that looks like. There is very few companies I’ve interviewed hundreds of product-led founders where I’m like one out of maybe 300 has a situation where their product does market itself really, really well. But that is because they were super intentional about how that product was going to interact with other people. Mixmax is perfect example. When I was interviewing the CO Olaf, he was like, you know what? We have a $0 cost per acquisition cost. I was like, this is pretty fantastic. But it’s like you send an email powered by mix. I was like, oh, you got this beautiful growth lever, external virality. How many companies have that? Most companies just have internal virality where it’s like, Hey, you share this with your other employees and other users. That’s not going to get you that crazy marketing growth and a user signups that you want. But every once in a while you do find a company where it’s like, that really worked for them and you just hope that that might be your company.  

Rob Walling:
But as you’re saying, it’s one out of hundreds. Slack was used often as an early example, PLG. Would you say they’re similar because it did feel like there’s a viral loop in Slack that kind of became associated with product-led growth means that you infiltrate an org and then they invite a bunch of people and there’s virality and it doesn’t sound like that’s what we’re talking about. It sounds like they had that extra bonus of being one out of a few hundred where it could kind of market itself.  

Wes Bush:
Yeah. Well, slack had really fantastic internal virality. You just think of the natural side of like, okay, Rob’s not on this installation. Let’s add Rob. And it’s like, sure, he is on our team, so why not? And it just naturally gravitates towards that. But since it was such a good product and did it so much better than email in a lot of ways, then it just naturally grew out from that, from word of mouth. But they did invest. If you still look at their p and l, majority of their expenses are still going towards marketing and sales, which is fascinating to see that. And maybe that shouldn’t be the case right now since their acquisition and now their product has just kind of stayed stagnant. But it’s worth considering, yes, invest in marketing and sales. It does not mean being a product of business. You don’t have to do that.  

Rob Walling:
I think the probably the biggest point I want to drive home today for people listening is I think there’s a lot of perhaps misunderstanding or miscommunication around it. So then it begs the question, what are the big benefits of product led growth as opposed to sales led? The big benefits that you see,  

Wes Bush:
It really just comes down to do you want to have a leveraged business where it’s the asset you’re building is the product As you scale up, you get more and more efficient, you get more profits, can afford to have a higher revenue per employee, all that fun stuff. Or do you want the people to be the machine in the business? And so many folks, it’s like, actually, I want more leverage in the business. And so that’s the biggest thing. It just comes down to leverage at the end of the day.  

Rob Walling:
And you mentioned to me offline before we started that you actually have something you’d like to give to the listeners. What do you have?  

Wes Bush:
Yeah, so I just wrote the product-led playbook, which at the very beginning of this book, I’m like, Hey, you know what? This is not the book for you. If you don’t know if product-led growth is right for you. That’s the first one I wrote. Product-led growth. This one is literally just here’s how you actually do it. It goes through nine core pieces that you got to implement inside your business, like onboarding pricing. It just gives you the exact frameworks for how to do it and the templates. So it’s all free for you product led gift.com, and you can just get that for free. And that’s the entire book we held. Nothing back there.  

Rob Walling:
Awesome. Well thanks for that. I hope folks check it out. So I have one or two questions for you before we wrap up. And I think I want to frame, because I’m looking at an outline of the book, I have a table of contest and stuff in chapter six, how to decide what to give away for free versus what to monetize. It’s such a good conversation. And frankly, this is a common one I have with my investments. I’m invested in 200 and I think it’s 212 SaaS companies through TinySeed and then individually. And so I see the gamut, freemium or not of free trial, of not of sales led, product led, like the whole deal. And frequently I’m pulled into conversations. A lot of it’s pricing strategy and then it’s currently what we have, what should we, and I’m always like, I have my own kind of mental pattern matching framework, but I’ve never written it. I don’t even know if I could put it into words. So I’m curious. I know you can’t read the whole chapter six, but what’s the base framework there?  

Wes Bush:
Yeah, I think this would be more fun too, if you tell me about a company that really well that they were struggling with this, and we can workshop and as people listen, this will be like five minutes and we could go through that framework.  

Rob Walling:
Cool. So is this a free trial or is it freemium in this example?  

Wes Bush:
No, it could be anything. You pick the company, I’ll use the framework and then people will kind of learn through that.  

Rob Walling:
Alright, so let’s talk about frequent podcast guest, Derek Rimer. He runs a company called Savvy Cal. They are a competitor to Calendly and they have a free trial or it’s a 30 day money back guarantee. Let’s pretend they had a 30 day free trial because they’re PLG, but they do have a money back guarantee. So that’s in essence what they’re trying to do. They do not have a freemium, a free forever  

Wes Bush:
Plan. So thanks for that. I got their website pulled up and now who is their ideal user? The person they feel like, Hey, we got to just target this person. They’re the best people.  

Rob Walling:
So they actually have a couple, my understanding, or there were early adopters that were listeners to this podcast, that type bootstrappers and founders of Bootstrap companies. I think they made a shift as the audience grew or as their customer base grew and they started getting calendar power users, which I think are a lot more salespeople.  

Wes Bush:
So first off, this is why it’s so hard, and this is for everybody listening. If you don’t know without a hundred percent confidence who your ideal user is, and I’m on the website too, it’s not just you, Rob, it’s not clear who is this for? I don’t know. Because in the world of calendar booking systems, it’s commoditized right now. There’s tidy Cal if I want to pay 49 bucks once. Sure. And there’s a ton of different options out there and book like a boss, they have a very specific persona on service professionals and stuff. So that would be the first kind of task I’d be like, okay, get really clear. Let’s go with a sales person though, because that’s more fun. And so let’s say it’s salespeople now, what is ultimate success for that sales person? We got to get super clear on that. What would you say that looks like, even if we’re just making it up on the spot a bit  

Rob Walling:
Ultimate success, that it’s a complete super seamless booking experience for their prospects.  

Wes Bush:
And now if we think about this space, unless you’ve been living under a rock, you’ve probably heard of Calendly. So what is the unique sauce that they might bring to the table that’s like, Hey, this is unique, differentiated for people that are sales reps that are trying to just book easier?  

Rob Walling:
Yeah, it’s not on the website now, but the early positioning of avial was most booking links. There’s a power differential and it can be offensive to send your booking link because it’s like, oh, now you put a bunch of work on my shoulder,  

Wes Bush:
Right?  

Rob Walling:
Yep. Oh really? Now I got to click around, blah, blah, blah. And that was Avi Cal’s early positioning was, so I’m going to go with that. But the differentiated between them and Calendly is the booking experience itself is very much does everything you can do with amazing UX to remove that feeling.  

Wes Bush:
Okay, so let’s say for the salesperson, we have, I’m pulling up a stat out of thin air here, but it’s 30% more meetings booked with your ideal prospects just because the experience is better and everything else. So that’s success. We’re trying to gear people towards that. Now, if we think about making this a game, this is where we get to the model part. Let’s divide this up into three levels. There’s your beginner level, which is, think about it as the newbie. They sign up, they’re like, oh yeah, let’s go through this, see what it’s all about. Then there’s your intermediate level. This is your first paid pro plan, and there’s the events level, which is your most expensive stuff. So for that initial beginner one, what might that beginner outcome be? Is it enough for it to just be, Hey, book one meeting with the prospect? Is it five meetings, 10 meetings? What do you think that might be for them?  

Rob Walling:
Probably one. I think it’s just that initial meeting.  

Wes Bush:
So it could literally just be one meeting. Now if they do a test or something like that, that might be a bit tricky where it’s like, okay, they did the test meeting on their own.  

Rob Walling:
Oh, I see. Oh, I was thinking one meeting with each prospect. You’re just saying, yeah, the absolute value. At what point would they, huh, that’s interesting. Let’s say they booked five meetings, five prospects book meetings or five book meetings. Overall, you can do that with any, there’s no differentiation. You can do that with any calendar software. So it would almost to me be like, the moment that someone complimented me and said, holy, that was a really great booking. That would be the moment where I’d be like, oh, someone noticed that it was different. I dunno if that can be a qualifying event or not. But  

Wes Bush:
Yeah, and this is the tricky part, right? Because it’s the special secret sauce. Whatever makes your product shine needs to come out in that free version. And if it’s just meat game one meeting booked, so what? It doesn’t pass the hurdle. And so this is one of the challenges when you’re thinking about what to give away for free if you’re in a very saturated space with a lot of competitors that already have really good free motions, and so you have to be creative. What is that new experience? And so would, like you said, it has to go back to did they, maybe it’s a customer or somebody that booked that meeting, have that experience where they said, wow, this is fantastic. Could we track it? I would start going down that rabbit hole and say, okay, it’s in this direction. We don’t know what exactly. 

We got to validate what that looks like, but it’s something when they have this experience, they book 30% more meetings that they can feel the tangible difference of. When I was using Calendly, I was getting blocked. A lot of times people were in booking meetings, they felt bad about it. Whereas with Savvy Cal, now I have a story, and that story is now actually going to be in their head, the user’s head, and they’re going to tell themselves that story when they’re like, this is why I’m buying Savvy Cal today. Because it makes so much more sense than the other alternatives. They just don’t get me like that. But if you start off with that vague ideal user, it’s so much harder because everything that you give away for free should be tied back to who is that ideal user? What is that ultimate success? And that’s how you build an intentional free model, not just give away random,  

Rob Walling:
Right, right. Just pick it off a dartboard. That’s cool. And my apologies to Derek Reimer, who certainly is hearing this and absolutely cringing at all my answers. How when you’re the founder of the company, he knows all the answers to these, and I’m kind of like, I’m going to make this one up. I’m not sure if it’s exactly right. So no, that was super cool, man. Thanks for leaning into the thought experiment there. If folks want to check out the book, obviously product led gift.com, or they can head to product led.com/playbook or frankly on Amazon, though your book is available in all the formats, folks would want to find it. Wes Bush, thanks so much for joining me on the show today.  

Wes Bush:
Thanks for having me.  

Rob Walling:
If folks want to keep up with you on X, Twitter, u are, Wesco bush and product led.com, if they want to check out all the stuff you’re up to. Thanks again, man.  

Wes Bush:
This is fun.  

Rob Walling:
Thanks again to Wes for joining me on the show today, and thank you for listening this week and every week. This is Rob Walling signing off from episode 741.

Rob Walling:
Welcome to Startup For, the Rest Of Us. I’m your host, Rob Walling, and in this episode I sit down with Dr. Sherry Walling to talk about our new book Exit Strategy, the Entrepreneur’s Guide to Selling Your Business Without Regret. The Kickstarter for this book launches today. If you want to back it or you’re interested in checking out the tears and seeing all the amazing copy that Leanna Pat wrote for us, head to exit strategy book.com. I hope you’ll consider backing this book. I talk about it in the conversation, but I’m really proud of the end product of what we put together, and we put a ton of time into it. We interviewed a lot of entrepreneurs across different business types. It’s not just about selling SaaS, it’s about selling for the most part, any kind of business. And I’m really excited to get this into the hands of folks like yourself, entrepreneurs who may be thinking about selling, who may be in the midst of selling or who have sold and are trying to think about what’s next. Or even if you are not thinking about selling today, having this knowledge in your head as you build your business can only help you. So exit strategy book.com, it’d be amazing if you decide to back the Kickstarter. And with that, let’s dive into our conversation, doctor, Dr. Sherry Walling. Thanks so much for joining me on the show.  

Dr. Sherry Walling:
My pleasure.  

Rob Walling:
So we wrote a book, another book, this one’s called Exit Strategy, and I think a couple clarifications right off the top. It’s not just about selling SaaS, it’s about selling any type of company. We interviewed folks who sold agencies.  

Dr. Sherry Walling:
Yeah, professional service companies, a sort of chain of gyms, brick and mortar businesses. This book was really born out of my conversations with clients over the years who said things like, this is the hardest thing that’s ever happened to me, or I feel like I’m going through a divorce. And that’s not limited to SaaS. The challenge of this process is pretty universal for entrepreneurs going through it.  

Rob Walling:
And since the book focuses so much on the mental, the emotional, the psychological, the without regret part of before selling, thinking through should I sell, what’s it going to look like during selling? Oh my gosh, this is a pressure cooker, as you said, it’s the hardest thing I’ve ever done. And then the after recovering working for the acquirer, what to do next. Those things apply broadly across pretty much any type of business that is not just a, if you have look, have a little 10 K side project or some tiny little thing. Is it this agonizing? No, but this is about having a bigger exit and maybe having a team and that kind of stuff. And that applies to a lot of different types of businesses.  

Dr. Sherry Walling:
It’s about the story of building a business that becomes very valuable and sellable. People offload apps here and there or do things on a pretty small level, but this is the story about when you build something that is part of you and you put all of the blood, sweat, and tears into making something that’s very valuable, and then what it feels like to go through the process of selling it, of releasing it, putting your life together afterward.  

Rob Walling:
And there were a lot of really good books about selling your company. John Warlow has one art of selling your company to Andrews wrote before the exit Bo Burham wrote Finish Big. So I guess what’s our unique take? It’s two part question. Why did we decide to write this in the first place? And then what is our unique take that you think we bring to the topic?  

Dr. Sherry Walling:
I mean, I think the pairing of you as a serial entrepreneur and me as a clinical psychologist is really unique. I think there’s a lot of nuance and mental sort of analysis in this book that is different, or at least we are adding something pretty significant to the conversation when we think about the kinds of processes that people are going through when they’re going through a major transition in the middle of their professional lives. You’ve also been on the front row of hundreds of exits at this point in your work in TinySeed and through your connections with MicroConf. And so I think the number of reps that you and I have done together from very different perspectives is unique and really shapes what we’re offering in this book.  

Rob Walling:
And and I, it felt like we were having similar conversations over and over where you were like, Hey, one of my clients is thinking about selling or going through the sale process or has gone through the sales process and this is happening. And I’m like, well, didn’t that happen to someone else? Or that did happen to a friend of mine that I know through MicroConf. And it was like we would get asked questions of like, well, what books should I read or what resources are there around this topic? And it kept being like, well, obviously there’s these good books, but they don’t have maybe the very specific opinions that you and I have about how to try to do this well from a mental health perspective and realistically without Regret is in the subtitle for a reason.  

Dr. Sherry Walling:
I think what’s also interesting is that not only have we been in this sort of consulting seat in las, but we’ve been through an exit. You’ve been through it directly with Drip, and I’ve been through it as your partner, as your significant other. And I think that’s a piece that is often overlooked in business books is the relational impact of some of these transitions, not just on the founder, not just on the founder and their team, but on their family. And this book isn’t a heavy, heavy focus on that, but it is woven through in its, I think really shaped by our experience of having done the reps ourselves and then done them on behalf of other people.  

Rob Walling:
Yeah, there’s definitely a running thread through this book of A, how difficult this process actually is, and B, how much of a toll it takes on not only the founder, the entrepreneur, but on the people around them, their family, significant other, and so on,  

Dr. Sherry Walling:
And that it doesn’t have to be that way. So the default setting is this is hard and can be surprisingly destructive, but it does not have to be that way. So I think that’s the point of the book is to help offer the ability for people to open their eyes, look to see what’s happening, do some self-assessment, and then have some tools to help make more aware and more intentional choices about how they go through this process.  

Rob Walling:
And if someone’s starting a business today and they’re not going to sell it here in the next 12, 18, 24 months, I still feel like there’s value in experiencing this journey alongside the entrepreneurs that we interviewed for the book. What did we enter? 15 people, 20 people. I mean, we did a lot of, it wasn’t just out of in my head. I mean, we did a ton of legwork to pull it in, and there’s a lot of stories, a lot of quotes.  

Dr. Sherry Walling:
I think this book is actually about how to have a healthy relationship with your business, and that’s where it’s relevant to anyone at any phase of their entrepreneurial journey. I think it would be a super great book to read at the beginning because it talks about this balance between going all in and being very careful and very attentive to what the business needs from you and how to protect it well, and how to think about your team and also on the other end of the spectrum, this de-identification between your selfhood and the business that you’re running. And if you can strike that balance well early in your business, I think you are just set up for success in a lot of ways, not just in your exit, but in your mental wellbeing and balance throughout the course of the journey.  

Rob Walling:
And the book’s not out yet. And the reason we’re talking about it today is the day this episode goes live, our Kickstarter for this book goes live. And so folks can head to exit strategy book.com and there’ll be a link there where they can go straight to the Kickstarter page and they can back the book. We’re going to have it in three formats. We’re going to have a hardcover run like I did with SaaS Playbook where we have an offset printer. It’s just amazing. It’s like the same printers who print for any big publisher. And so the quality of the book is just really outstanding.  

Dr. Sherry Walling:
Do you have it there with you? Yeah, I was like, I should have it in my, this is  

Rob Walling:
A digital, I have a digital copy of it that is a print on demand version, but it’s so neat to finally have it here in my hands. And it’s a meaty book. It’s a couple hundred pages, right? 250 pages or so. But with the Kickstarter, we’re going to have an audio version that you and I are going to read together. Isn’t that  

Dr. Sherry Walling:
Sweet? It’s going to be adorable.  

Rob Walling:
It’s going to be so adorable.  

Dr. Sherry Walling:
I’m sure we won’t have any arguments about it.  

Rob Walling:
Nope. During I’m going to leave you, Josh, please edit a lot of any arguments out, but I do like to riff on the audiobook. We haven’t recorded it yet, but that’s something I’m looking forward to doing with you is kind of riffing on different things. And then of course we have an electronic, like a PDF epub version, but in addition to that, we’re offering things that we’ve never offered before, right?  

Dr. Sherry Walling:
All kinds of opportunities to hang out with us either in some q and a sessions where you can come and ask questions about your business, your exit, things that you’re thinking about to one or both of us. I think we have an option where both of us are involved all the way to the opportunity to come to beautiful Minneapolis in the summer and do a founder retreat with the two of us together. So the dates and all the details about that are on the site, but I am personally really excited about doing it that way and the kinds of interactions that it allows us to have with people that we might not necessarily bump up against in our day-to-day lives.  

Rob Walling:
Yeah, I would agree. At one point on this very podcast, it was probably 2021, I did a call for anyone who is in the middle of an exit or really on the cusp of an exit. If you’re thinking about selling, just email me and I will send you a 20 minute zoom link and I’ll zoom with any and everyone who’s going to do it. And part of that was I wanted to talk to more founders who were doing it. But the other thing is I said, this is one of the most important moments slash transactions of your life. And I talked to so many people who were like, I’m going to sell this. I started this kind of listening to the podcast and thought it’d be a little side project, and I got an offer for $9 million, and I was just like, what? And so I had these great conversations and part of those anonymized and everything going to the knowledge bank of writing this book, but I realized through those conversations even more the need for this. You and I’ve been talking about writing this book for three, four years at this point, and it took us, what about a year and a half, I guess, to get it all put together?  

Dr. Sherry Walling:
Yeah, it was such a fun process. There’s obviously lots of different ways to write books, but because we spend so much time talking to each other, podcasting and things like that, I really enjoy the process of having a really detailed outline and then going chapter by chapter and basically recording audio of it and transcribing that and then turning that into the written word. So I think it’s a fun way to collaborate together. And so there really is a mixture of both of our voices in really every chapter, even though some chapters are more based on my expertise and others are based more on your expertise, there’s still this weighing in and question asking of the other person, which I think helps it to be a much better product because you have thoughtful questions that are guiding the development of content.  

Rob Walling:
Yeah, I’m super, super proud of this book. I think it turned out really well, potentially, I hate to say it, but almost better than I could have expected when we started, which is how I like  

Dr. Sherry Walling:
Wow, look at you in the low expectations.  

Rob Walling:
I know, but I like having, I don’t know. I like it when it’s an end product and it’s like, yeah, I know this is dialed in. Something that I really like about the book, as I said earlier, there’s the before, the during and the after your exit. Those are kind of the three sections we have. And one part of the before chapter two, when is it time to go? And we look at external and internal cues for thinking about when you may want to exit. And I remember putting this chapter together, and one of the things that is interesting is that you and I have seen so many people sell that these things just kind of rolled. It was like, let’s brainstorm. Why do people sell? Boom, boom, boom, boom, and then run this list by other people I know who’ve sold. Are we missing any of these? So I feel just really good about the list we put together. Some of the external cues we mentioned are, you’ve built something amazing, the business needs more capital, you’re no longer the best person to run the business. The competitive landscape shifts a change in life status, and another opportunity arises just to give folks an idea of the kind of, and then we dive obviously deep into each of those and how those might come about and how to think about them if you’re in that situation.  

Dr. Sherry Walling:
And also assessing what are helpful motivations to sell and where are, so we talk about some of the internal cues like existential restlessness or energy levels, some even burnout, and when maybe those things lead you to want to sell because you want out, but they’re not always the best for you in the long run or the best for the business. And so thinking through just how to be an observation, an observer of your own mental internal process, and then what to do if you maybe want out, but don’t necessarily, it doesn’t make sense to sell right now. So we sort of dive into some of those options.  

Rob Walling:
And in typical Dr. Walling fashion, this is something I’ve never done in my books. We have making it real at the end of each chapter where it’s like, look, I just told you a bunch of really interesting things and now there are questions to think about and to journal and to take action on. So  

Dr. Sherry Walling:
In my last book Testing two worlds, I worked at the traditional publisher and they really pushed me on this. They were like, your stories are great. Thank you for the wisdom, but what do we do about it? And I, frankly, the challenge of helping people really apply it to their specific situation. So it’s all fine and good to absorb content, but if you can’t do anything with it, then it’s really not in your best highest service. So we’ve worked pretty hard on those sections to give you at least some journaling prompts and thoughtful questions that will help you to go deeper with some of the content that we’ve presented.  

Rob Walling:
And throughout the book, we try to set expectations of what an exit might look like. And I find that we were repeated over and over so much that eventually we had to take it out at a certain point of we just can’t keep saying this, but this is really hard. This is going to be really hard. Isn’t this really hard? That really hard? That felt like a message of the book. Why do you think that we have to say that so often?  

Dr. Sherry Walling:
It’s such a dream outcome. I think the stories that persist on social media or Twitter of the founder who sells for a huge bucket of money and rides off into the sunset or starts a farm in Austin, but it has this glow to it, and I just think that it is kind of giving birth. It has a great outcome. Babies are great, but it’s a grizzly bloody messy process. And because we’ve so glorified the end result, I don’t know that we collectively as an entrepreneurial community have told the truth about the process.  

Rob Walling:
And I think, I know for me, a chunk of the entrepreneurs that I talk to, the founders I talk to who are about exit, I’ll tell them it’s going to be really hard. And I’ve had people tell me, yeah, not for me. It’s not going to be hard for me and then come out together.  

Dr. Sherry Walling:
I got it. I’m not attached to my business. I’m rational. I’m objective.  

Rob Walling:
This won’t be hard.  

Dr. Sherry Walling:
I’m not that worried about it.  

Rob Walling:
I’m so prepared. And then come out the other side like, oh my gosh, you were right. And it’s like, I know it really is as hard.  

Dr. Sherry Walling:
It always, it starts relatively simply. I mean, the wonderful story is somebody gets an LOI and you agree quickly on the terms and it just feels like it’s going to be smooth sailing. But inevitably there’s some series of disruptions in the deal that require sleeveless nights and long conversations with lawyers. And it’s just the way it goes  

Rob Walling:
Inevitably is pretty much my experience. And the interesting thing is as entrepreneurs, we do hard things and we think as you said, that it’s like we can logic our way out of it or that we can just, we’ve done hard things in the past and I know that I can do it, but you get in this position where it’s like, all right, I’ve signed this letter of intent for $10 million and we’re going to close in 45 days, 45 days. I could do anything for 45 days. And then suddenly you find that you’re like, whoa, there is a lot of uncertainty here. And whoa, there are a lot of people that are kind of pissing me off here with the pushback on the thing and asking for the stuff. And you start to get in your own head. People start sleeping. There are entrepreneurs who you can’t sleep so stressed about it. And then you get towards the end and everything’s up in the air still.  

Dr. Sherry Walling:
And then it’s not 45 days, it’s 50 days, it’s 60 days. It’s the lawyers on vacation. Yeah.  

Rob Walling:
And so that is something we talk about. We have, I mean obviously there’s what, 14 chapters in the book and only two of them are really about deal structure and deal points because again, there are really good books like the Art of Selling Your Company that cover that type of stuff. So the vast majority of the book is thinking through whether to do it and how to do it well, and then how to be on the other side and ask what’s next. But I really like in chapter seven, it’s called collateral Damage, minimizing negative Impact. And we talk about minimizing negative impact to your mental health, your physical health, your family, your team, your company, and the deal itself. And then we have specific strategies for that. It’s learn how to time travel, take on an exit project, go on that vacation, let your partner in on your emotional state and other things. A lot of those came from you. I mean, I was pulling out the, here’s all the collateral damage it can do, but really the strategies for how to minimize those or how to stay healthy, a lot of that comes in your voice, a lot of your work.  

Dr. Sherry Walling:
It really is a challenge to construct some internal buffers around your own anxiety, especially for entrepreneurs who have often used their anxiety or their agitation as fuel to get things done. But in this process, you can only get done what is on your to-do list in that moment. And then you are waiting on all of these other people, on the buyer, on the broker, on the whoever else. And so it’s a really abrupt, difficult lesson in holding agitation and anxiety when there’s nothing really effective to be done with it because there are things that are happening or that you have to wait for that you can’t control. And so a lot of these strategies are around what to do with that energy, frankly, how to not let it eat you alive and not let it spin out of control in a way that hurts the people around you and leaves you trying to push the deal forward or being thoughtless or reactive because you are uncomfortable and agitated.  

Rob Walling:
I like that you bring up that point of there are things outside of your control that you just can’t do anything about. Because again, as entrepreneurs, as founders, we start companies, some of us because we want to control everything. And suddenly you’re in the middle of a process where it’s like some clown shoes, lawyer on the other end, as you said, is on vacation or is taken four days to turn things around and you’re like, dude, this is $10 million. This is the biggest thing of my life. This is my life. But it’s just another day for them. It’s just another deal.  

Dr. Sherry Walling:
Just another email.  

Rob Walling:
And we talked through in chapter 10, we have the 3:00 AM what ifs. And all of these quotes are things that you and I have either heard from entrepreneurs or we heard in the interviews as we talked to entrepreneurs, things like, what if my team falls apart? What if the deal falls apart? What if I’m not up for this? What if this deal is my only chance? What if I take a bad deal? And there are more, there are a lot of 3:00 AM what ifs. Another thing that I don’t think is talked about enough is life after the exit. We have a chapter called Purgatory that is sad. It’s about working for the acquirer and reporting to a boss. You lose control of your team, of your company, but there are also a upsides to it as well. And that was something that I am really glad we covered.  

Dr. Sherry Walling:
I think this question of life after the exit is maybe some of the content that I’m personally most proud of that feels like a real contribution to this conversation around exits that I just haven’t seen dealt with as thoughtfully and as carefully as we’ve dealt with it. And I think coming from my life as a psychologist, there is this deep appreciation for what it means to be going through a really significant life-changing developmental disruption at a time when your peers aren’t going through that exits are such extraordinary events, they’re just not commonly occurring. And so it’s like getting divorced or sending a kid to college or watching your parents pass away. It’s this major reworking of your identity and what you do during the day and what matters to you. But you’re not doing that along with your peer group. You and I know lots of people whose kids are going to college because that’s the age group that we’re in. And so this idea of going through a major developmental transition alone is pretty unusual and kind of extraordinary in the human experience. And so I think giving people some grounding in that, some understanding and some perspective about why this reworking of your entire life midstream is so challenging and then what to do about it, how to avoid the isolation and how to avoid the kind of spin out that can happen when people lose perspective about just how significant this transition is.  

Rob Walling:
Yeah, I like that you call that out. A lot of people have kids who go to college. A lot of people have a parent who passes away. A lot of people get married, get divorced, have children, whatever. There’s a lot of events that completely can turn your life upside down. And so few people sell a company and so few people, I mean almost no one else is selling a company when you are. And what’s interesting is during the sale, again, there is only so many people you can talk to. We do have a whole chapter on support team and how to put together people to support you, but afterwards, there can be this sense of, shouldn’t I be happy now? Hey, my company was really stressing me out. I don’t have to work on that anymore and I have this huge pile of cash in the bank, but now I’m unhappy. We have this expression whining on the yacht. It’s like you can’t just go on Twitter and say, man, sold my company for $10 million. Life sucks. And I’m so sad every day  

Dr. Sherry Walling:
I’m so bored and lonely.  

Rob Walling:
Totally. Even if that’s really the case. And we talk a lot about that of first day of the rest of your life, like how to recover from this and how to find a peer groups. There are other entrepreneurs who’ve gone through this  

Dr. Sherry Walling:
And to re-anchor into meaning you’re getting a second act, you’ve built something, you’ve gone through the whole journey and then sold it. And it is an immense opportunity to use the phrase that from David Brooks to climb a second mountain to do something else that is interesting and meaningful and valuable to you and to your family and to the world around you. But people have a complicated relationship with that. Sometimes people rush, they can’t tolerate this in-between space, the patients of really considering what’s next. So they buy a company before they’ve finished selling their other company, we tell this story in the book, or they get so churned around about what to do next that they spend years spinning their wheels, not doing anything. So this conversation about what to do next is really important because it does help people re-anchor to what they want their lives to be about in this next iteration.  

Rob Walling:
And we talk about it in, well, we talk about purgatory of, Hey, you’re working for the acquirer still, where it’s this weird in-between of I’ve sold, I have this money, I don’t control the company anymore and I got to figure out now how to be an employee. But then once you do have that break, assuming you move on from that at some point after an earnout, then we talk about how to recover, how to rest up, how to physically recover, connect with yourself and as you’re saying, take stock of the past, embrace the present and look ahead and ask yourself what’s next and with what’s next, there are a couple traps we call out that we’ve seen over and over. It’s the prove I can do it again, trap and the sail away forever trap. Why do people fall into these same traps over and over?  

Dr. Sherry Walling:
It’s so deeply part of us, this story that we create about who we are because of the business that we’ve built. And so the proof I can do it again is about, look how good at entrepreneurship I am. Look how creative look, how it’s just look who I am based on this outcome that I can create. And the pressure to try to do it again just as to reinforce your perception of your identity and then the sail away forever. Ever trap is a little bit like, I don’t need any of it. I’m just going to go retire on a beach in Mexico, which is also not true for the vast majority of entrepreneurs. It’s not an accurate read of themselves. So it’s about needing too much to be an entrepreneur in the prove. I can do it again, sense or not having a proper respect or reverence for how deeply you are a maker and a creator in the sail away forever trip. So finding your balance between those two edges of the spectrum.  

Rob Walling:
And of course, we also, I like this chapter title, what do you Do with a big pile of money? We talk about how money reduces your circle appears and how it changes your friends and your family relationships and even romantic relationships. So obviously this is not a book on specific investing advice, but we do dabble a little bit in that as well. I really liked one quote in that chapter where a founder said, I had all this money and traditionally I’d been investing in index funds and just kind of following the basic financial advice that you would do. And now I had all this money, so I invest like a rich person and started making risky bets and investing in private equity and this stuff that’s not necessarily, it’s like you still Vanguard Index funds or Schwab index funds are still really, really good, even if you have 10, 20, $30 million that you need to invest.  

Dr. Sherry Walling:
Well, again, that speaks to this identity piece, right? I was a scrappy founder and now I’m someone with a big bank account. So doesn’t that mean that I act or hold myself in this different way that my identity shifts now that I’m a rich person or now that I’m a post exit founder? And that’s not necessarily true. Your identity is your identity. You can weave it through these changes, but we have this idea that we put on these certain roles and then act accordingly to those roles. And so I think the theme of the book really is about being able to step back and to see your pull to some of those default settings, and then the ability to choose whether that setting really fits or doesn’t, whether there is a way that rich people invest or not.  

Rob Walling:
And then to cap us off, I’m not going to tell the story, I’m just going to tease it, but one of the cringes stories in the entire book is when you ran over my original Andy Warhol in your Porsche,  

Dr. Sherry Walling:
That did happen,  

Rob Walling:
And I’m going to leave that there. I’m a person who does not identify as a rich person, and yet there you go. That actually happened. So in order to hear that story, you’re going to need to go to exit strategy book.com, back the Kickstarter, and we look forward to getting this book in your hot little hands. Dr. Walling, thanks so much for joining me on the show. Folks want to keep up with you. They can follow you on X Twitter at sherry walling and zen founder.com is your home on the internet, and you have a newsletter that you send out every week as well as a podcast called Zen Founder. Thanks again for joining me.  

Dr. Sherry Walling:
My pleasure. See you in the kitchen.  

Rob Walling:
Thanks to Dr. Walling for joining me on the show. And thank you for joining me this week and every week, exit strategy book.com. If you would like to pick up your hardcover copy, this is the only hardcover printing we will do after these ship. We will then have print on demand paperbacks from Amazon. So if you want to get the fancy schmancy version, these look really good. Honestly, again, I’m really proud of what we put together. Head to exit strategy book.com. Thanks so much for joining me this week and every week. This is Rob Walling signing off from episode 740.

Rob Walling:
Welcome back to another episode of Startups For, the Rest, Of Us. I’m your host, Rob Walling. In this episode, I talk with Andy Kim. He’s the co-founder, co-owner of a SaaS app called Rado that’s at Trot two. Andy acquired the majority of the business from the original developer that built it, and rado is in an interesting position in the sense of once they acquire customers, their retention is extremely high. But most people who need the tool are either unaware they have a problem or problem aware, but they’re not even solution or product or most aware. And we talk about that dynamic in the show of how difficult that can be and how it can be a bit of a headwind to get over. But to Andy’s credit, he’s making progress and growing the business month to month and has figured out some interesting approaches for getting around that. 

Before we dive into the episode, I have a Kickstarter that’s launching a week from today. It’s for my new book that I co-wrote with my wife, Dr. Sherry Walling. A book is called Exit Strategy, the Entrepreneur’s Guide to Selling Your Business Without Regret. Sherry and I have taken our combined many, many years of experience going through exits, counseling founders, through exits, and it’s not just focused on SaaS, it’s all types of businesses, but obviously there’s a light emphasis on SaaS because of course we do have more of a network in the space. But if you’d consider backing the Kickstarter, you can head to exit strategy book.com and click back the Kickstarter button and we will be in touch the moment it goes live. Could really use your support first. 24 hours is a great signal to everyone that if there’s a lot of backers, then we tend to get more. So exit strategy book.com if you’re interested in that. And with that, let’s dive into my conversation with Andy. Andy Kim, welcome to the show. Hey,  

Andy Kim:
Thanks for having me.  

Rob Walling:
Yeah, thanks for joining me today, man. So you run rado, that’s Trot two, and the H one is easy and secure. Go links, quickly share and remember links by shortening lengthy URLs. Try for free. the hell is a GoLink?  

Andy Kim:
That’s a good question. So most people probably have not heard of a GoLink, but the way to think of it is a UR L shortener. The consumer version of this is Bitly or Tiny URL, but GoLink specifically only work for people within the same organization. So whereas you would use Bitly to shorten our URL for marketing purposes to the general public where anyone can click on that link, goal links only work if you and I work at the same company. And the purpose is really to share resources between each  

Rob Walling:
Other. Got it. So folks understand you are a SaaS, you charge per seat, right? Per user. And when I think of Bitly and what was the other one, tiny URLI think of these big kind of freemium, consumer cheap plays, but you are much more on the enterprise side.  

Andy Kim:
Yep.  

Rob Walling:
Isn’t that right? Okay. So talk us through how that, it’s like two sides of a different coin.  

Andy Kim:
Yeah, and if you remember, Rob, when we were actually interviewing for TinySeed, you were questioning why do companies even pay for this, right? It’s an interesting phenomenon, but the reality is this is what I call enterprise software tool that works. The larger the company is, the larger the problem becomes. So there’s really three use cases I’d say, and then individual use. But the way that we break it down between those three, sometimes there’s good overlap, but really the fundamental problem is, hey, Rob sent me a resource three months ago and I don’t remember where he sent it, email Slack. He might have told me over a video conference, but Go Links basically helps you remember where to go because a human readable link most of the time, that’s a lot easier to recall.  

Rob Walling:
Got it. So as an example, then if I wanted to implement Go Links in for TinySeed, I would install a browser plugin, and then I sign into my Go Links account as a TinySeed employee. And there’s what is TinySeed team? Six or seven of us. So six or seven of us would all sign in, and then I can type in to my browser. Let’s say I’m in Chrome TinySeed dot com slash some internal short code, like a R’S deck. And we know an R’S deck is the deck. That is not a great example, but some type of short code. And now that has to then point somewhere, right? It points to a Dropbox location or some URL doesn’t store the files themselves. It literally is just a hop.  

Andy Kim:
We don’t store or host anything. Yeah. Got it. And actually you would just type in Go slash Einar file and that would be it. You don’t even have to do the TinySeed portion.  

Rob Walling:
Yeah. Oh, go. So it doesn’t need to be a TLD. It’s literally because the Chrome browser is  

Andy Kim:
Correct.  

Rob Walling:
The Chrome plugin, I’m sorry, is going Ah, go slash a R’s important resource.  

Andy Kim:
Yeah.  

Rob Walling:
So is this a real problem? Who’s paying for this? I guess it’s like who uses this? Someone invented this and it’s somehow popular. What’s the story?  

Andy Kim:
Yeah, this was started back in the early to mid two thousands at Google. We actually have a very cool interview with a couple of the people that started this at Google on our website. You can check that out. But basically folks at Google were asking to set up these redirects. So they would say, Hey, I have a holiday party. I’m planning for all of Google. It’s really hard to communicate this to 10, 20, 50,000 people and it’s going to be go slash holiday party 2007 for example. And they communicate that to Google, and these engineers were setting up these redirects internally for Google and they thought, let’s set up a service for this so that anyone can just self-serve themselves. And what ended up happening was as this just exploded in popularity at Google, folks left Google, they would go to LinkedIn or Netflix or any other large tech company and they would set the service up for themselves. And that’s really what happened with John, my co-founder as well. He worked at Google, went to a startup, wanted go links, set it up for them, other folks kept on coming back to him and asking him to set it up for their startup. And he’s like, bang idea. Let’s make this a service.  

Rob Walling:
Got it. So then this is independent. The concept of Go Links has been built by hand inside Google and other Silicon Valley startups, and then Rado is a self-serve version of not Not right, but it’s a SaaS version of the same thing that John kind of obfuscated out. It’s such a trip, it sounds like still to this day, I am like, don’t know. I don’t feel like I need this myself. I don’t feel like I need this, but it’s obvious you have clients like what Figma? I mean you have big enterprise, any other notables,  

Andy Kim:
A couple of Fortune 500 companies for sure.  

Rob Walling:
So it’s for them to pay for it and your pricing’s on your website, it’s a $3 per user. Got it. I can just extrapolate to, these are not small contracts, these are enterprise size contracts, so it’s obviously for there to be enterprise contracts around this is something that if you haven’t used it, it doesn’t feel like a pain point, but when you use it and get kind of addicted to it or get used to it perhaps that the next company go to, you’re like, I got to have this. Is that really what?  

Andy Kim:
Definitely.  

Rob Walling:
Okay.  

Andy Kim:
That’s definitely it. I mean, we can see it in our user base. So there’s, depending on the company, there are 20 to 30% of users that use this more than five times a day. Anything that they’re going to, they’re using a goal link to get there. There are others that may be more like you who only use it once a month if that, and it’s because I as a power user sent you a link. But what we find is that the adoption rate of this within a company doesn’t stop at 20 or 30%. It’s like 70% average usage per month for all of the employees at a particular company. Once they’ve fully adopted this, it’s a daily weekly tool that folks use regularly. It just becomes part of your normal workflow. You don’t look to bookmark things, you just know that a Go link exists. So think of it as a bookmark placer, think of it as a memory helper, all of that.  

Rob Walling:
Interesting. Before we get further, I want to dig into the story of rado and how you’ve been growing it, but can you give us an idea of where the business stands today?  

Andy Kim:
Yeah, we’re profitable, which is great. We’re six figures in revenue. The story generally is John built an awesome product. It stands up on its own. We have SOC two, type two, we have a bunch of different services including SSO. We have a Slack app. So all of the pieces are there that John built, but he was a classic founder who focused more on the product itself rather than a little bit more on the sales and marketing piece of it. And that’s kind of where I come into the picture and that’s kind of where we are today, which is you’ll talk about probably some of the issues that we may have, but that’s the problem we’re trying to solve for is how do we get awareness out there about what Go Links are and also why Trato is the best option for someone who is looking for Go Links. And that’s really the crux of where we are today.  

Rob Walling:
That is, that’s the next thing I want to talk about is you have, I talk about on this podcast, five stages of awareness from Eugene Schwartz and its unaware, problem aware, solution aware, product aware, and most aware in that order. For most people, they’re just unaware, like I was unaware of this before you interviewed a TinySeed. But then there is a different subset that is problem aware, and the problem that they have is, I used Go Links at insert name of startups, I’m at the new place of employment, and my problem is I really want those, right? But they probably aren’t aware that there is a solution to this, and I imagine they think I need to get engineering to build it. We had a custom one at the other thing and the IT department or whatever maintained it. So how do, as a founder who’s trying to grow this business deal with that of, Hey, because in a perfect world, you’re at stage one and two, you want to be at four and five, you want to be at product, everyone’s product aware, Hubspotter, Salesforce or Shopify or everybody’s most aware, whatever, it never happens, but you’re all the way at the other end, so it feels like a headwind. 

How do you think about that as a founder?  

Andy Kim:
Yeah, I think if we were trying to get every company in the world to adopt Go Links, that would feel like an impossible task. Just boiling the ocean. You’re never going to be able to get the attention span of everyone out there to be able to do that. So that’s not something that we really think about. We’re trying to solve for, Hey, folks that have already used Go Links say, and you can pull folks that used to work at the Googles and Netflix is the big tech companies of the world, and oh, they work at a new company now, and that becomes our ideal customer profile. These people probably have used Gox before, and in the best case scenario, they’ve loved Gox. I’ll give you one example. We reached out to the CTO of a very large tech company, a Fortune 500 company, and they didn’t have Go Links and responded immediately to a very cold email outreach and they have I think north of 10,000 employees, and it was an instant conversation. He was selling Go links to the other people on his team on that call. It was great. Now we have to go and close that deal, and there’s other considerations like budget and timing and all of this, but that’s the kind of power of, Hey, if you’ve used Go Links before and it was part of your workflow, this is an easier sell than most. But the problem is if you haven’t used Go Links, then you fall into Rob Wallings world where you’re like, why the heck would anyone buy this thing?  

Rob Walling:
A real customer education challenge, right? In that because you’re not inventing a new category, the category exists, but it’s not a big category yet. It’s not DocuSign like electronic signature or scheduling links or marketing automation or something where it’s this massive thing with dozens of competitors, if not hundreds. It’s this, and this is a conversation, and I’ve had when you interviewed for TinySeed was like, how big can this get? How many pasta? I mean, I guess over the course of 20 years, as people move to a new job and moved a new job, it’ll eventually propagate. But today, how do you think about that as a mostly bootstrap startup? I’m presuming since you’re in TinySeed that you want to get two, seven or eight figures in a RR. Yeah. And how do you think about that?  

Andy Kim:
Yeah, I think what’s exciting for us is that what we’re seeing is true. Our target market continues to be technology companies, but there are non-technology companies, say in automotive, industrial healthcare government, and that is wide open greenfield opportunity for us. And they are, I would say, in a sense, starved of productivity tools like Go Links that technology companies use every day and take for granted DocuSign. CRMs are just one classic example of that, but there’s so many other niche kind of productivity tools that if you work at a tech company, you’re like, oh yeah, of course this works. Of course this works. And that kind of migration from technology companies to non-tech seeing that live in our pipeline, and that’s what I’m most excited about because you’re right, it’d be one thing if it was kind of slowly moving across tech companies. That’d be a slow growing market, but because we have non-tech companies adopting this as well, that’s kind of what I’m most excited about. For example, we have a nonprofit customer who said, truly when new employees join and they use Go Links, and they were working at other nonprofit before, it is just magic. It just works. And that’s kind of the magic that we’re trying to achieve. Not just that tech companies, but non-tech companies.  

Rob Walling:
There are actually quite a few products and TinySeed that are hard to get the deal signed, but the retention is through the roof. It’s like there’s net negative churn, frankly. And it feels like Rado is that kind of product. Would you that? Yeah,  

Andy Kim:
I would agree. I mean, we have customers who have been with us for four or five years now, and the companies are growing, which is great for us. Again, we charge per seat, but we see the, hey, new people join the company. They start using Go Links, and it just expands the overall pie for us. And that’s exciting for us, and that’s what we’re really trying to achieve.  

Rob Walling:
And so I’d imagine that your marketing or slash go to market motion has to all be outbound because I can’t imagine there’s much search volume or even much conversation in Facebook groups or Quora or Reddit, all the marketing. I have 20 B2B marketing approaches in SaaS Playbook, and I’m guessing 19 of them don’t work. I mean, I’m sure in person event there’s some things that could work, but it seems like you would have to be going out there finding people.  

Andy Kim:
Yeah, that’s what we’re really trying to solve for is what is the repeatable marketing funnel that works for us? We’ve tried outbound email, we’ve tried Google AdWords, of course, we’ve tried all the different kind of playbook items, and we’re still really searching for what is the best solution that says, I can put in X amount of effort and time and money resulting in why leads that part of the funnel we have not yet solved for yet. And that’s part of the journey that we’re on.  

Rob Walling:
Yeah, that’s the stage of a lot of most listeners to this show are in that stage of trying to figure out what’s the repeatable thing that I can scale up. I remember it was interesting in some of my earlier software slash SaaS companies, I found one or two channels that I could really crank up and really get a lot of volume out of. When I launched Drip, I remember being like, yeah, I’ve got to find that one or two thing, one or two. And it never happened. It was just a bunch of things. I don’t think there was a single kind of traffic source, so to speak, that was more than 15% of our monthly trials. So we had, oh, 

Yeah. And it was all time I was running, I was dealing with Facebook ads. I was paying somebody to run those. We were doing SEO, I was doing podcast tours, we were had an affiliate program. There was all kinds of stuff. And it was just all that’s great for kind of diversification so that no single source can crush you. It also kind of sucks because I had to manage all of that, and we were, at the time, we were a four person team, five person team. And by the end, by time we sold, we were 10, but oh, we were doing cold outbound as well. I mean, we were doing all of it, and it was all kind of working. It was all working well enough, and as a big, it got the snowball going, and the growth was really good. I mean, that’s one of the reasons we got acquired was we were picking up market share so fast, but I found it frustrating to be on this small team and be like, I don’t want to manage all this crap. I needed a marketing team of six or eight people probably, and it was me, halftime, and a full-time junior marketer, and then our customer success person halftime. And it was always frustrating. It is not a myth to be like, Ooh, you’re going to find one or two things that work, but it’s really hard. It takes a lot. It doesn’t just take a lot of trial and error. It just doesn’t work in all spaces or with all categories where you’re just going to find that single silver bullet, so to speak.  

Andy Kim:
Yeah, I agree. This is actually a common topic for our TinySeed Masterminds group actually of, okay, we have a product that we think is working now, how do we reach the right people at the right time? And I think that’s actually some of the value in the community as well, right? Because I mean, I just use the Slack channel all the time to ping people and be like, Hey, we’re thinking about trying this. We are doing this. And just people that have been on that journey before is just super helpful to get all of their thoughts.  

Rob Walling:
Yeah, it’s definitely helpful to learn from those who came before you. That’s whether, if you’re in TinySeed how to do that. If you’re in the MicroComp orbit that’s MicroComp Connect, or even listening to this podcast and hearing the experience of folks and reading the books and all that, hiring senior developers can really move the needle in your business. But if you bring on the wrong person, you can quickly burn through your runway. If you need help finding a vetted senior results oriented developer, you should reach out to today’s sponsor lemon.io. For years, they’ve been helping our audience find high quality global talent at competitive rates. And they can help you too. Don’t just take my word for it, listener. Dylan Pierce had this to say about working with lemon.io. The machine learning engineer, they helped me hire was very professional and even learned a new tech stack to set up an environment to train and deploy machine learning models. He documented his work clearly so I could train it in the future with additional data. I’m super happy with the results. And longtime listener, Chaz Yun hired a senior developer from lemon.io and said his hire quote, definitely knew his stuff, provided appropriate feedback and pushback and had great communication, including very fluent English. He really exceeded my expectations. Chaz said he definitely used lemon.io again when he’s looking for a senior level engineer to learn more and get a 15% discount on your first four weeks of working with a developer head to lemon.io/startups. That’s lemon.io/startups. 

So I want to switch it up a little bit and ask you about the, I’d say the unorthodox way that you came about being a co-founder of this company. So your co-founder John built it and got a first big customer in 2020, and then you came in, it was either 2023 or 2024 last year, and you bought into the business and he’s now a minority owner. TinySeed obviously owns our percentage, but tell us a little bit about how that went down and who came up with the idea. Again, it’s unorthodox, and I like to tell stories on this show to give people an idea of, oh, that’s possible. I didn’t know you could do that. Right? And then when I heard your story, I was like, huh. Yeah, it’s an interesting way. So walk us through what happened.  

Andy Kim:
Yeah. So I have been interested in my own startup for the longest time. I can’t even begin to tell you how long it’s been. And part of the problem was how do I stand something up? How do I get the first customer? How do I get the first product out the door? How do I get first interest? And that to me was a big enough barrier that it felt like diving off the deep end. What ended up happening was I’ve been looking for businesses to buy on various marketplaces, and one that came across for me on Quiet Light was John’s business, this Rado business. And John’s part of the story is really, he built this thing to be sustainable, but he has a full-time job as a software engineer, and this business just wasn’t getting enough care and attention that it needed. And admittedly, he probably stubbed his toe with other partners in the past, but with me buying in, it’s a real capital commitment to growing this thing. 

And I think at the end of the day, what mattered the most and continues to matter the most to us is the level of trust that John and I have built over the last year plus of, Hey, John, I’m taking care of his baby, basically his company, and taking it forward. And he’s there as support on critical issues that he has the experience and knowledge about, and it’s actually worked out better than I could have really imagined for I think both of our cases. And it’s something that I’m super happy about and excited that it’s kind of turned out the way that it has.  

Rob Walling:
Did you and John know each other before this?  

Andy Kim:
No, we did not.  

Rob Walling:
Okay. How did you find each other?  

Andy Kim:
Through Quiet Light, the broker?  

Rob Walling:
Ah, very nice. I didn’t know that Quiet light would do majority, but not full acquisitions.  

Andy Kim:
Yeah, I think at the time I also wanted to acquire the full business, but in conversations as John and I built trust, I think John wanted to retain a certain percentage, and in retrospect, it was probably the right outcome for both of us to make sure that our incentives were aligned. So he’s still involved  

Rob Walling:
With the business.  

Andy Kim:
I mean, we used to catch up every week. It then turned into every two weeks. Now it’s on a monthly basis. But yeah, I ping him all the time on Slack and bother him with questions, and yeah, it’s been  

Rob Walling:
Great. As we move towards wrapping up, I have question for you that I like to ask of a lot of guests that come on the show, and it’s, in your experience running, growing, building this business, what has been the hardest thing about it? And you can either say overall like, Ooh, it’s been X, Y, Z challenge. Or if there’s a moment where you were like, this is so I’m not having fun at all. You can also just go to a moment.  

Andy Kim:
I don’t have a moment, but it is the general feeling of not knowing what the right answers are. You go to school and you’re like, okay, I got an A or B on that test. You go to work and you’re like, okay, I know I’m doing well or I’m not doing well. You know what the company’s doing, but you’re a smaller part of it when you’re at the size of company that we are. And it seems like at times we’re flailing in a large ocean of everything else that’s going on. The real question is how do you know what your North Star is? How do you know that you’re making progress against that, and how do you try to figure out the basic problems of going from basically nothing to a company with processes and with people and with all of that? So I think the general frustration of the question is all of the effort that we’re putting together on this thing worth what we think it’s going to be worth, that’s the real crux of the problem. And again, on the marketing side, you can truly spend unlimited amounts of money into all of the various methodologies and end up with nothing. This is not a game where you are guaranteed results, and I think that general kind of frustration is the toughest part of this entire journey.  

Rob Walling:
The uncertainty, yeah. It’s not just the money, it’s your opportunity cost, man. You could get a job working for a company in the Bay Area and make lots of money, and yet you are basically, I’m guessing, taking a below market salary as most of us do, and just trying to figure it out. And that is a real, it’s a gamble, kind of the traditional, maybe Silicon Valley or YC founder is like a 23-year-old founder doing it or having a this and that, and there’s a reason for that stereotype. Most of the MicroConf, TinySeed startups of the rest of his ecosystem tends to skew a little older, let’s say thirties and forties, some folks in their fifties. But the further you get on and the more you’re making three 50 grand a year as an engineer, senior engineer for Facebook or something, it becomes really hard to leave that for the uncertainty of a startup. And I think it is. I mean, it’s just one of the big concerns that folks have.  

Andy Kim:
Definitely the uncertainty though also makes it a little bit more fun when things do go your way and you do figure it out. And truly, I think that we would have some difficulty if it wasn’t for the TinySeed community, just like being able to call you or call a and r or the mastermind group that we have. It’s just super helpful to be like, okay, I’m not in this alone, and here’s how we’re all going to get through it together.  

Rob Walling:
Being alone in the uncertainty is even harder and being alone and having a spouse or a family in the uncertainty, and it’s like, well, I’m going to spend all these nights and weekends for at least you’re able to do it full time, hopefully mostly during the day. But the boots, I bootstrapped five companies and then raise money for TinySeed, but four of them, I did effectively nights and weekends, and it was not fun. I had young kids and I was telling Sherry, my wife, so all this time I’m putting into this thing. By the time I was on the second one, the first one had made enough money that it was like, okay, I’m going to do this again. And I kind of know what I’m doing now and now Fred. But the first one was a real tough sell. When our friends were like, let’s go to happy hour. 

And I’m like, I would love to. Or I’d go and I’d leave early. I was like, dude, I got to get home and write some code on this thing. These are the trade-offs, the unseen, unseen trade-offs of entrepreneurship, but specifically bootstrapping of any kind is just a lot of grinding hours. So Andy Kim, thanks so much for joining me on the show. If folks want to keep up with you on X Twitter, you are at rado hq. And of course, if folks want to check out Trot, thanks again. Thanks again to Andy for coming on the show, and thank you for listening this week and every week. This is Rob Walling signing off from episode 739.

Rob Walling:
Alright. Alright. Alright. It’s another episode of Startups For, the Rest, Of Us. I’m your host, Rob Walling, and in this episode I’m going to be answering your questions. Well, maybe not your particular questions, but if you want me to answer your particular question in a future episode, go to startups For, the Rest Of Us dot com, click ask a question. In the top nab, you could send me an audio, a video, a text question. Today I’m going to be covering more later stage questions. I believe the earliest stage company is seven KMRR and the latest stage has 25 or 30 employees. So this is where it gets fun. I ask for these kinds of questions on X Twitter and folks showed up and delivered, so I’m excited to dig into them today. Before I do that, I want to let you know MicroConf Remote is going live again on November 20th. 

The focus is on early stage marketing. We’re going to do it in single day three speakers plus q and a after each talk, plus our founder by founder sessions microcomp.com/remote to see all the extra bonuses my team is including. If you purchase by November 7th, it’s a hundred percent online. It’s from 10:00 AM to 1:00 PM Eastern, and of course we record the sessions in case that time doesn’t work for you. Microcom remote is our low priced but high value three hour event we do about every six months and usually one focuses on early stage marketing, the other focuses on early stage sales and then one on the November 20th, as I’ve said, is going to lean heavily into early stage marketing. So microcom.com/remote if you’re interested. I hope to see you there. And with that, let’s dive in to our first listener question. 

This first question is from a longtime listener and a MicroConf attendee. I’m going to keep him anonymous per his request, but I did have a chance to meet him at our most recent event in Croatia. The asker says we are a team of 25. Our order sizes vary from about $100 per year all the way up to $75,000 a year. That’s servicing individuals, teams and departments, but we want to add full enterprises and six figure sales, which for us would be a thousand users and above. Should we be looking to offer them higher service at a higher price per user? So like dedicated account managers, product request priority, et cetera, or a lower price per user and just a small degree of extra service. For example, double the number of training sessions even though they have many times more users. And the question asker referenced a link to a Jason Cohen episode called Adjacency Matrix, how to Expand After product-market fit. 

And the quote from there is what might not have been obvious is how dramatically different it is to sell to the enterprise. Often startups claim this as their growth plan even when they’re only at 500 k in a RR. Again, this is Jason Cohen speaking in this essay. This is definitely the wrong strategy at that moment. This exercise makes it clear yet companies often conclude the opposite. They should instead be considering simple use cases at larger companies. So they should be ignoring the complexity of large companies so they can continue winning where they are already strong. So Jason Cohen, I like the way he breaks this down is selling to the enterprise can be done in different ways. You can have simple use cases at larger companies and we can call them enterprise usually. I don’t differentiate between those two things on this show, but a simple use case at a large company versus a true enterprise sale where it’s a quarter million dollars, a half a million dollars, the sales lead time is one to two years. 

Procurement alone takes 3, 4, 5 months. They redline your terms of service. That is different than a simple use case that your selling a lot of your licenses to a very large enterprise. So that’s what the question asker is asking, right? Should they think about getting into these enterprise sales at this point with a team of 25, they already sell up to 75,000 per year. I’m of a couple minds on this one. I’m going to be honest, I hate enterprise sales. And so if you can get away without doing the 6, 12, 18, 24 month sales cycles, I would do that and still grow the business. I would do that. They are nothing but a headache. And enterprise sales is something that a lot of bootstrappers shy away from. They want the self-serve bootstrapper dream, so to speak. But there’s an in between. If you’re selling $75,000 a year contracts right now and you’re not having to deal with all the headaches of true enterprise sales, I think that’s a pretty good business. 

On the flip side, one could say, well, do you want to maximize for growth or do you want to maximize for how much you enjoy running the company? And I think that’s a question to ask yourself is maximizing for growth would imply you would go wherever the money is, and so you would dig into these extremely complex sales. But the second thing is what do these companies want? We’re thinking about it right now from your perspective as the founder, but how do these companies want to buy? How do they buy today when they buy something else that costs a hundred, $150,000? Do they want higher services at a higher price or do they want a lower price per user and a small degree of extra service? If I were you, I would try to charge a higher price per user to enterprises. It’s not always possible, but that is, we talk about the perfect pricing. 

Typically it starts at like $50 a month and then it doubles and doubles, so it’s 102 hundred a month, and you have this dual funnel also where you’re selling 10,000 or $50,000 a year. I’m just laying out ideal pricing. If I were to build a company from scratch today, in addition, enterprise would pay a higher price per user, not a lower price, and that’s because they need things like custom terms of service. They need to be able to redline everything. They need to be able to have invoices and pos, which are probably already doing at 75,000 a year. They might need single sign on, which I know has traditionally been an enterprise offering, but has recently almost started drifting down into cheaper tiers. They need a dedicated account manager, as you’ve said, dedicated support SLAs in terms of uptime and support response times. You have product request priority, et cetera. 

That’s where I would lean towards is your team is at a size of 25 people where I feel like you can support that kind of true enterprise plan. So if I were in your shoes, that’s the direction9I would lean. And then his second question is, for our first product, we were lucky and had time for people to start organically talking about it at professional associations, trade shows, et cetera. But for our second product, it’s ai, so we don’t have as much time. What are your favorite examples of encouraging word of mouth marketing in B2B SaaS? I get this question once a month just from maybe a TinySeed founder or in some type of q and a or conversation. The bottom line is word of mouth is a great marketing channel because it’s free and it happens on its own. And word of mouth is a terrible marketing channel because it happens on its own. 

And trying to encourage word of mouth marketing is something I have never seen B2B SaaS do well, I’ve never seen a silver bullet is more of what I should say. There are ways to encourage it, and I’m going to run through a few of those here, but there’s no way to control it. You could control your ad spend if you have pay-per-click marketing work, you could control cold outbound. You can control even going to events if that’s working. It’s fairly repeatable. You go to more events, you meet more people, but word of mouth feels like this perpetually elusive marketing approach that so many of us want to encourage. And it’s usually we try a few things and it kind of does, but you never really are in control of it. I don’t know of a single, again, I’m invested in 191 b, two B SaaS companies and I don’t know of a single one that has kind of a silver bullet of like, oh, just do that and it accelerates it. 

However, with all that said, first I want to define word of mouth marketing. There’s a semi-private Facebook group or a Slack channel or Reddit. These are things I call hangouts. And if you see a question, what is a great source of funding for Bootstrappers? And you might see people weigh in with, oh, check out TinySeed, check out MicroComp, check out Rob, Walling. That is a form of word of mouth because it is people that are not you chiming in on a, it can be public, semi-private, fully private conversation and effectively bringing up or endorsing your product. So that’s one way. There’s another way which is a direct conversation where it’s at an event. I’m having an in-person conversation. Someone says, what’s the best CRM today for B2B SaaS? And I say it depends on what you need, but I really like close.com and we still use Pipedrive and there’s one called Adio and we can kind of talk through, so that’s a similar but different form or even a direct email or a direct text. 

If a friend texts me and says, Hey, what’s your recommendation today for email marketing automation? And I’d be like, oh, well if you’re SaaS, then it’s user list. And I’ve always liked Active campaign and their beehive if you’re doing X, Y, Z. So I group those into kind of two different things of Direct one-on-one and more like public, semi-public. Then the third is virality. And this is where it’s not really word of mouth, but it’s like slack. There’s two depths of virality in B2B SaaS. You can actually read ’em out in the SaaS playbook, but one is strong virality and that’s like Slack has where, hey, in order to use it, I have to invite someone from my team. So the virality is very strong. It’s a very high viral loop when you have weak virality and B2B SaaS, that’s more like a powered by link. 

So like Savvy Cal or Sewell, their customers share a link to get someone to sign a document or to get someone to book their calendar. And so that’s weaker. SaaS virality powered by Drip link was another form of weak SaaS virality. It’s still virality, but I separate that from word of mouth, not the same. It’s not someone making a recommendation, it’s just as they’re using the tool, they’re doing it. Alright, so I’ve defined these three types, right? The public word of mouth, the private word of mouth, and virality with strong and weak. So favorite examples of encouraging, let’s say the public word of mouth. I like to monitor forums, Facebook groups, Reddit, podcasts. I used to use Google alerts and I found that Google alerts is, it just doesn’t work anymore. So there’s a couple of tools I use, one’s called F five Bot, the other one’s called sen, S-Y-F-T-E-N. 

And the third is Arvid calls Pods scan fm. And I use those three tools to monitor any mention of any of my brands. So TinySeed, MicroConf, SaaS, playbook, startups, For, the Rest, Of, Us, my own name, start small, stay small, just whatever you can imagine. I like to sometimes participate in those conversations and sometimes not. But I do like to hear and see how often people are mentioning it and in what context and sometimes I have to jump in and correct someone. They’ll say, oh, TinySeed offers this much for this percentage of a company. And I’m like, no, that’s not what we do. You’ve misunderstood, but thanks for mentioning and I’ll correct it. Other times I’ll just jump in and say thanks a lot for the mention. Really appreciate it. Usually someone will mention, oh, Rob Walling said this in a YouTube video, and then I’ll go out and find the YouTube video and I will link it up because like, Hey, thanks for the mention, here’s the direct link to make it easier for you. 

So that’s a way of encouraging engagement. It’s a thing that doesn’t scale, but I find that things that don’t scale work better than you might imagine even at later stages. So that’s for the more public interactions. Participating in those conversations. Once you’ve been mentioned to me, it’s fair game. Now I don’t come in posting a bunch of links. Here’s a discount code to the things you mentioned. I genuinely either say thank you, I correct stuff. If I find there’s maybe a misunderstanding or I provide direct links or even additional recommendations like, oh, you recommended that YouTube video. I actually talked about it more in depth in this podcast episode. There’s a transcript if you just want to read through it. Now let’s talk about the more refer a friend word of mouth. I know people who have refer a friend or affiliate programs and refer a friend, you get a month free. 

They get a month free. That’s fine. That works well with B2C. I find that it works perhaps less well with B2B. I’m not saying you shouldn’t do it, but a lot of B2B folks are just less motivated by a free month of service or by a $50 Amazon gift card. If you have something that you feel like will motivate your people to refer it, then you could certainly do a manual email to all of your customers and just try it. And whether it’s free service, Starbucks gift card, Amazon gift card or something else, you can totally try this. I will also say that with my last SaaS company and I recommend to others do this, is there’s a certain point where customers love your product, certain point in their lifecycle where they love it and they don’t take it for granted. Usually it’s 60 to 90 days, it’s just past that. 

It’s where your churn plummets it. So you might have 8% churn, 10% in your first month, 6% second month, and then it’s like 1% from then on. And what that shows you is that folks who’ve entered a credit card are using their first paid month as an extended trial. And so I know that if my churn plummets in the third month, probably about day 75 to 90, I want to send an email that’s like, Hey, I’m Rob. I’m the founder of X, Y, Z company. We are a bootstrapped software company and one of the ways that we grow is when folks who love this tool spread the word and to encourage that, I’d like to offer you this X, Y, Z reward. If you haven’t otherwise, just ask it as a favor. I would really appreciate if you are loving our tool, getting a lot of value out of it, if you would forward this email to a couple people who you think could get value out of it. 

So you just ask for it. Are you going to get a 50% uptake on that? You’re not. Are you going to get more than 0% uptake? You are? So that is something that we did at Drip and it performed to the tune of single digit percentages in terms of people forwarding and signing up. But the nice part is you can put a referral link in that email and then you’re able to track it. Last thing I’ll say with strong virality and weak virality is strong virality. You can’t really just engineer that into a product weak virality. You can’t think about where can I put a powered by link? Where can I put some type of weak viral loop and give that some thought? Again, I don’t consider that word of mouth. Some people just confuse virality and word of mouth. And so that’s really why I spent so much time defining those. So thanks for those questions anonymous. I hope my answers were helpful. My next question is a voicemail and of course audio and video questions do go to the top of the stack as well as later stage questions go to the top of the stack.  

Speaker 2:
Hey Rob, it’s Flores. Thanks in part to your content, we managed to grow our radio ad platform to about seven KMRR and it’s actually a complete new way of working with radio ads. And we find that when we speak to customers extensively by phone or at events, many of them become customers. But in online marketing for example, the traditional view of radio seems to work against us. How would you approach acquisition if you’re fighting against such a traditional view of your products, which is simply not true anymore? Thanks.  

Rob Walling:
Talk about a voice for radio. Wow, I’m envious of Flores’s voice. Thanks for the compliment. At the start he said thanks. In part to my content, we managed to grow our radio ad platform at about seven KMRR and that’s really cool. It’s always good to hear. So you’re facing what’s called an education problem. And of course as a bootstrapper, do we want to educate our market or do we want to go to the people who already believe it? We want to go to the people who already believe it. There are the five stages of awareness from Eugene Schwartz and it’s unaware, problem aware, solution aware, product aware, and most aware, in a perfect world, you only sell to most aware. The problem is in any given market, there might only be dozens of most aware people in the entire world looking for your solution this month. 

So you inevitably have to go up that chain to the stage four of product aware or just the problem aware people that are searching for how do I solve this problem? And you see companies like v.io do that really well, especially if that problem is searched for in Google and has high search volume. You can cover things like how do I add transcripts or subtitles to a video or captions or how do I resize a video? Again, if you go to v io and look in their top navigation, you’ll see they have 20, 30 different use cases. All of those are very obviously SEO plays. And so that’s a great way to go after folks who are problem aware but potentially not solution aware. And that of course is where a freemium funnel works really well. So if I’m being honest, my advice is don’t educate the market. 

Now, is that realistic? I don’t know. Is the market of people who understand the value of traditional radio advertising big enough for you to build a great business? I don’t know. But if you need to educate them, then no one’s searching for this, right? This is not an inbound product. It is truly outbound. And my entire premise would be to fight against that traditional view. So we saw Salesforce do this with their campaign back in the Ts where they said no software, right? The traditional view of CRM software was that. It was like what? PeopleSoft, I don’t even remember what the CRMs were back then, but they were like a million dollar implementation and usually they didn’t work and it was all on-prem and it was a pain in the ass. It was consultants and it took two years and Salesforce said no software, right? 

They had the circle with the line through it and software in it, and they became the anti software company. Now they are software today. That’s the funny thing is software at that point was considered, it was desktop or installed or on-prem. These days we think of SaaS as software, but there was a differentiation at that point. There was cloud-based software, right? Application service providers. Their whole education plan or their whole education approach was to educate the market and to take a real strong stance. HubSpot did the same thing. They invented this term inbound marketing. I had talked to Dharmesh at one point. He said it took millions of dollars. It might even have been eight figures and several years to kind of define that term. And it’s expensive and it takes a long time. With Drip, we took the same approach, obviously at a much smaller scale because we were bootstrapped, but the headline that I’ve mentioned on this show many times is lightweight marketing automation. 

That doesn’t suck. So my big thing was marketing automation tools suck. They’re too expensive. The sales process is awful. Don’t use them, use us instead, we’re less expensive. Great ux, we’re not clunky, we’re not buggy. I was basically being very deliberate about going against the things that people hated. And these were all words that customers and potential customers had told us that they didn’t like about the competitors, right? The Infusionsoft, the Marketos, the Pardots. And so that became our entire positioning. That’s probably what I do here is be very opinionated about it and come out swinging in terms of you think traditional radio doesn’t work, this is where you’re wrong. This is not your father’s, it’s the old Oldsmobile ad campaign. This is not your father’s Oldsmobile where they tried to reposition, rebrand. That’s kind of the approach that I would think about and I would probably have a long conversation with Baird or chat GPT around this of how do I develop positioning and branding around this such that as long as I’m being genuine about it, and I’m not exaggerating claims, I’m basically saying, if you are not doing this and you’re this type of business, you are missing out. 

You are losing out. Stop paying $40 a click on Google when you can do radio ads and get people for a fraction of the price, right? So that’s how I think about it’s be super opinionated, don’t sell from your heels. I’d go in pretty hard. And so all that said, appreciate that question because in a perfect world, you don’t have to educate the market, but sometimes you find that you have to. So I hope my answer was helpful. My next question is from Sean Matthews.  

Speaker 3:
Hi, Sean Matthews from Left Hook. Currently we are a services company that builds integrations for software companies, bootstrapping our way to trying to build a software product that helps deliver the same thing using and leveraging pretty highly our open source framework called Frig that delivers and developed integrations. So what we’re looking for a question we have as we look at our ideal customer profile, it’s basically B2B SaaS, founders, companies, product people, partnerships. And we are curious as to how, and I haven’t heard you talk about this on the show before, what’s the general census about approaching accelerators, incubators, VCs, portfolio companies, and trying that as a channel to essentially sell your product into? And for us it would be approaching them and saying, Hey, look, we have this open source framework that you can use to build your integrations quickly and easily. And obviously we have some services on the side that we can sell them to do that, and we have a product we want to help manage that process for folks, but the core of the tech is open source and they can run it themselves. 

So the question is, is that a valid approach? Can we go to VCs? How should we go to VCs and say, Hey, we have this solution that could fit your entire portfolio, you should recommend it. Same thing with accelerators, same thing with incubators. I’m guessing this has been a thing that’s been attempted many times. So is it a frowned upon thing? Do people like it? How would you go about doing that? Obviously I do think having a direct relationship with VCs makes sense if we want to go get funding ourselves. On the flip side, I can imagine it becomes just a no-go. They get bid or sold that all the time. So why would they even talk to us? So curious, your thoughts. You have a more of an inside track than we do, and you probably heard people attempt this before. What’s your thought?  

Rob Walling:
Thanks for that question, Sean. Yeah, so there’s a couple approaches you can take here. One approach that you should not take is to scrape the portfolio companies from a website and cold outreach them one at a time because it really pisses people off. We get this about, let’s see, how often does it happen? Once a quarter, once a month within TinySeed. And the founders recognize it very quickly. They post in the private founder SOC channel and they say, is anyone else getting this outreach? And it becomes real obvious real quick. And then oftentimes we will reach out to someone and say, yeah, don’t do this. It’s bad form. You might say, well, it’s just cold outreach. Why wouldn’t I do that? Because it makes people mad because they don’t want to be sold to. That’s not the purpose of why they’re listed on a portfolio page. 

And it’s especially bad if you are leveraging my name MicroConf Tiny Seeds name and saying like, oh, I worked with another TinySeed company. And then people get in and they’re like, have they worked with anybody? Oh, are they lying? Or if they have, they’re kind of using our brand as if we’re endorsing them in this cold email. It’s a problem. So I would say don’t do that. If you’re going to do it, you want to, I think partner with the VCs, the accelerators, whoever. Now the thing you have to think there is, so what’s in it for them? Because the way you’ve described it, you have a tool and a service that could sell to these companies. So you get a lot out of this. You get sales. What do the portfolio companies or the VCs get out of you selling to them? What special deal, special service, significant noticeable discount. 

This is where you can think about maybe offering to be part of their perks. Pretty much every accelerator I know has a perks page with free AWS credits and all kinds of stuff. The thing there is it has to be significant. It’s not a 10% discount that doesn’t get you on perks pages. You’re talking 25, 35, 40 5% discount, like something noticeable or free for the first year. Something that really gets people’s attention because everybody wants to be on those perks pages for exactly the reasons you would imagine. But the perks page is probably the most standardized way of thinking about it. Another thing to consider is does the VC R accelerator, do they have anything you can sponsor? Do they throw an event? Do they have a podcast or YouTube channel? Do they have a newsletter? They have anything that takes sponsorships? Because that can be a nice way to get into conversation with them and sponsor it, see how it goes, see the support, and see if there is room down the line for some type of partnership. So thanks for that question, Sean. Hope it was helpful. My next question is about profit sharing.  

Speaker 4:
Hi Rob. This is Johannes longtime listener and co-founder of leady. We are a SaaS helping marketing agencies onboard their clients by getting them access to their clients’ accounts such as their Facebook page, Instagram, any advertising accounts. In just a few clicks, we have grown lei over the last four years into a profitable business and we would like to share some of these profits with our employees and freelancers. Of course, there are a few questions that we have to answer. For example, what percentage of our profits are we going to give away? Do we differ the compensation for each employee or freelancer by how many days they work for us or even where they’re based? For example, we have people from the Philippines and people from the uk, or do we make a difference also depending on how long they have been with us. We’d love to hear your thoughts on these questions and if you’ve seen any bootstrap companies doing this for their employees and even maybe freelancers without creating too much overhead. So keeping things simple as well. Thanks so much and keep it up.  

Rob Walling:
I appreciate this question. I get this every so often. In fact, so often that I wrote about it in my book. This has playbook sa playbook.com, quoting from page 138. The nice thing about profit sharing is that it doesn’t require you to sell your business for employees to make money. So in this section, this is a team chapter. I talk about equity, stock options, profit sharing. I even cover bonuses and I say consider structuring profit sharing as a pool rather than a committed percentage to an individual. For example, instead of telling early employees, they get one, two or 3% of profits have all key employees share in a 10 or 15% profit sharing pool. I go on for another few paragraphs. Obviously 10 bucks can get to the PD for the Kindle, or what is it, 12 bucks on Audible for to hear my dulcet tones read it to you. 

But the best explanation and examination of bootstrap or profit sharing that I know is from Peloni founder and CEO of Balsamic. So if you type in balsamic profit sharing in Google, you will find his article. And essentially they started with a pool of 10% of the profits, and that’s probably where I would start. You can always go up, you kind of don’t want to go down. He distributes it each quarter and at some point years into the company where he felt more comfortable, he increased it to 15, and I believe he’s now at 20% of the profits get distributed quarterly and it is allocated to full-time employees. Only 25% is split equally, and 75% is based on seniority. Then it’s weighed by the cost of living for each employee because they have salaries based on cost of living because they have 29 employees all around the world. 

And he notes they do quarterly because monthly was too much paperwork and yearly kept some unhappy people around longer than they should have stayed, which I really liked. That is by far the best breakdown. If you go read that full piece. I love the way he does it. I have seen some other bootstrappers write about their profit sharing, and I think some of the advice they give is really bad. So I would, without throwing particular people under the bus, I would look at PE, eagle zoning, balsamic, and I would ignore any other bootstrapper profit sharing that I see because I believe there was someone who was giving away more than 50% of their profits are their employees and that it makes your business, I’ll say almost inviable. It’s just if you ever go to sell, it’s just not a great way to structure a profit sharing. It’s too much. So with that said, it’s a short answer to a question, but hopefully that is helpful. And with that, we will wrap this episode. Thanks so much for joining me this weekend. Every week, this is Rob Walling signing off from episode 738.

Rob Walling:
It’s another episode of Startups For, the Rest, Of Us. I’m your host, Rob Walling, and in this episode I sit down with Derek Reimer as we review the key takeaways from MicroConf Europe 2024, which happened just two or three weeks back in Dubrovnik, Croatia. You’ll hear us discuss in this episode several of the most notable talks, as well as some takeaways that we received from the speakers. In addition, I give an overview of the event and I talk about how it sold out in only seven weeks, and there were many folks who wanted to attend the event that weren’t able to get a ticket. So if you’d like to attend the next MicroConf, it’s going to be in New Orleans next March, you can head to MicroConf dot com slash us to get your ticket. Now, the tickets as of today, are the least expensive they will ever be. They’re only going to get more expensive. And this event, if our past events are any indication, will sell out. So MicroConf dot com slash us if you’re interested in heading to New Orleans in March of 2025. And with that, let’s dive right into my conversation with Derek Rimer. 

Derek Rimer, thanks for joining me on the show to talk through MicroComp Europe.  

Derrick Reimer:
Yeah, it’s my pleasure to be back. Just sinking back into central time, having left Europe yesterday.  

Rob Walling:
So you woke up at five 5:00 AM all bright-eyed, Moshi  

Derrick Reimer:
Tailed. I get glimpses of what it’s like to be a true morning person.  

Rob Walling:
Indeed. I love flying West. It’s so nice. And then flying east is like, oh no, I need to take gobs of melatonin and still wake up. Actually, the first night I was there because I got two or three hours sleep on the flight to Dubrovnik, and then first night I was there I stayed up just till eight, which is like a victory. I’m so tired. Oh my gosh. So I take melatonin and I figured usually if I can make it to four or five, I’m super happy. So I wake up and it’s all dark outside and I was like, I got to go to the bathroom and I look at my clock, it’s 10:30 PM and I was kind of awake and I was like, no, I just took a nap. I basically, and I was like, I need to take more melatonin now  

Derrick Reimer:
To  

Rob Walling:
Get down. So I took again and then I was out till three 30 and I was like, no, that’s not enough. So I hate flying east.  

Derrick Reimer:
Yeah, it’s tough. I don’t have a ton of experience with it. And it’s funny, I was chatting with a R on the opening night and regaling it with my story of the 12 hour layover that I had on my way out to Europe. We came a little bit early to do a little vacation ahead of time, and then he was just laughing at me like, oh, you sweet summer child, you don’t know the tricks. Here’s how  

Rob Walling:
I would not do that. As someone who’s gone to Europe a bunch. Yeah, you do start to get a little travel hacky with it. I’m the same way. So this was your first time to MicroConf Europe and you’ve been to many of the US events? Almost all of them, if I recall right.  

Derrick Reimer:
All but the first one because I didn’t know you then. Very first one.  

Rob Walling:
Yeah. Yeah. What a trip. I guess to kick it off, let me give folks an overview of the European event maybe compared to the US event because the US event pre Covid was 300 people and post Covid has been about 2 25, 2 50, and the Europe event is the biggest event we’ve ever done in Europe. This year, I think it was 150 ish, maybe a little more, 155 attendees. And that’s the biggest it’s ever been. We sold it out in seven weeks and that’s been the new thing since covid is obviously there was a huge drop off and then we feel the momentum has come back to the event. So I expect Atlanta sold out, this sold out, and I expect MicroConf New Orleans. This is the announcement. No one’s heard that before. Now. Yeah, aside from, unless you were in dub, brunick, new Orleans, which is going to be next March, I expect that to sell out as well in the next couple months. So 150 ish, 150 to 160 attendees. The room was packed, great energy. There were 30 countries represented and interesting tidbit, we had 30 better half tickets. The guest passes where people can, your spouse or significant other can join you at an evening event. 

30 of those, so that’s 20% of the attendees brought a spouse or significant other, which I believe you yourself did.  

Derrick Reimer:
I did, yeah. And that was really awesome because I feel like I got to meet a lot of people’s plus ones and that gives you a different sense of the person. For sure. When my wife’s with me, she’s hyper social and very good at getting conversations steered towards, I want to meet, I want to talk about you as a person and not just the work, not just the startup you’re working on. Whereas a lot of times for me, a MicroConf conversation will just be like, oh, what are you building? Here’s what I’m building, what are you struggling with? And those are all interesting, but when you start to get a better sense of who the person is, that’s where real connections start to form.  

Rob Walling:
Yeah, big time. I like that about MicroConf. I don’t know of other events that do it. I’m sure there might be some, but one of the important things that we’ve always emphasized is family, relationships, kids if you have ’em, spouse, if you have one, it’s like this is all part of your life and we’re doing this to better our life, not to make a dent in the universe. We’re doing it because we want our lives to be better and your lives are not better if you torch your relationships. And so that is something I enjoyed about this event was that a lot of folks brought, as you said, significant others, that hotel though. So we Dubrovnik, we’ve done it there four times. We’ve done Europe, micro Europe, I believe 11 or 12 times, and four of them have been in Dubrovnik. So no matter how much I say on this podcast, it’s the Dubrovnik Palace Hotel, I believe it’s called. And I say it is one of the nicest hotels I’ve ever stayed in. The rooms are nice, but the view, every room has a full slider view of the Adriatic. You have a deck and all this stuff. I say it and then people don’t believe me. So when you got there, was it one of the best views you’ve ever had in your entire life out of a hotel?  

Derrick Reimer:
Oh, hands down. Yeah. I mean that place is just, yeah, it’s all about the scenery and I didn’t fully know what to expect. Having never been to Croatia before, I never been to Dubrovnik of course. But you get there and you just feel like you’re in another land. The landscape is just different than anything I’ve seen in the us. It’s just, it kind of its own thing. And you feel like you’re transported into another world and there’s not a bad sight line to be seen in that place. It’s  

Rob Walling:
Pretty magical and that’s why we keep coming back to it. And I don’t know, I mean basically I asked the attendees at the end, let us know, do you want to come back here again? Because it is a hotel that it’s hard to get to. I mean for me, for us coming from the US, it’s just a few more hops than I would like. But aside from that, there’s just no drawback to it. It’s such an amazing venue. So with that preamble, I mean I’d like to get into the talks and hear your thoughts and stuff. Talk about the excursions. That’s something we’ve started to do over the past few years as we’ve reshaped and reprogrammed to the event. It used to be nine talks in two days and now it’s like five or six talks, and we fill in the rest of that sometimes with workshops and all the time with excursions where you get out. There was what kayaking this year there was wine tasting, which I believe you did. There was a boat ride to an island and a kind of scavenger hunt. There was some other stuff. I actually don’t remember what all of ’em were. But let’s kick off with excursions. Before we get into the talks, tell us, you picked wine tasting. What was the logic there? And then I guess generally, do you feel like the excursions are a benefit to the event or that you prefer to watch two or three more talks?  

Derrick Reimer:
Yeah, I think the excursions are definitely a benefit. I remember the first few years of going to MicroConf, just feeling almost I’d been sitting in a classroom all day long, not in a bad way. It’s good information coming from the stage, but sometimes it’s information overload and then you’re trying to fit hallway track type conversations in between the cracks and you’re just completely exhausted at the end of the day if you’re maybe more so if you’re introverted like me and a lot of people in that room are, I think so, yeah, the excursions are nice. We go to lunch and then it’s like, alright, you break after lunch for whatever activity you chose. I chose the wine tasting partially because I figured it would just be a good chill environment to sit around and have kind of those ad hoc conversations with folks. Sometimes I think it’s a little more difficult when there’s a big activity. 

And for me, I was like, I don’t know if I want to pack hiking boots and whatever else would be necessary for the more rigorous activities. But yeah, so my excursion, I can say we went into Old Town, tried some olive oil and some wine and it was fun. It was fun to just kind of walk around. And honestly, every time I’ve been on one of these excursions, there’s always at least a small bus ride or something and then you sit on the bus next to someone else and you have a conversation there and then it kind of continues or you kind of cycle around a bit as the excursion goes on. And yeah, I think it’s just a good way to put an around the hallway track. I think sometimes just literally standing in a hallway and having these conversations can feel a little bit stilted, so it’s good to have something to do while you’re having those conversations.  

Rob Walling:
And that’s a good perspective on it. And that’s really why we started. It was like how do we facilitate more relationships in a way that is fun? And we’ve done, there was a hike, right? That was the other one I forgot. But yeah, we’ve done, it’s called beer tasting, what is it? It’s just like a brewery tour is really what we’ve done and we’ve done, gosh, all types of boating and anytime there’s water around, it’s like, Hey, you want a kayak? Hey, you want to get on a boat? So it’s neat to be ax throwing. I think there was a trapeze even here in Minneapolis, Sherry took people to trapeze, which is kind of crazy to think about. But yeah, so those have been fun. And generally we’ve never gotten complaints of like, oh, I wish there were more talks. No one has said that. So that was a change we were going to make in 2020 and then obviously didn’t have the event for a couple years and when we came back we were like, yeah, let’s really do that, kind of change it up. So it has been fun.  

Derrick Reimer:
Yeah.  

Rob Walling:
Alright. So curious to get your take on what you think, having been to a bunch of us events and not the Europe event, what’s the biggest difference or key differences between the two events?  

Derrick Reimer:
So yeah, I would say first and foremost, the location is just completely unique compared to, well Las Vegas where the US event used to be. And then even being in more major US cities, it feels like it has a different vibe, maybe a chiller vibe, I would say being in this amazing old city on the Adriatic Sea, and I think that’s a good thing. I think there’s a certain energy that comes from the US events, and I think that’s partially due to the attendee size too. So there’s more people, there’s more connections to make. The rooms are a little bit louder just because more voices. And at the year event it felt reminded me a little bit of MicroConf us maybe six, seven years ago, a little bit earlier stages of the conference where there’s fewer attendees and you can feel like you can make the rounds a little easier through the room. I honestly felt at us, I’ve been coming so long and there’s an increasingly large cohort of people that I’ve just seen over and over again. So it’s like now going to the US events, it’s like, okay, there’s 30 people that I’ve definitely met before and would love to reconnect with, and that’s almost a little daunting. So being a person based in the US going to Europe, there’s a lot fewer people that I’ve met before at the event. So it feels kind of like an open clean slate to go make new connections, which was cool.  

Rob Walling:
Well, with that, let’s dive into the talks, and we’re not going to talk about every talk obviously, but I like to touch on some key takeaways. I know you astutely took notes because you always take notes, but I was like, Hey, you want our quote a podcast with me after? And I’m sure that’s inspired you to be a little more nerdy on this one. So the event kicked off with KO’s fan favorite Pel Gioni who has done, I don’t even know, man, this is his fourth MicroConf talk. Maybe he’s come to the US a couple times, done some Europe, and he doesn’t really do conference talks anymore, but I emailed him and he’s like, you know what, man, MicroConf, I haven’t done it in a while. I’m going to come out and do it. So I really appreciated it. And his topic was, it was moving from developer to entrepreneur to founder to manager, or I don’t remember the exact details of it, but yeah, why don’t  

Derrick Reimer:
You maker to founder to entrepreneur,  

Rob Walling:
Maker to founder, entrepreneur. Yeah, that’s right. So what were, I don’t know, one or more takeaways that you had from oc?  

Derrick Reimer:
Yeah, he came right out of the gate. I feel like this was a very strong first talk to kind of set the stage. I mean, he in my mind is sort of a mainstay of the community. He’s almost at the Basecamp level of he’s been there, he’s been executing and just doing his thing and obviously doing really well as a company. I think he said there millions in a RR 29 employees. And yeah, he’s obviously been kind of maturing in the way he thinks about business and that’s what came out in this talk. So I think a lot of us are kind of absorbed in the Twitter sphere of people who are trying to often reinvent the way they run their business or trying to just come up with all of the solutions from first principles, thinking of their business as a product. So that’s something that Dy talked about right out of the gate was like, this was a big mistake I made early on was thinking about my business as my second product and thinking, you know what, I’m not going to do what the MBAs do and what people go to business school that’s for big companies. 

I’m a small indie company and I’m just going to do stuff my own way. And I think he has learned over time that often you should just kind of follow the best practices. I mean, management theory is there for a reason. So employees standardized job titles actually because they want something to look reasonable on their resume, should they decide to go work somewhere else and be able to have this transferable experience that’s not just like a happiness engineer or something, but an actual job title. People want to know if they’re getting paid fairly. So what are the salary bands for this role? How do you actually define whether someone fits in a role? So it was very interesting to hear him talk about how he made that progression because I think even if you’re earlier stage, well the earlier you are, the easier it is I think to fall in this trap of now we’re just going to do things differently. We’re just going to come up with our own rule book. So I love to hear this kind of wisdom, this hard earned wisdom from a founder who’s been at it a long time,  

Rob Walling:
Who’s been at it, and it’s not just the number of employees, but he’s been doing it now 15 years. I believe he launched in oh eight or oh nine. And this is the conclusion that pretty much everybody I know eventually comes to is you think you’re going to invent job titles or not have ’em or be, whenever I hear I’m going to do a completely flat org or a democratic org, I’m always like, Nope, good. There’s two in the world that have survived longer than 10 years doing that. It just, we are makers and we want to do creative things. And I love that analogy he said, of your company’s not your product because your product, you have to make a bunch of judgment calls and you’re making stuff up basically as you go along, but your company, there is standards for that or at least frameworks for it. Now I will say that I’ve never run an entire company of 30 people that’s bigger than any company I’ve run. But even at 30, I don’t know that I would have as much process as he does now. Maybe that would be a mistake on my part. Maybe that’s hubris, but I really don’t like process this. I’m not telling you anything 

But listeners, I tend to shy away from it. So I need someone who does bring process because even at a 10 person company, you need some process. And we had no process at Drip because I was just like, eh, this is whatever, we’ll just do the things and it worked, but then it was like it wouldn’t have scaled very well. So there’s this balance. I think Pel D has gotten into the frameworks and used them well. I would almost dial it down a little bit from what he’s done, but maybe, hey, maybe at 30 people, that is what you need. And his learnings are the reason I almost wasn’t going to have a big section in the SaaS playbook about job titles and salaries and management and when to hire managers and how management versus leadership, just all that stuff. And the shock of after we got acquired and seeing a bigger 170 person company, how they operate and how differently it was from us. I was like, oh, there are some really helpful things that smart MBAs know. I’ll discount half of what they know. But the other half is actually quite helpful and the hard part is knowing which half do you take.  

Derrick Reimer:
Yeah, I think there certainly is the risk of overcorrecting on this, especially at different scale. I came away from this thinking like, oh man, I need to be thinking how I could be maybe a little more rigorous about stuff and not just trying to make it up, but I’m also realizing for me, I’m a three person company, so it can still look a lot different. But there’s one kind of overarching principle that he stated that I kind of starred and underlined on my notes. He said, the job of the CEO is to provide clarity, and that takes many different forms. So if you’re talking about a job title or something, it’s like, well, how can you make this as clear as possible so that the employee understands what’s expected of them and you’ve made your expectations clear, you’ve communicated this appropriately. And how do you communicate a product roadmap to your team and how do you communicate to your support people how they ought to respond to feature requests and bug reports and all this stuff? It’s going to look lighter when you’re smaller, but you still ultimately have to provide as much clarity as possible so that no matter how small organization can function well,  

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Rob Walling:
Our next talk was from Andrew Davies, he’s the CMO at Paddle. I assume most people have heard of Paddle and he brought in, it was data-driven approaches to growing your company, right? What were your thoughts on his talk?  

Derrick Reimer:
Yeah, I think he just sort of brought a little bit of his own story into the talk, talking about his experience from being kind of in the earlier stage startup land to now being the CMO of Paddle of big payment processing company. So he had some various tidbits. One thing that he talked about was the kind of general advice in the MicroConf community is raise your prices, always be raising your prices. And he had some nuanced take on that to say, at least in the current climate, he’s finding in the data that just blunt price increases are not working great. And so it’s better to think a little bit more strategically, maybe especially in this current season, about how to segment your pricing, how to maybe play with packaging or add-ons or some ways to say, people who are getting the most value out of these features, you can put them in a different bucket and charge a higher price, but just blanket raising your prices across the board. He’s seeing some pushback against that in the data of not being super effective. And he also talked about pricing localization as a growth driver. Even just this example of expressing your prices in Euros if someone in Europe is viewing your pricing page. And I thought that was really interesting. It doesn’t necessarily change under the covers, I don’t think how your Stripe checkout flow works, but on your pricing page, if you express it in the localized currency, he has seen a nice conversion rate lift. So I thought that was an interesting one too.  

Rob Walling:
Yeah, it’s always neat to have speakers who have a large swath of data and paddle certainly has a lot of subscription and SaaS companies. So I enjoyed Andrew’s talk. One thing I forgot to say at the top when I was kind of giving the overview was this stat about the attendees in the room that I was shocked by. I was so shocked. I asked producer Sonia to verify it, and then I said, can you please show me who responded yes to this? And it’s that 24% of the companies in the room had at least a hundred KMRR.  

Derrick Reimer:
Wow.  

Rob Walling:
At least 1.2 24% shock. I was like, nah, I think they misread that. I think they meant a R. And I started looking and I was seeing the guy and I was like, oh no, I know them. I know them, I know them. So really impressive room to be in, to be honest. And there’s a huge swath that are in the mid to high six figures in terms of a R, it’s a side jack, but I just wanted to mention that of the quality level of the accomplishment of the attendees. And that was evident in the conversations. I have no qualms with someone coming who is pre-revenue, and there were, I dunno, 20% of the audience or something was pre-revenue, which is fine. That’s great. Come and learn and hang out. But if all of the audience or 80% of the audience is pre-revenue, the conversations get a little old looking for an idea. But when people have a business and you can either learn from them, you can hear their war stories, you can maybe give ’em advice from your learnings that that’s the fun of being at a MicroConf.  

Derrick Reimer:
Yeah, totally. Yeah, at risk of this sounding, it’s was all positive or something. That is one thing that I noticed about this MicroConf in particular. And there are ones in the past, I think in the us I think you guys experimented pre covid with starter and growth tracks to try to address the issue of people being at different stages. And I think whether it was by happenstance or just the way that the Europe event has grown over time, it did feel like a pretty good spectrum where there were people ahead of me and people behind me. And those are both interesting conversations to have.  

Rob Walling:
And I like to, in this podcast kind of recap of the event, I like to call out things that went wrong because I don’t want it to be a big puff piece of like, Ooh, wasn’t it great? And everything was great. It was one of the best MicroConf Europes we’ve run. It was in the top two for me personally. And someone asked me, well, what makes it great? And I was like, the attendees, the energy, the vibe, the positivity, and then the talks were all good or better. Usually we do. I mean, usually I spend so much time curating and trying to get, I want everything to be exceptional. That never happens. It just isn’t the way it goes. Even a great speaker has an off talk or an off day, or you’re betting on new speakers and you coach ’em and you do everything you can, but when they get up there, sometimes it doesn’t work. 

So there’s always some mishaps. There’s often logistical mishaps, sprinklers going off in the middle of a room, or small things like the audio popping or the audio qualities, but the room’s too hot. There’s just all things wifi goes out, there’s all things that can go wrong. And I just kept waiting through the event. I was like, don’t say to producer Sonya, wow, everything’s going right. And I’m so surprised. Don’t say that. Don’t say that because the moment you say that, something’s going to go wrong. But I just kept waiting and then we got to the end and I was like, that was one of the least stressful events I’ve run in a long time. And it was just really a really positive event. So I’m guessing that’s how it felt on your end too, as an attendee, I’m hoping.  

Derrick Reimer:
Yeah. Yeah, it was honestly kind of hard to find anything to complain about. It was pretty windy down by the ocean, I’ll say that. Good point. Yeah, you guys couldn’t have turned the wind down, but the sun  

Rob Walling:
Was in my eyes when we were at the evening event. Oh, probably. Here’s one thing that I would do differently is the opening night reception was in a lobby and it was loud and I don’t like loud stuff. So that was probably the one. But I mean, come on. That’s such a rounding error compared to the thing. Totally.  

Derrick Reimer:
Yep.  

Rob Walling:
Anyways, yeah, let’s talk about the next talk was actually because we did excursions that afternoon. And then the next talk was Mr. Omar Zen home talking about 10 things he had learned starting and selling Webinar Ninja. What were your thoughts there?  

Derrick Reimer:
Yeah, I thought it was interesting to kind of contrast Omar with pedi because I think they’re both successful in their own. Obviously Pel has gone the path of the more traditional organic bootstrapping, keep running your company until maybe you want to retire kind of mode. And Omar was definitely more from the lens of, alright, I set out to build something really valuable and I went after it and I hustled. So he started out the gate saying, I intentionally stayed poor while doing this. And I hear the ways that I kind of structured the sacrifices I was going to make in my life so that it was him and his wife. I think they were both part of the business, how they could make this run at building something really valuable and eventually exiting. And he did exit. So it was kind of cool to see a couple of the speakers having this long arc of like, alright, I started, I built and then I sold and here are the lessons that I have. 

So he obviously had 10 of them. I won’t go through all of ’em, but he talked about making it personal, having your, why are you doing this? What is your motivation when things get hard? And that was a good reminder. He talked about hiring. He said, hire slowly fire quickly. Which is something that I think is pretty common wisdom at this point, but always helps to hear it. This just keeps getting reinforced over and over again by people who have been in the trenches for a long time. You talked about evolving your product over time, holding loosely to your product. And this is something that a lot of us hold very strong onto our product and we love it and we love what we curated, but sometimes that’s not what the market needs and you have to be willing to adapt. And so it was just fun to hear these hard-earned insights from someone who made it out to the other side and sold his business.  

Rob Walling:
I really enjoyed his talk. If folks want to see the talks, we do package ’em up and sell them. I believe it’s a hundred or $150 for all the talks. And those obviously get on email list microcomp.com if you want to get notified when those are available. And with that, let’s jump to our next talk, which was Marie Martins from Tally. She’s the co-founder of Tally, and she was on this podcast just, I dunno, two, three months ago talking through her journey, but she told that story with more depth and more details and slides and all that. So what were your takeaways from hers?  

Derrick Reimer:
Yeah, I mean, what a fascinating success story. I remember listening to her on the podcast and thinking, wow, how did they do this? So it was fun to hear her talk even more about it. And I still don’t know if I fully understand all of the ingredients of the success that went into why it worked to Tally. For those who don’t know, it’s this Form Builder product competes with Typeform and they’re managing to make freemium work at really good scale. What do they have? 400,000 free users,  

Rob Walling:
400,000 free users, and they’re building public. So the a RR is what, 1.8 million I believe, and they are fully bootstrapped and it’s just her and her husband and then one support person. So freemium is the driver for them.  

Derrick Reimer:
Yeah, obviously she talked about this on the podcast episode as well, but about their sort of early cold outreach strategy to just hustle and seed the pool of free users. And I’m sure within that got a lot of micro influencers who had audiences or communities they were part of where this could just take hold and spread. She talked about how they latched onto the Notion community in particular. I think their product, she talked about being very aesthetically similar to notion. So people who are in that ecosystem would feel like, oh, this fits naturally with the rest of my tool set. So I think there’s some kind of dynamic there around positioning yourself next to a product that is beloved by a lot of people and feeling like, oh, of course if I use Notion, then of course I’ll just use Tally. And obviously she is a very, very talented marketer, knows how to put her finger on the pulse of what this, at least the initial seed community of people who would latch onto this free product, what these people wanted to see and cause ’em to jump over. So it was inspiring to hear her talk about that. I definitely would love to replicate some of that if I can find ways to do it.  

Rob Walling:
Easier said than done a lot there. There’s a lot happening that’s going right for them that I have a lot of respect for what they’re doing, but man, making that work is one in a hundred or something, you know what I mean? 

And I have a lot of respect for her husband who I got to meet Philip Philippe, I believe, pronounces. But everyone just kept saying, that product is so amazing and so simple and so gorgeous, and so this and that. And so I’m like, obviously he’s a damn good dev. Probably a full, he’s a full set. Cause he’s the only dev on it, so that’s cool too, right? It’s like to me, did you look him in the eye and be like, all right, which of us is better, sir? Which of us is a better full stack? That would’ve been a heck of a, I think if the two of hands touched, does the universe implode because it’s like the two amazing full stack devs? Is that how that works?  

Derrick Reimer:
Yeah, yeah. I think he actually does, she mentioned this in her talk, I wasn’t sure what their division of labor was around design. A lot of times there’s a lot of times it’s a backend front end developer and then someone who does design separate. And it sounds like Philippe does a lot of their design work as well. So  

Rob Walling:
Were you alling him and you’re like, bro, I don’t come from my title. Everyone thinks I’m the best full stack. Don’t even bring it. Yeah. Who’s the full, I don’t know why. I think there’s some has to be some big rival where you both are super chill and super respectful and somehow I want there to be a beef 

Fist fight in the parking lot. So anyways. Yeah, no thanks. I appreciate your sentiments about her talk. It was great to hear the deeper story because in the podcast we can only cover 30 minutes with no visuals, and she crafted it in a way that I really appreciated. Our next talk was an attendee talk. Actually, we only had one attendee talk this year, and it was Tim Vander Castile who submitted a talk about things he had learned building his business. And I hadn’t heard of Tim. And so Tim gets up and starts talking and I’m kind of like, I’m getting tired. It’s the afternoon. And I’m sitting there zone out a little bit, and he’s like, yeah, and then we got our a RR to 35 million. And I was like, whoa. And they bootstrapped and I was like, that’s a thing. And they said, then we sold four and there was an asterisk. It was like, according to public records, I am under NDA, but I can quote a public thing. Then we sold for $300 million. And I was like, what just happened? How have I not heard of this guy? So I was, that was the second slide. I was like, well, now I’m super interested because I just need to hear this story. So with that intro, what was your takeaway from Tim’s talk?  

Derrick Reimer:
Yeah, what a humble guy to be having those numbers attributed to you. I had a chance to talk to him in passing, and my wife actually sat near him at dinner one night and talked to him a bunch more than I had the opportunity to. And he’s just such a normal guy for having sold your business for allegedly $300 million,  

Rob Walling:
Allegedly we’re pretty confident it was at least that is that sentiment.  

Derrick Reimer:
So he had obviously just a 10 minute talk, so three takeaways. But it’s interesting how these sort of dovetailed nicely with both what Omar had touched on and what Pedy had sort of touched on. So he talked about the mistake of being a benevolent dictator for too long early on. You kind of have to control everything that’s happening in your company, but once you start building a team of hopefully people who are smarter than you and better than you at their individual discipline, you start to loosen the grip a little bit and trust your team. So he talked about what he would’ve done differently is empower people earlier and remove himself as a bottleneck more aggressively. And boy do I definitely feel that even with a small team, I think I have the tendency to want to micromanage too much of the business, and even if it’s working on the surface, it’s still, there’s a cost to it. 

My own mental burden and my own managing my own energy can be tough if you’re trying to stay literally on top of every single detail. So that was helpful to hear. He also talked about not thinking enough about culture, and this is something that Pedi talked about a lot. He talked about kind of defining your values and your mission, which again, those sound like very MBA esque concepts that US Bootstrappers wouldn’t want to spend time on, but I thought pedi talked about the benefits of those in a really pragmatic way. Even if your mission is just to stay alive at an early stage, you should state that and everyone on the team should understand that this is what we’re trying to do. And so the way we operate needs to be in service of that. And so Tim talked about, especially as you get bigger, being more thoughtful about the culture you want to craft, that’s one of the few decisions that you do get to make. And the rest, a lot of other decisions should just kind of fall in line with best practices, but you get to choose your culture. So yeah, those are two of my takeaways from Tim’s talk.  

Rob Walling:
And the last talk of the event was yours. Truly, I like to talk on the first day to get it over with, and I can’t remember the last time I’ve talked on the second day actually, but due to scheduling and reasons, I talked last and I talked about breaking through the seven SaaS plateaus, and I finally took that doc that I’ve referenced on this podcast where I have three pre-product market fit and seven, wait, did my talk have eight in it? It had eight, that’s right. I added an extra one 

Because this was the interesting part. Yeah, so I have this document, right with three pre-product market fit plateaus, and I had seven kind of pros once you have strong product-market fit, ways you could plateau. And then those were mostly out of my head and experience and stories and such stories from other founders as well as my own. Then I asked a bunch of TinySeed founders, I have easy access to revenue graphs, so I would look to see where there were plateaus and I was asking founders and an eighth one came up and that’s why I added it. So I guess the title was eight breaking through them. And so I wanted to have, I’ve never presented that material. It’s been sitting in a Google Doc and one reason I never presented, it’s kind of challenging. You can say, well, this is why you plateau because you don’t have enough traffic or leads. 

So the solution is drive more traffic or leads. It’s not actually that helpful to know. So the talk really was to name a framework or at least have to be able to identify. I’m like, I find that it’s helpful for people for me to say there are only 20 B2B SaaS marketing approaches. That’s it. Otherwise you think there are thousands and it’s just like, no, here’s the list. Pick one. Now, maybe I missed one. Maybe there’s 21, but it’s pretty much all of them. So if I say there are eight, is there a chance there are nine? Yeah. Is there a chance there are 23? No, there’s no chance. I know that. I’m not off by that level of magnitude. So trying to codify and get your around the thing is really the goal there. And then I had a story for I guess six or seven of them, like a real life story with a graph that showed someone breaking through the plateau. All that said, that’s the precursor. Did you have any takeaways from the talk?  

Derrick Reimer:
Yeah, I think I know that plateaus are top of mind for a lot of people in conversations that I have at honestly, the last couple of micro comps in particular, I just feel like this is something that a lot of people are coming up against or at least or seeing on the horizon. So I think it’s was really good to get some knowledge out there, at least defining the parameters around the types of plateaus and how to think about fixing them. I know for myself, as I’ve kind of seen plateaus coming in my own business, it’s like, okay, I feel like I could probably be working on many different things. So then the challenge becomes, well, how do you narrow your focus? Because obviously, for example, getting more customers through the door will theoretically solve any plateau if you can just get more customers. But that’s not always the most rational thing to do, just to try to increase top of funnel. So I think this is, yeah, it was just some helpful nuance to think about. Okay, if you look at your churn, is your churn too high? Well then, and you kind of compare that against maybe bands for your industry or whatever, or at your price point,  

Rob Walling:
Like rules of thumb or whatever.  

Derrick Reimer:
Yeah, go to profit. Well, they have a bunch of industry data that you can compare against. And so you can start to use these to hone in and then start thinking about it in a narrower sense of, alright, yes, maybe the answer is get more customers. But also before you try to do that, it’s most rational to think about how to improve retention or how to move out of the churn percentage range that you’re in. I think I’m in a range at a relatively low price point where my churn is higher than I want it to be, and that’s probably just going to be the case because of my price point. So perhaps the solution is think about how do you attract customers who will pay more and that will move you towards a lower churn average, for example. So just some good frameworks I think, to think about this stuff.  

Rob Walling:
Yeah, I appreciate that. That was part of the reason that I decided to do this talk was I see this on Twitter where someone’s like, I’m plateaued. What should I do? And then there’s all this random advice and it’s like you can’t give advice unless you know the Cause. It’s like trying to prescribe a medication when all you see is a symptom. You’re not treating the actual source the actual cause of it. And that was when I realized, all right, somebody needs to get this info out because the thing that I’m going to ask now on Twitter, I’m plateaued. What should I do? I’m going to say, what’s the cause? Which of these eight is it? And if they say, I don’t know, then I’m going to say, you go figure it out and then come back to us and say plateaued because of this. 

So probably next there needs to be a diagnosis criteria of like, well, how do you know which of these eight it is? And I can tell because I see a bunch of businesses, I have the rules of thumb in my head if I can look at your churn or your funnel or whatever, but how do we get those codified in a way that is actually helpful? Here’s the other thing, and I said this, the bleak information or the bleak conclusion is most companies that I see that do hit a plateau don’t make it out. And I think the number of the graphs that I looked through, it was like 80 to between 80 and 90%. Once they plateaued, they just haven’t yet made it out. Now maybe they all will, but it’s like, no, it’s kind of brutal. Yeah, I didn’t know that.  

Derrick Reimer:
I suspect that’s because I think in reality, a lot of the solutions to the plateau involves a pretty significant re-engineering of the business in some way. Whether it’s like tap a new market, add on to the product, or add a second product to your product line to expand your value or going up market, I mean, it’s easy to say and very hard to do because you have to rejigger your go to market strategy and potentially learn new skills or hire new people to do those things. So all this stuff is easier said than done, but it’s helpful to have some foundational frameworks to begin strategizing around it,  

Rob Walling:
I think. So if you’re listening to this and you regret that you did not go to MicroConf Europe, you should come to MicroConf in New Orleans. microcomp.com/us tickets are now on sale, and they are the cheapest they will ever be. The price will only, it goes up every month or two. So if you’re thinking about going, it’s next March 16th through the 18th, that is 2025 in New Orleans, and I hope to see you there. Do you think I’ll see you there, Derek?  

Derrick Reimer:
Oh, for sure.  

Rob Walling:
Yeah. Yeah. Have you been in New Orleans yet?  

Derrick Reimer:
I’ve never been in New Orleans.  

Rob Walling:
Oh, that’s a good excuse to go down there.  

Derrick Reimer:
Yeah, I would be going to MicroConf regardless, most likely. But it’s also a nice little thing to have a new location to check out. That’s an extra incentive.  

Rob Walling:
It is like going back to Vegas again. It’s like, well, I’m definitely not going for the town.  

Derrick Reimer:
I’m  

Rob Walling:
Going for the event. But yeah, we’ve hopped around Atlanta. It was neat to pop in there. It was neat to see Denver. I’ve been there several times. I’ve only been in New Orleans once, so I agree. I’ll do a little sightseeing. I was trying to think of some other places that we could host it that are interesting. Austin, Texas would probably be high on my list, but I think I like the idea of continuing to bounce it around for exactly that reason.  

Derrick Reimer:
Yeah, totally.  

Rob Walling:
Alright, man. Well, thanks so much for joining me on the show today. Folks want to keep up with you. You are at Derek Reimer on X, Twitter, and of course savvy cal.com if folks want to use the best scheduling link on the internet.  

Derrick Reimer:
Indeed. Well, thanks for having me.  

Rob Walling:
Thanks so much to Derek for jumping on the mic with me and helping refresh your memory if you went to MicroConf or to drop some new thoughtful takeaways to you in case you miss the event. Obviously, we’re going to have videos available, as I said during the episode, MicroConf dot com if you’re interested in signing up for the mailing list such that you hear about the video package once that’s around. Thanks so much for joining me this week and every week. I’m Rob Walling, signing off from episode 737.

Rob Walling:
Welcome back to Startups For, the Rest, Of Us. As always, I’m your host, Rob Walling. In this episode, I’m going to be answering later stage questions. I received a ton of good questions on X Twitter a month or so ago when I did a call for them, and I had gotten a little weary of answering the same questions about idea validation and early stage stuff. So these are all folks doing six or seven figures in a RR that have questions ranging from regrets for things you didn’t delegate how to decide to DIY, versus hiring a growth agency, deciding whether a customer type is worth selling to or targeting. And more. Before we dive into the episode, my new course, the SaaS Launchpad, has been live for a few weeks. It has been receiving rave reviews, SaaS launchpad.co. If you want to check it out, it’s for the earliest stage SaaS founders. 

So if you’re looking for an idea, if you want to vet an idea to validate it, if you want to build a launch list, if you want to build an MVP launch your product, this is the course for you. It is the best course I’ve ever put together and it’s really the first course I’ve built in about 14 years. So you can head to SaaS launchpad.co for full details and to check out the course. And one more thing, MicroConf us 2025 tickets have just gone on sale. Every event we’ve run for the past 18 months, I believe maybe more, has sold out and I expect MicroConf US 2025 to be no different. It’s going to take place in New Orleans, March 16th through the 18th of 2025, and right now our lowest priced tickets are available on sale. They will never be lower priced than they are now. We’ve just wrapped up our Dubrovnik event that one sold out, and again, I expect this New Orleans event to sell out. All the details are at microcomp.com/us. Be sure to check it out soon if you’re interested in joining me. And two, 250 of your best founder friends that you’ve known on Twitter that you’ve met in person that you’ve aspired to meet in New Orleans next March. 

My first question for today comes from Tobe. He is Tobe builds on X Twitter. His question is, is there anything you regret doing yourself instead of delegating while trying to grow to 10 KMRR? And I’ll do you one better. I won’t just talk about things I regret, but the most common mistakes I see early stage founders making, and these are founders who listen to startups, For, the Rest, Of, Us, these are TinySeed founders, these are MicroComp founders, and there are some pretty common anti-patterns in this early stage of learning how and when to delegate. Now, delegating is a balance, especially in this early stage if you’re bootstrapping, because oftentimes you should delegate or outsource a bunch of things, but you don’t have the money, right? You don’t have the luxury of a funded competitor who can hire a chief of staff on day one or who can hire a staff to do things that you don’t want to do. 

So there is this balance between your willingness to delegate and the budget you have to do so. But with that said, I think a couple things that I commonly see founders keep doing that they shouldn’t be doing in these early stages are things like bookkeeping or doing your own books in general, doing your own accounting, not hiring a CPA DIYing your own legal. This is one that I did a couple times. I never knock on wood, wound up regretting it, but certainly things that I could easily ever regretted. It had those gone sideways when I downloaded a template for a contract and edited it myself. I think founders who are doing audio video editing in the early days are doing themselves quite a disservice. Audio and video editing are so fulfilling. I dunno if you’ve done it, but it just feels like you’re getting stuff done. 

You’re doing something with your hands and when you ship it, it’s a better end product. It feels really good to do, but it is a tremendous waste of time because audio and video editors even really good ones are what, 15 to $30 an hour? I mean, obviously more expensive and less expensive, but this is an easy one to outsource. Another one that I see founders doing and kind of making a reason for it is continuing to handle their email and live chat support. Now this one depends because if you’re doing high touch sales with a high ticket product and you’re only doing a few sales now and again, then you probably don’t need a support person. But if you do have a wider funnel, lower touch funnel where you have a lot of volume coming through, email support and live chat support if you offer it are some of the first things that I look to outsource. 

Now, the reason I hear a lot of founders keep doing it for way too long as well, it’s only 30 minutes a day and I want to be in communication with my customers. This is the way I keep in touch and get their feedback and hear what should develop in the product. Now, both of those are kind of reasonable. However, I will say that with pretty much every product I’ve launched, I have hired part-time support help. Sometimes that part-time support help would swing across multiple products I owned. Sometimes I would just overpay them for the hours they were working to say, look, you get a minimum of 10 hours a week. I know I don’t have 10 hours of support yet, but I’m going to bring you in and you can write KB docs or you can help with onboarding or there’s a ton of other stuff that I can find depending on your skillset I can find for you to do to kind of fill that time. 

So even if you don’t have a ton of support or it’s sporadic, I’ve always figured out a way around that. So I just don’t believe it as an excuse because it’s never one that I’ve used and I’ve always outsourced support within a few months of taking over or launching an application. The other thing about not being in touch with your customers is that I tend to be known for being in really close contact with my customers. Whether I was running SaaS companies or now MicroConf, TinySeed writing books, I talk with people a lot and putting a support person between me and all the end users did nothing to curb that. It did nothing to dissuade me from talking to and hearing from my customers because my support guy, Andy would say anytime there was new feedback, new input, anything he thought was novel or that I should know, he would either cc me on it or he’d just sign it to me. 

Once it was resolved, any of the rote tasks or the rote responses that he could just hammer out, he would get back to ’em. He would close. I didn’t need to see over and over that someone wanted to reset their password or someone had a question about pricing. Now, if those questions came in a lot, Andy would then say, Hey, a lot of people having questions about pricing, can we clarify this on this page? So there is a key factor here of hiring someone in that support role who is good and is willing to escalate things to you or at least pass things along that they think are notable. Another thing that I regretted, I remember regretting this in the days of Drip was continuing to handle social media for my products. It’s not that I should have hired it out, I just don’t think I should have done any of it. 

I really don’t. Social media did so little for us as a SaaS tool. We were not Intercom and HubSpot and Salesforce. We were a tiny bootstrapped product that was growing and social media was nothing but a headache if you want to know the truth. And if it drove five customers in the entire history of the company, I’d be shocked. And so what I would do these days, I would just get off social media. I wouldn’t try to hire someone for it. I wouldn’t use it as a marketing approach. For now, I would focus on blocking and tackling on SEO, on content, on sales, on real inbound marketing, on integration marketing, on attending live events, on going on podcasts, on talking to my customers. There’s so many other things that I would be doing to not waste time because social media is a distraction that masquerades itself as productivity, and people justify it by saying, well, I’m working well, I’m marketing. 

No, you’re not. You’re not marketing. You’re getting on social media and you’re frankly feeding an addiction that these apps are really good at feeding and they have entire teams engineered to make us feel this way to make us feel productive when it’s actually a distraction. So if I were just starting out today, I would focus on marketing and sales, and I would ignore social media altogether until such a point that it became important. And frankly, there are TinySeed companies doing millions of dollars a year that still have almost no social media presence. So it is not only possible to get there. I would say it is easier to get there if you’re not focused on that distraction. And lastly, the thing that you’re going to have to weigh as a bootstrap founder is the next sentence I’m going to say, which is, I know some devs and I was in this spot where I regretted continuing to write all the code. 

Now, some devs bootstrapped because they want to write all the code, realize that will probably hamper your growth. But if you’re okay with that, that’s why you’ve bootstrapped. So you can be in charge of this and you can dictate the limits or the constraints that you’re willing to put into your business. But I believe that code is usually a certainty. Code is something you can hire someone to do because that next feature does not have any risk versus marketing. And sales usually have a ton of the risk as well as product like deciding what to build, how to take feedback in, how to find product-market fit, all those things are very risky. Those are things that founders should be focused on. I do know some developer founders who continue to write code well into the millions of a RR and even tens of millions for that matter. 

But usually, inevitably they do step away from it because they realize at a certain point it’s just not the best use of their time, even though they love doing it. And to cap this off, Tobe didn’t ask this question, but things that I never regretted doing or spending time on and I never regretted keeping under my purview and not outsourcing, we’re talking to customers constantly. We’re designing the product, and I don’t mean visual design, but deciding what to build, how it was going to operate, how are we going to architect this? What’s the API going to be like the real nitty gritty decisions around building the product. And the third is marketing and sales. I don’t know of a seven or eight figure TinySeed founder that has outsourced or delegated their marketing and sales before they hit a few million in a r. Now, a lot of folks may hire ahead of growth or ahead of marketing, but it’s to take over an effort that’s already in play. 

You’ve heard me talk a lot on this podcast about zero to one and how hard that is as a marketer or as a salesperson and as the founder, I’m a staunch believer that you need to keep that under your own purview until you’ve proven it out and you’ve built it into a process that can be handed off to someone else. So thanks for that question Tobe. I hope it was helpful. My next question is from Miguel Sarena. And Miguel asks, how do you decide to do it yourself versus hire a growth agency to do paid ads, SEO partnerships, et cetera? So this actually piggybacks really well on the last point that I was making is that in general, there are a few roles in a SaaS marketing department, right? There’s marketing strategy, which is deciding, I dunno, what do we try next? What do we do next? 

Where do we put our efforts? So it’s very strategic thinking. High level. There is marketing implementation, which is where you’re an individual contributor and you are clicking the buttons in the Google AdWords console. You are writing the articles or editing the articles and building links and doing that work of SEO or in terms of partnerships, you are going out and building the relationships yourself and getting all that done. So those are individual contributor roles or folks who are actually boots on the ground. And then the third role really is project management, which is kind of making sure everything gets done and there’s more nuance than this, but fundamentally, that’s how I think about a SaaS marketing department, especially in the early stage. So the question of how do you decide to DIY versus hire a growth agency is that as the founder, I would not try to outsource marketing strategy and frankly, project management, maybe I would hire somebody to do it, but realistically, marketing strategy, deciding what to do in what order, how many resources to put behind it, that’s something that me as the founder, I would want to learn how to do. 

In the old days when I was truly, truly bootstrapping and had almost no money, I then had to go learn the marketing approaches. So I also was the Google Ads person. I was the person doing SEO, I was the person doing partnerships. That’s what I had to do. Now, if I’d had any funding, I would’ve hired out those individual roles. And so these days, if you have any modicum of money and you can pay someone who really knows Facebook ads or really knows Instagram ads or really knows Google ads or LinkedIn ads or Twitter ads, I like coming up with the strategy and then hiring someone to implement that specific approach. And the reason is is that if you try to learn it and you try LinkedIn ads and they don’t work, you don’t know if you’re not good at them or if they don’t work for your business or your customer type. 

But if you hire someone who you think is pretty good and you get references and you pay them a couple grand a month for three months and they run ’em and it just doesn’t work, you at least have some modicum of confidence that LinkedIn ads for now probably aren’t the best fit for your business. And so individual contributor marketing roles and sales roles, frankly, like S-D-R-B-D-R stuff are things that I consider hiring out before a million, 2 million, 3 million. And when you’re on a budget, let’s say you’re doing 20 KA month, you don’t have the money to hire an amazing growth marketer, but you might have the ability to hire a freelancer who’s good at SEO or a small micro agency who knows how to do Google ads or LinkedIn ads, or you could hire a part-time biz dev person, which is a head of partnerships to handle those for 10 hours a week of work where they’re focusing on doing that. 

Now, that still means that you are saddled with the strategy and potentially the project management, but that’s the way that I see it working, trying to outsource marketing strategy when you haven’t gone from zero to one yet. I mean, you’ve heard us talk on this podcast. I’ve talked with Derek Rimer, I’ve talked with Ruben Ga as I’ve talked with Craig Hewitt, I’ve talked endlessly on this podcast solo, and it’s just the pattern that I see. People aren’t able to hire out sales and marketing before they get to a repeatable process. And usually that’s when you’re in seven figures of a RR. So thanks for that question, Miguel. I hope that was helpful. Are you drowning in challenging tech decisions? You should check out today’s sponsor tech stack. Unlike typical staffing agencies, these folks are startup specialists. With over a decade of experience in startup software development, tech stack can help your startup build an MVP that’s designed for explosive growth, rapidly expand your team for new features or optimize your existing code base for peak performance. 

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My next question is from Casper Vaughn Reed. Casper indicated their SaaS is doing $17,000 in MRR and asks. I have a product that caters to one-time events. It allows you to create scoreboards and leaderboards and often gets used for seasonal sports and corporate events. Revenue growth has been good around five to 10% month over month, but it’s mainly come from one time transactions. My question is how do I build up a healthy subscription business? I used to have a monthly subscription, but MRR peaked just below 10 K, 90% of my subscriptions churned giving one-time use as a reason. Can I fix it? Do I even need to fix it? Hope this question is an interesting one. I like this question because it really does call out the thought that not every business should be a subscription business. And there are some businesses or some apps or tools or utilities that people may only need to do once or once integrate while maybe it’s once a quarter, once a year. 

And those types of businesses are much more difficult to turn into subscription companies for obvious reasons. So one option is to just not worry about it and to take your 17 KA month. And I guess I said at the beginning of this question that it was 70 KMRR, and that’s not true. He wrote it’s 17 K of monthly revenue. And so I said MRR, because of course I think in SaaS and everything’s MRR, but in this case it is monthly revenue. Take your 17 K and enjoy it and use that to stair step your way up to recurring revenue. That is one option. Another option is to do what a lot of SEO keyword tools have done. When you think about people doing SEO keyword research, if you’re not an agency and you have one website, you often need to do keyword research infrequently. Maybe it’s once a year, maybe it’s once a quarter, maybe it’s once every six months. 

And so churn in those tools can be high. So what have those tools done? Well, they’ve built in things that you would use on a weekly or monthly basis, rank tracking to see where you rank for the keywords that you’re trying to rank for website quality monitors or the SEO monitoring of your site to say, oh, you have broken links, you’re missing these tags to keep everything up to date and in sync and operating well, any type of thing that someone might want a recurring use out of or that they might want to monitor or use on an ongoing basis is one approach to trying to become a subscription tool when you’re currently a one-time use tool. Another way that I see bigger companies doing this is they say, you can only pay annually and you get a year subscription for X amount of dollars. 

And that’s really a tactic that you can use for this. Personally, I don’t love it. It just feels a little like Verizon making their pricing impossible to figure out so that you can’t actually price compare between their own plans and the plans of their competitors. But that certainly is one way that people fight churn is to only sell annual subscriptions. And the problem is there’s problems with it, right? Your customers might get a little miffed if there are other options that are one-time use that are cheaper, they’ll go use them. They will often complain, oh, I used it once and then maybe potentially do a chargeback, ask for a refund. There’s a bunch of challenges with that, but it is an option that I wanted to throw out in the spirit of brainstorming and getting all the ideas out there. And I think from a high level, those are probably the three things that I would consider. 

And probably in your shoes, I would try to make this subscription by building other stuff and seeing if it works. If I had the energy and the excitement and the motivation to do it. And if it doesn’t work, then I would do plan A, which is just leave it as one time and use that to stair step your way up. I don’t know if it’ll work or not. I don’t know if there are other features, other things you can cater to that these folks are trying to do on an ongoing basis. I just don’t understand the business well enough. And if you have absolutely no ideas for how to do that and you’ve asked your customers and they have no ideas for you and you ask your mastermind or a co-founder or an advisor or your spouse or a good friend or this podcast and no one has any ideas, then yeah, there are tools that really just shouldn’t be subscription. 

And that may be the case. I of course, always like to at least try to invest some elbow grease into it. First, I actually did this with T net invoice back in, I dunno, whatever, 2005 or six where it had peaked. It was a one time sale as well, $300 one time with like 20% maintenance a year, and it had peaked between three and 5,000 a month. And so in any given month it was great. It was making my house payment plus a car payment, which I didn’t have because I had big cash for the car. But you get the idea. It was just a nice side income. As I worked full-time during the day and I really tried to grow that business, I was like, I want to get it to 10 K, 12 KA month so that I can quit my day job. 

And I spent about a year nights and weekends trying to do that before I realized this is a step one business. Now that term didn’t exist then hadn’t come up with the STA step method. That would be what, seven years later maybe. But in retrospect, it was something that I never regretted putting that time in and trying to grow it. I learned a lot during that time about what worked, what didn’t work. And when I got to the point where I was out of ideas and out of motivation, then I put it on autopilot and autopilot’s not real realize every 18 months Google would slap it. A competitor would come up, something I’d need to update the code. There were all these things that would happen, but as autopilot as you can make it. And then I moved on to my next thing, and that is actually when I built out a portfolio of products. 

Now with a portfolio of products, never try to grow more than one at a time. You focus on one, you get it to grow, and you get basically that recurring traffic that then builds hopefully recurring revenue and then get it to the point where it’s stable and maybe you autopilot that one too. And so I stacked a bunch of step one businesses to get myself to step two, to buy out my own time, quit the day job, and then I moved on to true recurring revenue with step three. That tends to be my approach is to try things that I think could work that I have the motivation to do and that I think I can learn from whether they work or not, whether they fail or succeed. At least I’ve learned to something from that. So that would tend to be the approach I would take. 

But you of course can look at your own personality and say, do I want to do that? Do I want to try to make it subscription? Or do I just want to take this amazing revenue that is generating and use it to build that standalone SaaS or true recurring revenue? Thanks for that question, Casper. I hope it was helpful. My next question is from Benjamin Hoy on X Twitter, how do I decide whether a customer type is worth selling to or targeting? I have consumers buying my SaaS, but also schools contacting me and occasionally small businesses. How do I decide whether targeting one or the other is worth it? In my experience, you just have to try. So first of all, there’s a difference between selling to and targeting, selling to if they’re approaching you inbound, what’s the real risk there? The risk is a school approaches you says, we want to buy it. 

And you say, great, it’s $500 a month or a thousand dollars a month. Make sure that you charge enough, by the way. And if it’s a school actually charge per year. So 6,000, 12,000, 25,000 a year, whatever you’re going to charge, charge enough to make it worthwhile. And you send them this quote and you can read founding sales by Pete Kanji or you can follow Jen Abel, Matt Ock, Stelli fte, some of the sales folks in the SaaS space and learn, Hey, how do I kind of navigate this? And if the school comes back and says, well, we need you to sign a big security checklist or fill out this 30 page doc to close the deal, then depending on what you’ve charged, do you know if you’ve undercharged and you need to turn down the deal, or if you’ve charged what 30 grand a year, then it becomes worth your time to fill out all of that and deal with procurement. 

So that’s the real danger is that you get into a sales cycle or a sales process and you realize it’s more headache than is worth it. And frankly, it’s going to be hard to know until you try it. The biggest thing though, whether it’s schools or small businesses, is charge enough to make it worthwhile. So charge a little more, especially if you’re resistant to doing it, charge a little more, charge a lot more than you think you need to. And if they say no, what are you out? Nothing. A conversation. And if they say yes, make sure it’s worth it. My dad, who was an electrician for 42 years and became a project manager, used to say, there are no bad jobs. There are only jobs without enough money in them. And what that meant is no matter how grindy a project was, if you had enough profit in that, then it was worth it. 

Similarly, when you’re selling to schools or businesses or enterprises, there are no bad deals. There are only deals that aren’t worth it. You didn’t charge enough. I will tell you that most small businesses what they have a single decision maker, they’re relatively easy to sell to, but if they’re non-technical, I dunno what your product is, if they’re non-technical, then there can be the onboarding headaches, right? This is customer pain versus competitor pain. And so you get to decide. But if you have consumers buying this, you probably already have that. I can’t imagine selling to a small business, that process is going to be very different than selling to an individual. Schools might be different, although private schools and language schools in that tend to operate like small businesses where they are a for-profit and certain people, managers or whatever have credit cards and they often buy a small business. 

If you get into public schools, K through 12 universities, the procurement and all that can be an annual seasonal budgetary cycles. There’s several TinySeed companies that deal with this, and it is a bit more of a pain. But for me, if I were trying to decide whether to sell to them, if they’re already approaching me, I would give it a shot a few times and see what it’s like. Targeting them is another question. Targeting them implies you maybe update your positioning, your H one or you at least add some landing pages. You start doing some SEO for the terms they’re searching for. Do you buy ads? You start marketing to these as an additional ICP. Right? Now, your ideal customer persona or ideal customer profile is consumers. Adding schools and small businesses as additional ICPs can be good. It can be good, especially if you can charge more, right? 

What if you have a personal plan and you have your small business plan and you have your academic plan and whatever. They have different pricing and they have different features, and they have different amounts of the value metric that you’re using if you have one. And that does allow you to segment your users and segment that process. And then maybe schools get a demo, and if they’re a one call close and they pay you enough, it’s worth it. And maybe consumers and small businesses don’t. There can be some benefit to it. Now, the flip side of that is, well, don’t you want to focus on a single ICP? There’s arguments on both sides. I have had businesses where there’s one, and I’ve had businesses where there were three or four drip actually launched with four different ICPs and we actually narrowed over time. So I can see it both ways. 

And again, in your shoes, I would ask myself, am I interested in potentially making more money and learning more about how to deal with other audiences and other ICPs potentially growing this business, making it a better business? Because certainly consumers are not going to pay as much as schools and small businesses. I’d ask myself, do I want to do that? Do I want to learn it? And my answer of course would be yes, because I like trying new things. I’m a maximizer and I’m someone who likes to learn things. So that’s my take Benjamin. Hope it was helpful. And with that, this episode will come to a close. Thanks so much for joining me this week and every week. It’s always great to be on the mic with you. If we’re not connected on X Twitter, which is where I asked for these later stage questions. Let’s connect. I’m at Rob Walling and of course if you have later stage questions, feel free to ping me on Twitter or send them to questions at startups For the Rest Of Us dot com. If you have early stage questions, feel free to send them there as well. I have a decent backlog of those and someday I will get back to them. Thanks for joining me again this week. This is Rob Walling signing off from episode 736.

Rob Walling:
Welcome back to another episode of Startups For, the Rest, Of Us. I’m your host, Rob Walling. In this episode, I’m going to talk about the eight levels of platform risk as well as the three factors that contribute to platform risk. And I’m not just going to talk about the traditional, I have a Shopify app, or heaven forbid, your WordPress web host this week, but I’m going to look at platform risk from a sense of any type of reliance on an external platform. So if you use SendGrid to send email, how does that factor in? If you use AWS for your hosting or you use an open source package like WordPress, and honestly, this is a framework I came up with a few months ago and I jotted it down in a Trello board. I keep for a podcast episode topics, and I was just going to pull it out at some point, probably put it in a book, I’m sure talk about it on the podcast. 

And then the WordPress WP Engine kerfuffle flared up by now, that’s a couple weeks old, but it did remind me that I had this and had never really done a full refinement on it. And so this podcast episode is a way for me to kind of bring that out and talk through my thoughts of platform risk as I see it, especially it’s probably any startup, but realistically, there’s a little bit of a B2B SaaS bent to it, right? Because that’s the 191 investments I’ve made. And so I’ve seen different forms of platform risk blindside companies in different ways, and that is the basis for today’s episode. Before I dive into that, tickets for MicroConf New Orleans are on sale. You can go to MicroConf dot com slash us if you’d like to grab your ticket. The event is being held next March of 2025. Speakers are yet to be announced, and of course, I will be there in New Orleans. And if you want to get together with about 250 of your favorite bootstrapped founder friends, head to MicroConf dot com slash us. The tickets right now are the least expensive they will ever be, and they will go up in price, I don’t know, in a few weeks or a month or whatever. In addition, we are going to sell out. We sold out our Europe event, I believe we sold out at Atlanta last April. So if you want to get a ticket, there is no reason to wait. microcomp.com/us. 

Let’s dive into platform risk. So I’m going to start with these three factors that contribute or define platform risk. And each of these you might think of on a scale, whether it’s one to 10 or one to a hundred, there can be a small amount of risk for a specific factor or a large amount. So the first one I think of is a replacement. So if you are on a platform, whether that is using SendGrid to send email, whether it is hosting on AWS, whether you built a no-code app in Airtable or Bubble, whether you are a Heroku app or Shopify app, is a replacement available for this platform? And how hard is it to switch? And is the pricing approximately the same? So there are more questions than that, but those are kind of the high level, so it’s replacement. So we might think of, well, what is an easy replacement where it’s available? 

It’s not that hard to switch and it’s a commodity, so the pricing is the same. Well, that is something like I would say SendGrid postmark, mandrel mail gun. The switching cost is real. It is a thing, but it’s connecting to a new PI. And it depends on how deeply you’re integrated, obviously, but that switching cost is not catastrophic. And pricing in that space of sending email or even SMS, I think of Twilio and the cajillion, SMS APIs out there are a lot of replacements available, so that’s going to be a much easier spot. But what if you are built on Shopify’s API and you’re in the Shopify app store? Is a replacement available? How hard is it to switch? And is it priced the same? Well, the pricing doesn’t necessarily make sense in that context, but is a replacement available? How hard is it to switch? 

It’s kind of like, no, there really isn’t a replacement. And switching is basically impossible, right? Because if you were just a Shopify app and you’re like, well, they kicked me out of the app store, or they took my API access away, it’s like, well, we can go build a BigCommerce, a Magento, a WooCommerce version, but it’s not the same. It’s not a replacement, and that’s not really switching costs, that’s just building spinning up a whole new product. So the hard to switch is just astronomical. So when we think about replacement from one to 10 or one to a hundred, that takes you from easy to hard, at least in my mind. So the first factor was replacement, second one is customer concentration. And the question here is, are the majority of your customers on this platform, meaning that if you were kicked out or the API access were shut off, or somehow the platform suddenly said, you’re on Twitter’s API, and they say, we need you to pay us $12,000 a month. 

Now to maintain it are 80%, 90%, even 70, 60% of your customers on this platform in a way that essentially will decimate a huge amount of your revenue. Now, what’s interesting is this is separate from the third factor, which is I’m saying lead flow or customer flow. That’s on an ongoing basis receiving new customers, say from an app store listing or a marketplace listing. And that’s different, it’s related, but it’s different than customer concentration because in theory, I could go build a Twitter client, I could be getting zero lead flow from Twitter, but a hundred percent of my customers could be concentrated on Twitter or on Facebook’s API. Again, if I’m an app that postponed, for example, that helps you post to Reddit, Instagram, Facebook, Twitter, and all those Grant, he’s a TinySeed founder, started Postpone and it was just for Reddit. And so when we funded him, we said, your customer concentration is basically a hundred percent Reddit. 

We think you should diversify into other platforms. And he was already on board with that. So now he has a little more diversity across the different platforms. Now, great example with Postpone. Does postpone receive any lead flow from being in a Reddit app marketplace? No. So you can have concentration and you can have the risk of that concentration without the lead flow, and you can have the lead flow. I guess in theory, you could have, let’s say I was on four platforms. I was like Shopify, BigCommerce, WooCommerce, and Magento, and I had 90% of my customers on Shopify and only 10% across the other three. But let’s say the other three were sending me a lot of leads, I just branched into ’em, and usually this is not the case. Usually actually branching into other platforms is a lot harder than you think. We’ve seen Tiny, I’ve seen TinySeed companies and non TinySeed companies try to do it and it can work, but in the majority of cases I’ve seen it hasn’t worked. 

So the example there though was to say you could have lead flow in those three smaller non Shopify apps, but not very much customer concentration kind of still early. So these three of is there a replacement, customer concentration and lead flow are the three factors that I think of when I try to rank order these levels of platform risk. So now that I’ve defined these three factors, the contributing factors of platform risk, I want to walk through the eight levels of platform risk, and I will talk through the contributing factors and how they relate to each of them. Interesting data point. As of a week or two ago, I had seven levels of platform risk, and the WordPress WP Engine kerfuffle basically begged the question of, well, let’s say you are built on WordPress, what’s the platform risk of that? And there’s different things. WP Engine uses WordPress and they’re a web host, but what if you had a B2B SaaS company that was built on WordPress as the core, so it was kind of a no-code thing hacked together with plugins. 

That’s almost a related, but a different question. And so I added that as another layer. The answer of course is always, well, it depends on a lot on the specifics of how you rank these. All of these are valid levels. It’s just comparing being built on WordPress versus being hosted on AWS. I have ordered those in a certain way, and I think in different situations they could be swapped a little bit, but to me, this list is directionally correct and it takes those three factors and applies it to a bunch of different scenarios that I’ll give examples of. So moving from least amount of platform risk, what I consider the least amount up to the most amount of platform risk, basically where you have the most exposure and the most risk of your business being killed. And so I’m going to go one through eight again, where one is the lowest, eight is the highest, the most dangerous level one is almost no platform risk. 

It is where you own your own server in a cage with redundant power, you run your own SMTP servers to send emails. The platform risk here is any development language you use, right? Plus your internet service. I mean, basically you are not reliant on a host, you’re not reliant on anything to send email. You’re not built in no code. I guess your oh, and your risk there is where are you getting leads from and do you have customer concentration and where are you’re getting leads from? And in this case, I’m assuming there’s just almost none, right? You have this great variety of leads coming from all over the place, and there’s no customer concentration in terms of them being reliant on an external API. So this ones, it’s so unrealistic, I just kind of want to skip by it. None of us are going to do that, right? 

The second level of platform risk, I think of it as you being reliant on a platform that is a relative commodity and it’s easy to switch away from. Again, relatively easy. I know we could make an argument, I’m going to say SendGrid and Twilio, an SMS provider, email provider, those are commoditized and they are relatively easy to switch. There’s no lead flow, there’s no customer concentration. It truly is just a replacement decision. And one might say, well, SendGrid integration will take you months to migrate away from. Usually that’s not the case. Usually it’s a couple of weeks. I believe we did this with Drip because we went from, we had three or four different email providers that we were using that were APIs that sent emails, and it would take us a matter of weeks to switch, and we were sending hundreds of millions of emails a month. 

So again, this is why it’s probably the most realistic one that a lot of us are exposed to, and this is where it always bothers me. I’ll be on X Twitter and someone will say, oh, man, you build on Airtable or Bubble and there’s platform risk. And some smart outlet comes in and says, oh, yeah, well, you host on AWS and that’s a platform, and you send emails through SendGrid, and so that’s also a platform, and you have risk too. And it’s like, but they’re not the same. And that’s the point of this list is to have them in order of increasing risk or exposure. And I think being reliant on a commodity, whether it’s hosting or whether it is an API of some sort, I think at the same level as imagine if you have a VPS or you have a Docker container and you’re on commodity hosting somewhere, and you can basically just pull that and spin it up in, I don’t know, half a day, a day, two days, whatever. 

It’s that relatively low switch in cost and it is commoditized. I think that fits in this category as well. So the third level of platform risk, which is just a little riskier than the one I just is when you’re using these large cloud providers, Amazon Web Services, Google Cloud, Azure, this is where you still don’t have customer concentration or lead flow, that’s irrelevant. Obviously those are more dangerous. And so those are in the higher levels of platform risk, but moving away from A-W-S-G-C-P, Azure, whoever else, it’s not just spinning up a Docker thing and moving the VPS or whatever. I think the switching costs is significantly more than moving away from an API, like a SendGrid or an SMS because this is the infrastructure where your entire app is, and you start to get reliant on a lot of services. And so this one also has a varying degree. 

It’s a slider of like, well, if I’m only using an EC2 instance and everything’s there, then maybe low-ish switching costs. But by the time I have auto scaling and I have six different types of servers, I have the front end and the API and I have a database and I have Redis servers and I have sidekick workers, and I am using Amazon’s not proprietary, but they’re more like the Redshift thing, and I’m using a bunch of stuff in Amazon. Switching away from that at that point becomes very, very painful and migrating to another platform. You just, again, that’s why it’s the third level I think a platform is. Now, if it’s such a pain to switch, why do I think the risk is relatively low? Because at least to date, A-W-S-G-C-P and Azure are not, they’re not in the business of being aggressive. They have no motivation to, their business model is selling you stuff for a certain amount of money, and so they want you to be happy. 

They keep rolling out new stuff, they keep dropping prices. It’s the opposite of, I’ll get to it in a second, but the no-code providers where they keep raising prices and where any of those could go out of business any day, and they’re not profitable. For most part, I think most of the no-code providers have raised a bunch of money and are still not profitable. And that’s where Judgment McCall like A-W-S-G-C-P and Azure, I don’t think are going to be aggressive and make people want to migrate off, unlike other startups that are still in that early, say, monetization or growth phase. So that was the third level, which was medium to higher switching costs. There are replacements available, again, A-W-S-G-C-P, Azure and others, but there’s no lead flow or customer concentration. 

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The fourth level of platform risk is the one that I added for the WordPress kerfuffle. And here’s an interesting thing. I have an open source software like WordPress, and so that’s kind of vague as the fourth level. Here’s the thing, there’s no customer concentration, there’s no lead flow. The question is, is there a replacement? Is it easy to switch and is it priced the same? Well, open source software doesn’t have to be free as in price, free as in beer, but most of it is, I think the majority of it is. So price is probably less relevant. The question is how hard is it to switch and is a replacement available? And the further question that begs is, well, how deeply are you integrated? If we look at WP Engine, that is obviously reliant on WordPress. Couldn’t WP Engine just fork the WordPress code? I believe it’s GPL, right? 

They fork it now, I guess then there’s a whole plugin ecosystem. I don’t know what happened with there. So that’s an, I don’t know. It feels like there’s risk there, but they have options. If you were a SaaS company and you had built your entire SaaS or your, I guess no low-code SaaS or your entire productized service, say around WordPress, and suddenly WordPress changed their licensing or they, I don’t know, broke all the plugins that you use and they just broke your business, what would be the replacement for that? Well, you’d have to go and build it somewhere else, right? You’d have to go build it in no code, have code written, do it manually. I don’t think a replacement in this case, it’s the job to be done. I know Ghost is similar to WordPress, but the job to be done of what you’ve built in WordPress, I don’t know that it translates so well to just another CMS. 

And so this one’s interesting in that longer term, I have this at four right now, meaning it’s higher risk than say your A-W-S-G-C-P or cloud provider. This would’ve been probably down around two or three before the WP Engine, WordPress kerfuffle, and this is how weird these things are, is that given that WordPress has shown that they are going to be aggressive, not making themselves out to be a friendly platform right now. And so I think that is why for sure I kicked them up in terms of the actual risk, the big question is if you had a business built on WordPress, how hard would it really be to switch? And if oh, in a week or two we could build it in bubble, then this really should probably be down more around SendGrid. The number two right SendGrid SMS providers are where it’s a commodity and it’s easy to switch. 

That’s more of how I would feel about it. But if your business is a 2 billion business that completely relies on the plugin ecosystem and you’re at the mercy of WordPress than I do think that there is a significant level of platform risk. So level five is high switching cost, but there are replacements and there’s no lead flow or customer concentration. The best examples I can think of here are no code. It’s building on Airtable Bubble. I was putting Stripe in there. I don’t know that Stripe fits or doesn’t. I guess switching from stripe’s kind of a pain. And I guess it depends on are you in their subscription ecosystem as to whether it’s like a medium or a high switch in cost. But in any case, this is where in order to switch, you kind of have to rebuild everything from scratch, right? There is no export your code from any no-code platform I’ve heard of. 

And if you could, how do you import it into a different platform where it’s all just proprietary tech, right? And this again, is where the argument that some no coders make or just some people make is like everything has platform risk. And it’s like, yeah, but they’re not all the same. It gets worse if you’re a Shopify app, there’s a super aggressive platform that’s worse than all the ones that mentioned so far, and we’ll get to that one in a minute. And so the idea here is that if you’ve built a million dollar business and it’s a bubble app, how long would it take you to completely rebuild that in another platform if bubble 10 x their pricing if bubble went out of business, if Bubble had two weeks of outages and one might say, well, couldn’t AWS 10 X their pricing? Yeah, highly, highly unlikely. 

I just don’t see it. That’s not been the pattern. But what about AWS going out of business? Highly, highly unlikely. And that’s why I put ’em down at the two level and is AWS going to have a two week outage? Again, highly, highly unlikely. A small no-code startup is more likely to have any of those black swan ish events happen. And that’s why I have them at number five. Coming in at number six, I have all your leads coming from a single marketing channel such as Google. So basically it’s 100% lead flow risk. Now, I’m not including app stores in this like app marketplaces I will get to those are seven and eight, but in this case, I’m thinking of being solely reliant on a single flow of leads. And I think is that a platform risk? I do think there is risk there. There is no replacement usually, right? 

There’s no direct replacement. If you rank in Google and you get amazing organic search trying to replace that with something else, switching costs is irrelevant. You can’t do it, right? Customer concentration is irrelevant because they’re not reliant on Google once they come through SEO, but your lead flow and your plateauing feasibly, it could kill the business. And here’s what’s interesting is you’ll notice in these eight levels, the lower end ones are all kind of technology and it’s the business factors, it’s the growth and new customers and customer concentration that I’ve put at the six, seven, and eight spot. Those are the ones that are so hard to replace. And I’ve seen several businesses killed. You talk about Google changing their algorithm every what, 3, 6, 9 months and entire affiliate businesses that were doing millions of dollars basically go to zero overnight. So the reason I have this as number six is that if bubble 10 x their pricing or had a big outage, you could rebuild that. 

And if you’re hosted on AWS or using SendGrid or using WordPress, you can rebuild it. The risks are there, but they’re lower than if you lose Google where there is no replacement and you lose all your organic rankings, it can be existential to the business. The seventh level of platform risk, I’ve put a friendly app ecosystem. So an example of this is Heroku, like Heroku apps in general, thrive. Heroku has not, at least to date, and this could change, but they have not screwed their developers unlike number eight level of platform risk or aggressive platforms. But Heroku is one example. I’m sure there are many, many others. In fact, we have a list of I think 80 SaaS marketplaces and it’s microcomp.com/latest/ SaaS dash marketplaces. We link it up in the show notes, but there’s Salesforce app exchange, Zoho Marketplace, HubSpot app, marketplace, Pipedrive, less Knowing, CRM, Microsoft App Source, slack app directory, on and on and on. 

There are 80 of ’em. I won’t read them here. And look, here’s the thing, can I name all of the ones that are friendly and all the ones that are aggressive? No, I don’t know enough about them. I would guess that big companies like Salesforce and now Slack because it’s owned by Salesforce are kind of a pain in the ass. And if they’re not yet that they will become that. And I would guess that smaller companies and those that have not yet been acquired by a bigger player, a public company or private equity are going to be likely more friendly. But those are just guidelines. If you think about this, it’s theoretical in a way of like, well, a friendly platform is friendly until it’s not, and that’s really what platform risk is. When we think about the aggressive platforms that I’ll name in level eight, they all were friendly at one point. 

And so that really is the scary part of being built on in that marketplace and why being in a marketplace holds the seventh and eighth spot in terms of platform risk. And the eighth and final level of platform risk is of course an aggressive platform. This is where there is no replacement. You basically have a hundred percent customer concentration. You have a hundred percent of your lead flow from this platform, and the platform is not developer friendly. So this is Shopify, Twitter, Facebook, I’m sure there are more that I could pontificate about. I’m naming these because they have completely decimated companies that we’ve heard about or that I’ve invested in. You hear Jordan Gaal talk about Shopify coming after Cart Hook, and that’s not the first nor the last time that Shopify will do that. We heard Twitter jerk around anyone using their API once Elon Musk bought it, and I think they did this. 

Didn’t they do this about eight or 10 years ago with Twitter clients? I actually don’t remember, but they did something big back then. Facebook, do you remember? I think it was Zynga, right? It was doing tens of millions of dollars on the Facebook app marketplace, and Facebook just pulled the rug out from under room because they don’t give a shit about their developers. I mean, they’ve been pretty obvious about that. They care about Facebook and no one else. And so there are other aggressive platforms. Again, I do not have an exhaustive list. I just don’t have experience with all of the 80 platforms that we’ve listed at that MicroConf link I said earlier. And so this is where there’s just an existential risk if that you have a Shopify app that’s doing millions of dollars a year and they come and knocking, you’re getting all your leads from them, your customers are concentrated on their platform, and there just literally is no replacement. 

There’s nowhere to switch. Again, we can say, oh, we could go to BigCommerce, WooCommerce, and these other things, but it’s not the same. That’s starting a brand new business. And that risk that we’ve seen play out many times, and that’s why these app marketplaces are number eight in my list of eight levels of platform risk. Hope you enjoyed this episode. I think the list is directionally correct, and I could see either there being another one added if someone were to email in question that started For the Rest Of Us dot com, or you hit me up on X Twitter at Rob Walling, I think there might be another one that I’ve maybe not thinking about, or I could see them gently reordering. There is a little bit of an, it depends, right? I said it’s like if you’re built completely under WordPress and completely in it, it depends on is your switching costs low, medium, or high to rebuild it somewhere else? 

That could move that one up or down by one, but it’s not going to move it to three slots. It’s not going to suddenly become as bad as having a Shopify app where they are just known to be really aggressive with it. So that’s what I mean when I say I think the factors are in line, and I think the list is pretty tight. And again, directional correctness such that next time someone on X Twitter says everyone has platform risk, you can chime in with, well, there’s different levels of it, and here are eight of them. This podcast episode, they’ll obviously be listed out in the show notes, and I’m certainly going to be referring back to this in the future, probably included in a book or course at some point. I do think it’s helpful for us all to have a paradigm in a framework around it. So thanks so much for listening this week and every week. It’s great to have you here. This is Rob Walling signing off from episode 735.