Startups For the Rest of Us

Rob Walling:
Welcome to this episode of Startups of the Rest of Us. I’m Rob Walling and this week I talk with Ian Lansman, the founder of HelpSpot. Ian has been bootstrapping for almost 20 years and he started with on-Prem software and then after about 10 years launched a SaaS version. Ian and I have known each other almost that same 20 years from back in the days of Jolen software’s business of software forums. And over the years, Ian has started a few of his own podcasts as well as spoken at MicroConf. I believe I were to guess it was probably around 2014 or 15. So it’s a great conversation because Ian and I have history. I think we were able to pull out some really interesting bits about why he’s bootstrapped for 20 years, why he hasn’t sold and moved on to his next act, how he thinks AI is going to impact the customer service and support space. And if you stick around until the end, you’ll get to hear the company name that is most often confused with HelpSpot and it wasn’t the one that I thought. So with that, let’s dive into our conversation. Lansman, welcome to the show. Thanks for having me on. It’s great to be here. Cannot believe you have not been on this show. No, you’re like OG Bootstrapper.  

Ian Landsman:
Somebody on Twitter reached out and said, I should come on here. And I was like, man, I think I’ve been on there. And then I searched and I was like, man, I haven’t been on there. Wow, that’s crazy.  

Rob Walling:
Yeah, I am glad you reached out. I think someone, your podcast co-host maybe mentioned it on a podcast and I use arvid calls pod scan, and so my name popped up and I went and I’m like, wait, what? Someone wants to go out and start. So I was like, yeah, dude. And I thought the same thing. I was like, I think Ian’s been on it, but to give people context, like 20 year, I mean really early man back in the day, remember how it was, there’s going to be a lot of jokes about how back in the day, there was no customer development, there was no AWS, there was no SaaS right? Where  

Ian Landsman:
Before all that, man, it’s hard to believe we’ve become the old timers. How did that happen?  

Rob Walling:
Oh yeah, big time. Just so people know, you’re the founder of HelpSpot. It’s at helpspot.com, it your H one is your customer service at scale Amplify your support with HelpSpot, the streamlined solution for scaling customer service effectively. So it’s email ticketing, reporting and metrics knowledge base. And since you started so long ago, you were on-Prem for years and then you launched a SaaS. So you have both on-Prem and SaaS, and I think most folks listening know what on-Prem is, but it’s where they actually download your code, your source code, PHP, Laravel, and they will install it on their own server. And then I guess what’s the benefit? Why would today, I would just do the SaaS personally, but the people who still use on-Prem today, why do they do that rather than pay you for the  

Ian Landsman:
SaaS? Yeah, so definitely the majority or SaaS using the SaaS version these days, but we still have new customers in the on-prem and basically there’s some advantages. Big companies or certain specialized companies like in finance, healthcare, they have different rules, potentially laws. They’re also the type of companies that still have IT departments. And so they want to be in control of their own data is usually the main reason in terms of they control the database and they’re backing it up and those things, but also sometimes they’re just running completely off the internet. It’s like, here’s our help desk, it’s for maybe IT in that case and it’s literally not connected to the internet. And so it’s just fully encapsulated in their network behind their firewall. And so they want to do that. And it is an area I think people have abandoned completely that maybe shouldn’t be totally abandoned because there are some, you could charge more. We actually charge the same price currently, but I think there’s a lot of opportunities there to charge a lot more for the people who want it on premise and things like that. So yeah, it’s not that bad if you have a modern SaaS app, it’s not impossible to make an on-premise version. Some things like if you depend on 30 services, that’s going to be hard, but with a little bit of forethought, it’s really not that bad.  

Rob Walling:
We have a few TinySeed companies and I don’t know how many exactly, but when they apply they’ll often say, so we’re SaaS, but we also do on-prem. Is that going to be a deal breaker? And I was like, no, we funded a handful. And again, I don’t know if it’s five or if it’s 10 out of one 70, but there are especially like you said in finance or in certain regulated industries where you really do need or want control of that data and just went on some random spot.  

Ian Landsman:
Yeah, it also gives you some advantages of you’re a tiny bootstrap company, you’re not going to be able to be SOC two compliant, for example, and there’s going to be these type of companies that are like, well, you’re SOC two. Let me talk to your security people, all this stuff. And it’s just like you, it’s you and a couple of people, and so this gives you some outs with those big companies. It’s like, Hey, you know what? You can install in your own SOC two data center and you’re already SOC two and you can, it’s all good and so we’ll charge you for that and everything. And those tend to be also some of the best customers. I mean those are the customers that stay with you for a decade. You’re in there, you’re on a server, just not even the type of companies that are in the mindset of like, oh, somebody launched a new fancier version of this tool we use. Let’s go out and find the fancy. Let’s take a look at this and let’s see if we could switch over. It’s like they’re not, the culture in these companies is not like that, which is great for you as the bootstrapper who isn’t always moving as fast as a VC back company can or some big company that enters your territory. It’s like you got a lot of customers that are just there and they’re happy with your product and they’re not looking around for other solutions.  

Rob Walling:
And I want to be clear, I want to get back to on-prem probably halfway through the interview, what we’re not saying is once.com, right? It’s not you pay once and that’s a different thing. I guess it’s related, but to circle back to where I wanted to start is where is the business at today?  

Ian Landsman:
So we’re profitable doing well, a little under 2 million A RR five employees, I think five, yeah, five full-time employees and a couple of part-time people. So it’s kind of been running, it’s just going, it goes up a few percent every year and it’s fine and we’re profitable and it’s great, and I’ve been running it in sort of that not people say lifestyle, I wouldn’t know if I’d go all the way to lap, but that applies a certain ease of life that I don’t know if I’m all the way achieved. But yeah, not super stressed about that stuff. It’s been nice, especially the last, I think we’re going to talk about the early years. There’s probably more action in some ways, but it’s kind of the last 10 years, my kids have been getting bigger. My oldest just went to college, so it’s sort of been this, I’ve been cool with it being profitable and running well and that’s great. And yeah, I think I’m starting to turn a little corner of some new things I want to do with it as I get more time, kids get older, all that stuff. But yeah, it’s doing well.  

Rob Walling:
This is going to sound like a negative pejorative question, but it’s like how have you not gotten bored? I would get bored. Where 19. It’s next year, 20 years, 

And we all have different personalities and I’m the person who’s never worked the same job even, let’s see, I think MicroConf, well, MicroConf doesn’t totally count, but even for me it was a hobby for many years. But MicroConf and TinySeed now I think are the thing I’ve worked on the longest six years because even Drip from the founding to selling was three and a half years, and then I stayed another two years, so even Drip was five and a half years. So you could tell I just had that personality of like, Ooh, I need to do the next thing. But you’ve stuck with something for 20 years.  

Ian Landsman:
I don’t know. I guess I wouldn’t have thought it would be exactly like that in the beginning necessarily. I think what I’ve done is since it’s been profitable, it’s given me flexibility to do other things along the way. So I ran conferences both in world and online. So similar to what you’ve done with MicroConf as a way to explore things. We built a job board for the Laravel and we run the official job board. I built a product called Thermostat that didn’t really work, and I recently sold off. I built another product that I sold off that didn’t work. So every three or four years I get into something else and that’ll distract me for a little while, probably to HubSpot’s detriment, but also probably practically just something that needed to happen to keep me when I come back to HubSpot after my little excursions, it’s like, oh, it’s still here. 

It’s still doing great. Energized to take on some new stuff and do some new things. And so that’s kind of how I’ve done it. And I think it’s something I’m sure you hear a lot and Bootstrapper sort of problems let’s say, is that you get to a certain level of success and it’s just a little bit of a weird zone where it’s not big enough to sell for the amount of money that’s just like, oh, I’d never have to work again, money, I’m totally set. Don’t worry about it. It’s not quite big enough for that really. Maybe if I sold in 2021 right at the top there. So it’s never been really that. I’ve never had any really appealing offers that’s like, oh yeah, I should sell it. Obviously you could just sell it to sell it and move on to the next thing and still have a nice amount of money, but it’s like, ah, who knows if the second product’s good? I’ve never built a really good second product. I mean, some of these things have been okay, but it’s hard to build a second product, so it’s like, ah, I got the first product that’s done so well. I’m just going to stick with that. That makes  

Rob Walling:
Sense. Let’s go back to the beginning. So you launched it in 2005 and you told me that you quit your day job and coded for six months, which is exactly what we tell people not to do today, right? Don’t quit your day job and live off savings or you said your wife was basically supporting you during that time, but what a gamble To me, it’s terrifying to do that, right? Were you scared at all and why do you think it actually worked? What was that time?  

Ian Landsman:
Yeah, it was, man, it’s so wild to think about now. The world was just incredibly different. In 2004, it started, I wasn’t even a programmer in college or anything. I learned the program on my own and then I was like, okay, I want to do a product. We went through a million product ideas, whatever, finally came on this HubSpot idea because I used a really awful help desk at work that was mainframe based and didn’t accept email and all this stuff. That’s where the world was back then. Just to set the stage, A lot of big companies just used had no help desk or a very poor help desk solution. So it was like, okay, I want to do this. Both me and my wife agreed it’s a good idea. So we had just bought this condo, which was a little bit pricey. I was a little nerve wracking. 

We sold my car, so we had that money, put it in the bank, so we just went down to the one car. My wife kept working, and then, yeah, it’s like I would never give anybody this advice now, but it’s just such a different world because it’s like there was no choice, there was no real frameworks, there’s no Ruby on Rails, no Laravel, none of these things. And so it’s like, okay, I know PHP, I’m just going to have to write it. I don’t even know JavaScript. So I’m literally sitting there with the JavaScript Bible, which is a four inch thick book, learning JavaScript while I’m building the app. And yeah, it’s like I always say I could build V one of HelpSpot today probably in three weeks or something with if I just use all the modern tools and everything we have and just do the very basic version that it was in version one. It’s like, yeah, you could do it, keep your job, do it on the side, all that stuff. But it just would literally never happen. I mean, I worked six days a week, 12 hours a day for six months, and even then it wasn’t great. It was just functional. And so that’s just what you had to do back then, or it wasn’t going to happen. Those were the options  

Rob Walling:
When back when people would raise half a million dollars with just an idea that really doesn’t happen anymore. But you had to do it because as you said, you had to write every line of code and there were really no libraries, and it was, yeah, it was a lot more to be done.  

Ian Landsman:
Even the raising money is something I thought about, but you got to remember in 2004, the dotcom bust just a couple of years before that, the whole VC world was kind of a mess. They weren’t looking to fund individual guys with an idea too much. I’m sure there was some investments, but it wasn’t very common. So we were all, you were there, we were all in these bootstrap circles, Joel on software forum and all kind of just working together to figure out how do we ship software without really any big funding.  

Rob Walling:
That was the thing is the narrative was still raise a bunch of money, but there was Joel and there was, well, it was you  

Ian Landsman:
Eric Sink and  

Rob Walling:
Eric Sink and the  

Ian Landsman:
Wedding Patty 11 was there, Patty  

Rob Walling:
11, and, and that we all knew each other by name, and it was like, oh, yeah, and we’re all trying to figure it out on our own, but also together of like, is this even possible to do? There was no narrative, there were no books on this topic. There were no podcasts. You just, it was forums, right? I mean, that’s what I remember.  

Ian Landsman:
Yeah, just forums. That’s it. There was not much else. Those of us in the community had blogs or whatever, and we talked about it, we talked about in the forums, but yeah, no Twitter, right? No YouTube, nothing. There was not a lot of nice ways to get information about how people do it and different strategies and all that stuff. Joel was writing some books. Eric Sink wrote some awesome books. That was kind of it.  

Rob Walling:
And I remember around that time, I think I had gotten an invoice in oh five or oh six, and I didn’t know, I was like, well, how do you market do SEO AdWords, whatever? So I would go look at, there were no books about startups doing this. It was all the info marketer internet marketing stuff. And so I went and learned copywriting from them and applied it to startups, and I was like, oh, they split tests info. A lot of ’em were very scammy info internet marketers course. So I would take that and then translate it to me, which was the not scammy version. So they were doing split testing, they were doing AdWords, they were doing SEO O, and I learned from those folks and translated it in, and no one was really talking about that in the startup space. It was like startups were raise a bunch of money, go viral and have a big launch party, buy billboards. It was this really odd thing of, it was a weird  

Ian Landsman:
Time,  

Rob Walling:
It really was. But folks like you starting HubSpot, you needed nuts and bolts. How do I get in front of people? How do I sell so that I can have a paycheck next week? Let’s flash forward six months. So you spend six months building, you get to launch day. How do you get the word out?  

Ian Landsman:
Man, it is crazy. You’re going to appreciate this being an email newsletter kind of guy. So I built a list, an email list of, and this was really basically just people from the Joel Software forum and a few people follow my blog, and it was literally like 84 people right now. People launch are like, oh man, I only have a thousand people on the list. What are we going to do? 84 people? And the first month we had $4,000 in sales, and it’s like some people brought it into their companies and brought it to their boss and whatever. And I had started on the SEOA little bit before launch two with the landing page and stuff and help desk software in terms of web-based help desk software was new. So we were first or second for the term help desk software for several years, just kind of like Blue Ocean or whatever, and that was our main marketing channel. But yeah, the initial launch was this 80 person email list. Then the SEO kind of picked up over those first few months, and then that was, it just started going, and we still have a lot of those customers today, but that was the kickoff.  

Rob Walling:
So someone listening to this who has tried to launch and failed thinks you got $4,000 of sales in your first month, what a month. I do want to remind them it’s not 4,000 of MRR.  

Ian Landsman:
No,  

Rob Walling:
It is 4,000 effectively one time. Did you have a maintenance fee each year or how did that work?  

Ian Landsman:
Yeah, so that’s a great point to nobody out there listings even going to think of it that way. Yes, it is not 4,000 MRR and you’re like, woo, baby. We’re launched and going, yes, it was $4,000. There was a owned license. So you buy the license and you own it, and then yearly there’s a support maintenance fee where you pay that and you get updates and you get support. And so if you don’t pay that, you don’t get updates and you don’t get support. So the good thing though is that it was effectively a recurring revenue, and this is all annual, so it was 4,000. It was like a 30 something, 30%, let’s say was the support fee. So it would be whatever it is, like 1500 bucks or whatever a year after that. So each year, that first group of $4,000 would pay us $1,500 to maintain support and updates. It’s a B2B app and it’s a heavy use B2B app where it’s not just like we use it once in a while. It’s like, no, you’re paying people full salaries to sit in this app 40 hours a week and use it. And so generally most companies are going to pay that support, and they did. And so that worked out good long term. But yeah, absolutely. It wasn’t like, oh man, this is monthly. Four grand a month was definitely not that.  

Rob Walling:
Do you remember what your pricing was? I’m just trying to get an idea of how many copies sold to get four grand?  

Ian Landsman:
Oh, geez. I think it was one 50 a license,  

Rob Walling:
So it would’ve been like 30, well, not quite 30, like 26 or 27, somewhere in there. Licenses.  

Ian Landsman:
Yeah, something like that. That’s pretty good. Sounds right.  

Rob Walling:
That’s not bad at all.  

Ian Landsman:
Yeah, I was happy. I was like, whoa. And then we mined that mailing list and so the second month was like a thousand dollars or something crazy, and it was a little nerve wracking there, and then it went up after that and just kept going. It’s an ASCO,  

Rob Walling:
It sounds like.  

Ian Landsman:
Yeah, exactly.  

Rob Walling:
Because the thing that you don’t remember, if you haven’t run a onetime sale business, the sales numbers are a lot higher. T net invoice was my first product and it was 300. Well, it was a hundred when I bought it. I acquired it and then I raised it to 300 and I would sell seven to 10 copies, sometimes up to 13 copies or whatever. So you’re talking like two, three, 4,000 a month. And we did have 20% maintenance, but it really was one time. And so if we lost our SEO rankings or during the financial crisis, we would lose 80% of our revenue overnight. So we’d go from three grand down to 500 because nothing was recurring. So you basically front load it, right? It’s like they’re paying for a year is, which is actually good when you’re bootstrapping, so you get a lot more cash upfront,  

Ian Landsman:
Keeps you in business.  

Rob Walling:
Yeah, it’s pretty nice.  

Ian Landsman:
Yeah. Well, I think that’s too, with the invoicing software, it’s like it’s a little more like, Hey, we use it, it works. Well, maybe with some of us sometime we’ll pay him his renewal, but we don’t really care that much. It’s operational. It’s like if you can get to that next layer of like, no, we have $2 million in payroll using this software, and now we’re taking this big risk. If we’re down for a day, it’s a big problem and we’re losing money and more directly. And so I think when you’re thinking about the kind of business to get into, there are advantages to that kind of thing where it’s a product that people use very heavily, very competitive nowadays too.  

Rob Walling:
So you had this on-prem software from oh five until you told me 2015 is when you launched a SaaS version. And the question that popped up in my mind around that is 2015 feels late to launch. SaaS SA first became kind of in the zeitgeist in the, I would say oh seven to oh nine, that MailChimp became a thing. And there was other, I mean certainly there was SaaS before that, but it wasn’t called that. Remember ASPs and whatever the other acronyms, Basecamp, Basecamp, Salesforce, constant Contact, they were around. Even AWeber was really early, but I remember by 20 11, 20 12 SaaS, that was a thing. It was like going, so I would think you having this on-prem would have moved to SaaS, not moved, but just deployed a subscription version earlier. So what was the delay? And I’m not acting like you launched it late, but it’s just in my head. Yeah, that number. So what took that time?  

Ian Landsman:
I think it was really a couple different things. Definitely when I launched, I knew about SaaS and made the decision to not make it SaaS because I didn’t know anything about running servers. There was no money to hire somebody else to run servers. And so I just feel like that wouldn’t have ultimately worked out very well. So it was on premise and then it was kind going along and it was busy and it was fine. And the big, obviously when I took more notice in terms of direct competition was you had Zendesk, which I think was maybe 2008 ish, something in there, and it’s like, oh, okay, this is really becoming a thing now, so I should probably start thinking about more. But we did even before Zendesk earlier on, have a partnership with a hosting company and they ran the hosted version of HubSpot for people. 

And so it was a separate relationship with them. It’s like you came to us, you bought the licenses, you went to them, you paid the monthly hosting fee, but they would actually install help spat and run it for you, and if there was a problem with the server, they’d fix it. So we had this sort of in-between, so that did let us delay. Then another sort of aspect to it is that HubSpot was not in any way conceived as a SaaS, so the data structures are not correct for SaaS and things like that. And so in that earlier phase of the SaaS rise, I think it would’ve been pretty tricky to do it. And what kind of happened later on is we had, then you have AWS, you have really cheap servers and things like that, and so it made it simpler for us to make the move because how HubSpot SaaS version runs is actually everybody gets a tiny AWS like nano server and everybody’s on their own server. 

We do have a centralized big RDS database with multi failover and all that stuff, but we basically deploy it as your own little HubSpot server, and so we don’t have to make the database work for multi-tenant and all these things, and the cost is outrageous. By that point, it was like, okay, two bucks a month you can have a little mini server on AWS. And so that’s the way we rolled it out, and this way we can keep the code base the same for on-premise and cloud and as we go, I think it’s going to start to, we do already make a lot more accommodations for the cloud version since it’s more of the new customers, but that was kind of the transformation there basically.  

Rob Walling:
How painful was that  

Ian Landsman:
To go on  

Rob Walling:
Premises? Oh, it’s painful. Was it brutal?  

Ian Landsman:
Brutal. Very painful. I mean, because there’s a lot involved had to switch. We moved to subscription pricing at that time, but I didn’t want to force everybody’s subscription pricing. And so it’s like if you want to be on the cloud version, you have to move to subscription. So even on-premise customers, now if you’re a new on-premise customer, you’re on subscription. Everybody’s on subscription and it is annual subscription, which is another thing I think founders don’t think enough about is just only having, I’ve only ever had annual, and I think it’s served me pretty well. We are going to experiment with the monthly option here, but again, if you’re in the kind of business where it’s often, it’s literally a committee we’re dealing with and they’re evaluating multiple choices and they’re not really going to switch off on a whim after three months, they’re making a commitment on their end, so not that big a deal. 

So that was kind of a big one. The subscriptions, the tech. Yeah, it was, oh, the other thing is moving people. So we have all these existing customers and they want to move, and it’s a big app. We have customers at 70 gigabyte databases, and so moving them onto the cloud is quite a production. We also allow a lot of customization. It’s kind of one HubSpot’s differentiators from other solutions. There’s a lot of knobs and dials and things you can do. You can even write your own PHP in certain spots if you want to do something very custom, which is something that other help desk software won’t let you customize on that deeper level, obviously, because no way for them to really safely do that. So we still to today, so we did that 10 years ago. Today we still will have at least usually one a month, but sometimes more of customers coming from on-premise to our cloud solution. And yeah, it’s a multi-week operation usually to not pure time, not like 80 hours, but going back and forth and figuring it all out and they check it and blah, blah. So yeah, it’s a big process.  

Rob Walling:
I was going to ask if you still offer on-Prem or if at a certain point, obviously if you sell, have a bunch of customers using it, paying you, you would let them keep going, but the idea of just going to hubspot.com and the only thing you can sign up for is the SaaS. You haven’t done that. You still offer both. What’s the thinking there?  

Ian Landsman:
And we have had competitors. I think Kyoko was also an on-premise like us, and then they moved to SaaS and then they said, that’s it. No more on-premise. Spiceworks also said no more. So people definitely abandon the on-premise. But yeah, for us, I just feel like we definitely obviously have a good amount of customers who still use it. Like I said earlier, those are some of our biggest, best customers. Been with us 14 years and pay us $20,000 a year, big accounts for us. And so definitely eliminating that would be tricky if I’m forcing them to come up to my cloud or go elsewhere, some percentage are obviously going to go elsewhere just naturally, so I don’t want to do that. I could, of course, like you said, just going forward, but again, it’s like a lot of really great customers are in the on-premise. 

So even though it’s only probably 10% of our new business, it’s a valuable 10%. And also I think we haven’t done a great job marketing it recently, and that’s something I want to actually do better and try to get that actually up a little bit. There are interesting trade-offs with on-premise in that it’s more support for sure. There’s just server issues and sometimes the support person takes half a day on somebody else’s problem ultimately that we end up being responsible for helping them, things like that. But again, they’re oftentimes much more higher revenue than the day in day out customer. And they also, there’s other little interesting things like they often pay by check or transfer, which costs either nothing or $10 versus cloud customers that often pay by credit card and costs 5% ultimately and stuff, which when on $10,000, 5% is a lot of money. 

So there are these little other things too. But yeah, that’s kind of the reasons I still think that there’s something there. And also I think in general, we’re seeing Elasticsearch and databases and a lot of the structural things still are even more so offering on-Prem. It might be literally on-Prem, it might be in your AWS cloud, but it’s your cloud, not our cloud. And so I think there’s just still opportunity there that I wouldn’t want to be totally out of the game, especially because no other help desk software, nobody knew when Help Desk software is offering it. None of the existing players are offering it who didn’t already offer it in the past. And so I feel like it is a little bit of a competitive advantage there where it’s like we’re going up against other poorer solutions than just the intercoms of the world with infinite money. It’s like, no, this can be a little niche that we have some advantages in.  

Rob Walling:
No, I think that makes sense. I may seem off topic, but I have a question for you about, well, you were written on some PHP that you hacked together 20 years ago, but then I know at a certain point you integrated and you’re pretty heavily involved in the community. I think you mentioned some of that earlier. Laravel just raised 57 million, I don’t know, two weeks ago maybe. What’s your thinking on that and what that means for the future of Laravel?  

Ian Landsman:
Yeah, so I think it’s really exciting. I mean, I run the official Laravel job board. Taylor Twell, the creator of Laravel, worked at UserScape with me for three years. My company’s name is,  

Rob Walling:
I didn’t know that. Oh, what a trip.  

Ian Landsman:
Yeah.  

Rob Walling:
Did he work on HelpSpot?  

Ian Landsman:
Yeah, yeah. And some other new stuff. In one of my distraction periods, he worked on some new stuff. He worked on HubSpot. But yeah, I actually found him, he was working at a shipping company and I found Laravel and I was like, wow, this is awesome. I want to have a framework to work on new versions of HubSpot with as well as other ideas. And I didn’t like any of the other PHP frameworks even up to then, which is 2010 or something like that. So I reached out to him. I was looking to hire a developer. Anyway, I ended up hiring him. He worked the first three or four months at user scape, just building out Laravel actually in some of the more enterprisey things. It didn’t have already caching and some other things. And then, yeah, we did the conferences together and stuff. Then ultimately he built Forge, which is the main revenue producer at Laravel. 

It’s like a hosting platform or manager. Then that started making a lot of money, and I was like, okay, you should go run that. And so he did. But we’ve stayed close friends and I’m definitely friends with a lot of people in the Laravel community. So yeah, I think the thing is he turned that into a bootstrapped and very profitable business, and again, kind hit that point where he had some bigger ambitions basically to launch this thing called Laravel Cloud, which is going to be Heroku, but for PHP and Laravel, basically, it’s kind of like the shorthand, but that kind of thing obviously requires just even if you have a very profitable business, it’s ultimately you’re going to need a lot of very expensive engineers and lots of servers and security people and all this stuff that starts to get into, if I’m paying, I’m making up numbers here, have no idea what they’re paying. But if you’re paying a security guy $800,000 a year, let’s say, or whatever, that starts to be a lot of money. So to chase those ambitions, that’s what he’s done. So I think so far so good. Like you said, it’s only been a couple months since they raised, so  

Rob Walling:
Now I want to ask you something that I asked you offline, and it was about what’s your biggest fear today? Looking ahead, you’ve run this business for 20 years, and you mentioned it was like how can AI potentially impact this? You want to talk us through your thinking?  

Ian Landsman:
Yeah, so I think this is a topical one. So I think customer service is more directly in the crosshairs of even current AI capabilities to some degree. Obviously you can make the case for like, well, every job is going to be affected or whatever, who knows? But I think this is one where it’s like it’s a cost center. A lot of companies look at As, and they’re like, okay, if AI can do a reasonable job, maybe we’re willing to make changes there. So yeah, I just think it’s a big unknown. I think so far it hasn’t been really disruptive at all, but that doesn’t mean it won’t. There’s definitely been some companies that have made big moves, like Klarna got a lot of press for moving almost all their support to ai, but again, that is a very particular use case where they don’t have a lot of different types of questions. 

Basically it’s like, I want a refund, how do I pay my bill? So I think a very good use case for an ai, they had poor service ratings to begin with, so it’s like, are the AI people going to do any worse? Probably not. So you have some differences there, but yeah, who knows? So I mean on the one hand it’s like those fears of just might consolidate down to a few big AI players who do a fantastic job with it and they just gobble everything up, or is there going to be, is it not going to be a thing at all or more of a middle ground where since we have access to a lot of similar technology, at least ostensibly, right, is we can pay for open AI or whatever else, we can add those tools for the most part, I think there’s going to be probably some things that are going to be beyond our capability, but so I think that’s definitely just a big unknown and we haven’t had that in a long time. And the help desk space, it’s been pretty stable. So this is definitely a new thing that’s out there and it’s like, we’ll see how it goes. We’re definitely adding AI features and maybe that’s just kind of be kind of where it ends up, but we’ll see.  

Rob Walling:
That makes sense. Just out of curiosity, what’s the first one or two AI features you’re adding?  

Ian Landsman:
Yeah, so very early on we did your standard writing helpers. We went farther than most of the other help desk tools I’ve seen have gone where you can define your own prompts and tools for the agents, but still it’s ultimately more on the writing and human creation side. But from there we are working on doing things like auto triaging where it can route inbound tickets to the right categories or right agents and things like that. So that’s going to be one of the first more sort of offensive minded, more active AI elements that we’re going to be adding. And then from there we have some different ideas about how we might do auto responding in a way that’s maybe a little bit safer. So obviously everybody’s trying to go for the holy grail of the AI just responds. You give it anything and it can just respond, but maybe there’s some in-between ground there where it’s more of a human response, but we use the AI to maybe figure out what’s the right response or some different things like that. So some stuff in r and d, some stuff very close to shipping. So that’s kind of where we’re at with it. But it is a big sort of sea change much when I started the company, which is like everybody’s using client server apps or just pure email, and that was the big shift and now it seems like there might be another big shift. I don’t know if it’ll be, it could be bigger than that. It could be less than that. I dunno, who knows, but we’ll see.  

Rob Walling:
So last question for you today before I let you go, I asked offline, I said you named HelpSpot. How did you feel when all these other help desks launched with help? Right, so there was Help Scout and help somewhere else, and what did you say to me?  

Ian Landsman:
Yeah, so those don’t bother me at all. There’s lots of whatever variations, but I thought the spot was kind of my unique thing. I liked the spot and Dharmesh Shaw, who’s the co-founder of HubSpot, was in Joel on software with us and kind of in our circles. And then he starts HubSpot and stole my spot like dude, and now it’s HubSpot. And obviously anytime I say HubSpot and HubSpot and people get confused even more than with Help Scout, although that one does get confused as well sometimes. But yeah, I’d say in terms of naming irks HubSpot,  

Rob Walling:
HubSpot  

Ian Landsman:
Kind of takes the pride from me.  

Rob Walling:
Sometimes that happens, sometimes it happens. Seemed to have  

Ian Landsman:
Done it. I like Dharmesh though. DH is great. Alright. He’s a great  

Rob Walling:
Guy. He’s so gracious and he still, when I wrote this SA playbook, I emailed and said, would you give me an endorsement? And he’s like, of course. And he gave this great endorsement. I put it on the cover of the book. It was so nice. It was like, I’ve been learning from Rob for years. You should too or something. I’m like, oh, you’re the  

Ian Landsman:
Awesome man. That’s crazy. He’s so good. Yeah, a few times I’ve talked to him over the years too. It’s just like, yeah, he’s still like the guy from in the for, you know what I mean? It’s like he’s a billionaire now, but he’s still kind of just humble. The same guy.  

Rob Walling:
Humble and just,  

Ian Landsman:
Yeah. That’s great.  

Rob Walling:
Ian Lansman, thanks for joining me today. Folks want to keep up with what you’re working on, obviously helpspot.com to see the app, and you are Ian Lansman on X Twitter. Anything else you’d like folks to check out? I know you have a few podcasts.  

Ian Landsman:
Yeah, the other thing, I guess the other main thing, if you want to keep up with what I’m doing is mostly technical is my podcast I do with Aaron Francis, and it’s more somewhat technical. There’s a little bit technical, but mostly it’s business and other topics, so it’s more entertaining, I’d say. Yeah, so check that out. We have a lot of people seem to like that, so that’s been fun the last year or so, working on that. Again, one of my little, I can’t really justify it on an ROI basis purely, but it’s a fun thing that I get to work on and is exciting to do.  

Rob Walling:
Awesome.  

Ian Landsman:
Yeah, so check me out  

Rob Walling:
There. Thanks again for coming on the show. Thanks for having me. Thanks again to Ian for coming on the show, and thank you for listening this week and every week. This is Rob Walling signing off from episode 734.

Rob Walling:
I had this epiphany on the spot, and I’d never said this before. I said, weaknesses are fine. We all have strengths and weaknesses. You don’t want blind spots. A blind spot is a weakness that you are not aware of. When you have a weakness and you know about it, you can work around it. If you are the founder who bounces from one thing to the next next who follows each distraction and you realize, you know what, I’m never going to focus on anything long enough to build something great, then you can acknowledge that weakness and stick with things longer than you think you should. But if you’re not aware of it, how can you work around it?  

It’s another episode of Startups. For, the Rest, Of Us. As always, I’m your host, Rob Walling. This week I’m flying solo As I talk through a few topics I’ve been mulling over these past few weeks and months. The first one is going to be about distractions, good distractions, bad distractions, micro, macro, and talking about how to avoid the ones that will derail your plans. I also want to talk about weaknesses versus blind spots. I want to look at how everyone, even the successful founders around you struggle. And then if we have time, I’m going to cover a topic about how you don’t have to be right all the time. In fact, you don’t even need to be right the vast majority of the time to be successful. Before I dive into the topics, if you haven’t picked up a copy of the SaaS Playbook, it has sold just about 30,000 copies.  

I actually haven’t run the numbers in about a month, and last I checked it was at about 29,000. The book is selling really well, and the reviews and ratings and comments both on X, Twitter, Amazon and other places are really encouraging. And it seems the book is resonating with a lot of people. If you haven’t picked it up, SaaS playbook.com or you can get it on Amazon or Audible if you have picked it up, I would love it if you leave me a five star review on Amazon or Audible. That helps people find the book and it helps people gauge whether it’s going to be helpful for them. And with that, let’s dive in to my first topic about distractions. I was going to title this segment, how to Stay Focused even when there are things around you that you’d prefer to be doing. What I realized is all distractions are not bad.  

So I have a couple dichotomies in this section that I want to talk through. The first is I do think there are good distractions. There are distractions that help your mental health. There are distractions that make you happy. There are distractions that have long-term benefits that might distract you from your goals. Your goal is to launch a company or build a company to five, 10, 15 million wherever you’re going. And a quote distraction is anything that maybe you have to spend time doing that isn’t that? And examples of good distractions are going outside, going for a walk, working out, spending time with your family, your kids. Now you might be saying, Rob, spending time with my family or my kids, my spouse? That’s not a distraction. It’s not. I don’t view it as that in my worldview per se, but if we’re looking at a technical definition of your goal is to do X, anything that isn’t getting there is, you could phrase it as a distraction from that.  

Even having a lovely conversation with a friend when you should be focused on shipping a podcast episode could be a good distraction. That’s actually what happened to me with this particular episode. It was Friday afternoon and I wanted to ship this episode so that our editor could start getting it ready. And I was having a delightful conversation that wasn’t getting me towards this goal of shipping this episode, but I asked myself, what is the cost of engaging with this distraction? And that’s a thing that I want you to ask yourself about every distraction that comes up from here and for the rest of your life. Can you imagine if I could actually have that impact on your life, that’d be great. But even for the next day or the next week, what is the cost of engaging with this distraction and what is the benefit of engaging with it?  

The benefit of spending time with your spouse or your kids or people you love is scientifically proven. Humans are so community and relationship driven, there are all kinds of benefits. What is the cost? Well, the cost is I can’t spend that time working on my product or my business or getting that podcast episode shipped. And so as long as you do it in moderation, you’re fine. You spend an hour or two hours or three hours doing something that is a distraction. You can get your work done, you can get your stuff done. If you spend 30, 40, 50 hours a week, some folks who get addicted to video games or addicted to a substance, addicted to alcohol, and they use these things as a distraction, that’s when it breaks down, is when it moves from moderation to perhaps overindulgence. So when you ask yourself, what is the cost of engaging with this distraction?  

Well, if it’s a half hour conversation with a friend, if it’s an hour or two with family, friends or kids, in a lot of cases, that’s going to be the right call. The benefit outweighs the cost in those instances. But then let’s look at playing video games 30, 40, 50 hours a week. What is the cost of that? Well, it’s pretty significant. I imagine it’s going to take a toll on relationships. It’s going to take a toll on your ability to push your business forward. And while there is benefit to playing a video game or having an old fashioned on a Friday afternoon, there is benefit to these activities that make you happy, might be good for your mental health, they might put you around people that you enjoy spending time with. It comes back to this moderation and the cost of engaging with something for an hour versus 10 hours is much different.  

Now, I’ve talked a lot about in the moment distractions, I might call these micro distractions where it’s spending time with someone and playing video games, whatever, versus macro. So what are macro distractions? These are bigger decisions. Let’s launch an entirely new product. Let’s translate our app into Spanish. Let’s make a huge strategic decision that is going to take months and months and hundreds of person hours to implement. Even building a side project. When your first effort, your startup isn’t growing as fast as you want it to be, is that distraction a good thing or a bad thing? Well, I’ll come back to this. Number one, is it in moderation? And two, what is the cost of engaging with this potential distraction? And the macro ones are a little trickier because the worst distractions masquerade as productivity. I want to say that again, the worst distractions masquerade as productivity.  

Because if I know it’s a distraction, if I know, again, it’s playing video games, it’s anything I do for a hobby, I would say, oh, it’s a distraction from work. Again, that’s not my worldview, but let’s be very black and white about it in this segment. And if it’s obvious, and I know it’s a distraction, it’s okay. But I see a lot of entrepreneurs who think that reading more business books, reading hard thing about hard things or a biography about an entrepreneur, they feel like that is educating them on how to start a company. And to me, it’s a distraction. Masquerading is productivity. One of my most popular blog posts back when I was still blogging was called Startup Founders Should Stop Reading Business Books And don’t take the title literally because isn’t the SaaS Playbook a business book? It is. But in the post I talked about how highly tactical, highly prescriptive books like the SaaS Playbook or Traction by Gabriel Weinberg, even like EOS, things that give you information that actually improves your business.  

I put those in a category training of actually showing you tactics and strategies that will get you there faster. Reading books by Malcolm Gladwell, and even a lot of, I mean I like Seth Godin’s books, but a lot of Seth Godin and just frankly, most business books that are out there are just not going to help you grow a startup faster. Take this as someone who reads 30, 40 books a year, I have 900 books in my Audible account that I read books via audio. Obviously if you’ve listened to this podcast for any length of time, I am Pro book. I’ve just written my fifth book, but I know when I’m listening to most books and most podcasts, even if they are business oriented, that they are a distraction, but many entrepreneurs don’t. And that’s when distractions masquerade as productivity. Here’s another distraction that I see masquerading is productivity.  

In our circles of entrepreneurs, it’s launching another product without marketing the one you’ve already launched. Or how about this? It’s focusing on writing more code or answering support tickets or doing something that’s certain without selling what you’ve already built without marketing and selling the thing you’ve already built. Because that’s hard, it’s scary, it’s uncertain. It’s where the resistance lies. It’s what you don’t want to do as a technical founder. So what are the takeaways from this one? I want you to keep in mind this question of what is the cost of engaging with this distraction and what is the benefit of engaging with this distraction? Because the benefit of reading a business book might be it’s just fun. It’s what I do in my off time. It recharges me, and I understand and admit that this is not being productive. It’s a hobby that I have.  

And I think weighing the cost versus the consequences, as you think about distractions and just being deliberate with your time, that’s it. If you’ve known me for any length of time, the value that I put on relationships and on my relationships with my wife and my kids and my friends for that matter, so you’ll know that I’m pro you spending all the time with all the people that you want to feed your soul. I just want you to keep in mind the cost versus the benefit, and to be extremely aware of distractions that masquerade themselves as productivity. At the end of that story is I had a distraction yesterday. I knew that the benefit of it was, it made me happy, and the cost was that I might have to record this episode on a weekend. And here I am Saturday afternoon recording it. And you know what?  

That’s the decision I made. I’m here for it. My next topic is another dichotomy. It’s weaknesses versus blind spots. So I was interviewed on a podcast last week and the host started asking me about personality tests like Myers-Briggs, Enneagram, Colby, a StrengthsFinder. We were kind of batting some stuff around, and I never remember my results from these tests. I actually have taken all of them, I believe, and what I do is I read through, I take what I can learn from them, I internalize that and say, oh, yeah, I should do that. And then sometimes I’m like, that’s not me at all. And then I kind of forget. I don’t remember what number I’m on the Enneagram. I always have to look it up, but when I pull it up, I’m usually like, oh yeah, that’s totally me. It describes me and my strengths and my weaknesses.  

I think it’s pretty good at it. Now you have to take these things for what they’re worth. Some of them are put together by researchers who have 5,000, 10,000, 20,000 people take these and they normalize the results. And they are quite scientifically, I’ll say, accurate, as accurate as you can get with something like this. And then there are other ones that are kind of made up by people not really tested, and you got to take it for what it’s worth. So I always hold them with a grain of salt, but I have found them helpful for me over the years to learn just a little more about my weaknesses. So we were talking on this podcast and I had this epiphany on the spot, and I’d never said this before. I said, weaknesses are fine. We all have strengths and weaknesses. You don’t want blind spots.  

A blind spot is a weakness that you are not aware of. When you have a weakness and you know about it, you can work around it. If you are the founder who bounces from one thing to the next, next who follows each distraction, who maybe has a little bit a DHD, whether it’s clinical or whether it’s just something in your personality and you realize, you know what? I’m never going to focus on anything long enough to build something great, then you can acknowledge that weakness and stick with things longer than you think you should. But if you’re not aware of it, how can you work around it? If your weakness is that you don’t like doing hard things or you don’t want to do or work on anything that you don’t want to work on, and let’s say you are a maker, you’re a builder and you want to write code, you want to build websites, you want to build products.  

If you know that’s a weakness, and you’ll listen to this show or you’ll read books about this topic or hear opinions and advice from folks in your mastermind. If you’re in a community like MicroConf, connect wherever you are getting advice. If you don’t realize that you are constantly doing that and avoiding the hard things and only really doing what you want to do and justifying it with, well, that fits for my personality. You have a blind spot. And the way to know you have a blind spot usually is if you have smart people around you, successful, smart people who are kind of all telling you the same thing and you keep not listening to them and you’re not finding the success that you want. You probably have a blind spot. Blind spots are really tough. The hard part is you don’t know you have them.  

And turning blind spots into weaknesses and learning about a blind spot and kind of admitting that you just have that as a weakness eliminates it, right? So how do you learn about your weaknesses? Well, I think there are three ways, right? There’s introspection. There’s asking yourself, why do I fail at things? Am I the one that starts too many things, never finishes? Am I the one that never starts things after I finish? Am I the one that makes too much? I avoid conflict. I avoid doing hard things, things I don’t want to do, like marketing or sales? Do I avoid hard work? Maybe my weaknesses is I just never learned how to work hard. I don’t have any discipline. Maybe my weaknesses is I’m really disorganized. I think there’s some introspection to be done here. I do think personality tests have been helpful for me.  

I’m not going to prescribe them for you, but I have taken four, maybe five, and I think I listed most of them earlier in this segment. But I have found those helpful for identifying potential weak spots, especially I remember the Enneagram is really good at this. It will say, this is a strength, and here’s the shadow side of that strength because every strength we have when taken too far is a weakness. And I think the Enneagram does a good job of identifying that. So personality test is number two. The other one is people around you and whether you need to ask them, what are the things that I keep screwing up that you’ve noticed? And again, this is maybe it’s your spouse. These are hard conversations. I mean, it can be hard to hear this and just admit like, yeah, that’s me. This is something.  

This is a blind spot that I have that I’m going to turn into a weakness. Again, having strengths and weaknesses is human. Having blind spots is something that if you want to achieve and you want to be a successful entrepreneur, you can do it with blind spots, but they will hold you back. And I absolutely know founders who have blind spots, who ask opinions from smart people, hear about the blind spots and still don’t do anything about them. And it’s that same exact behavior that happens over and over and over is the reason that I see them not succeeding. And it’s tough because if you just can’t engage with it and admit and be okay, oh, this is a weakness, then it’s going to be something that comes up over and over and it’s going to be detrimental to your success. There was introspection. There were personality tests.  

And the third one asking folks around you, and I think, look, this can be co-founder can be folks in a mastermind, can be again, spouse, siblings, anyone who’s close to you, who has watched you work and watched how you succeed and why you succeed and has watched you fail and has seen why that has happened. All of these are data points. There’s probably no one individual that knows all of your weaknesses, including you at this point, but you gather the data and you take it for what it’s worth. And start to think, when I look at who I want to be, do I want to be a successful entrepreneur, will look at other successful entrepreneurs, folks who come on this show. Folks I mentioned on this show, you’re Jason Cohen’s, your Heat, and Shaws, Ben Chestnut, Dharma Shaw. A lot of folks who I’ll say are successful and they’re on podcasts where they speak up MicroConf, you can start to see how they operate and you can get a sense of their thinking when they’re interviewed or if they write stuff or do talks and to ask yourself, can I operate like that?  

Am I operating at that level? And if not, why? And it’s not to copy. I’m not trying to copy anyone or put them on a pedestal. No one is perfect. We all have strengths, we all have weaknesses, but there are always folks that are ahead of you. I know there are many folks ahead of me and they have helped me over the years reflect on myself and say, why have I not achieved what a Jason Cohen Heat and Shaw Dharmesh, I can name all the names again, but why am I not as successful as them? And maybe it’s just choices I made. Maybe it’s I focused more on my family, maybe just my starting point. We say whatever. There could be a bunch of reasons or it may be, huh, because they overcame their weaknesses. And it took me a while. It took me a long time, I think, to turn some of my blind spots into things that I was aware of.  

So hope you enjoyed those thoughts today on weaknesses versus blind spots. The next topic is the idea that everyone struggles. And this actually came from a conversation I was having with Ruben Gomez, founder Sewell, he’s been on the podcast many times. He told me that someone else told him, they said, you are so successful. It makes me feel better that you have trouble at times, that sometimes you struggle with things. And I thought to myself, well, of course I’ve talked to Ruben almost monthly basis for 14 years or something, so I know his struggles because we talk about them. But it’s so interesting on the internet how things might not come across that way. And Ruben of all people is not someone who is humble, bragging and only talks about the good. I mean, he’ll talk about all the stuff, but it isn’t always apparent just how much struggle each of us is going through.  

And frankly, I’m just going to Mia Culpa here, how many mistakes each of us makes even once we kind of know what we’re doing. The level of mistakes that I’ve made in the past 10 years is pretty incredible. So why have I achieved, I would say each year I’ve been more successful than the last. I’ve had more wins than last. I’m happier now. I make more money. Whatever measure I’ve built, more successful companies, I struggle less. I am less stressed. So by all measures, I would say my life has gone up into the right, and yet I’ve done a lot of things that haven’t worked, and I guess this is maybe more of a personal episode than I’ve done in a while, but I wanted to walk through a few of those failure, you know how they failures. I don’t even want to label. They’re just things that I did that basically kind of didn’t work long term.  

They were decisions that I made that were a lot harder than I thought or just didn’t turn out the way that I thought. One of them, man, going back to 2013, so this is 11 years. When we launched Trip, I had some hubris about the fact that it was going to work, that I knew what I was doing, that I’m a successful entrepreneur. It was my fifth company. Yeah, MicroConf was fourth. TinySeed six. Anyways, it’s my fifth company. And I was like, you know what? I know what I’m doing. I have a bit of money in the bank. I have some experience. I have a good network, I have an audience. I’m a product person. I’ve done this before. It’s just going to work. And then we launched and it didn’t work, and it plateaued at eight. You’ve heard the story plateaued at eight grand a month for months on end.  

And I was just distraught and I had a moment where I was like, I’m supposed to be good at this. People listen to me about being an entrepreneur. Don’t I know how to do this? I thought I knew what I was doing. And it turns out I figured it out. It was grinding, it was working with Derek to figure out the next thing to launch and how to pivot the product. And we did. And it took us, I dunno, maybe nine months from launch, nine agonizing months from launch to get to the point where we had product-market fit, and then things took off like a rocket, and then it was like, okay, I do know what I’m doing. I was just overconfident that it would work right away. If you want to hear all that agony, by the way, go to Startup Stories podcast. You can look in any podcast app or you can go to startup stories podcast.com.  

Derek and I recorded 10 to 15 minutes a week for a year, and then I cut it all to actually not all of it together. I think it was nine hours of audio and I cut it down to 90 minutes and kind of just packed it all in. So you can hear this longitudinal agonizing trip towards product-market fit as we finally did get there. But in the middle, I have a little bit of PTSD. When I listened to it, it was such a hard time of not even knowing what we were building and if we’re building anything for anyone and if it was all just a waste of time. So that was one, like I said, 10 or 11 years ago. How about MicroConf Locals? We launched local events. We are going to do, I’m trying to think of how many we did in our biggest year, but we have our two big flagship events where we have the one in us, the one in Europe.  

We’re going to be in Croatia here and just a week or two after this comes out. But then we wanted to do local events, which were like these First, we were going to do one day events where it’s like eight hours, four speakers and fly into some major cities, and we started doing those and the uptake was not great, and it was a lot of effort. And so we said, well, what if we just make ’em like three hours in the afternoon, almost like a happy hour? I would either do a short talk or I’d interview someone. So I would fly in with a producer and we would basically produce a three hour event. And they were fine. The events themselves were really good, and the people who came, it was awesome, but the local interest wasn’t there. We couldn’t charge enough even to make them break even.  

We were losing money on them, and it was burning me and the producer out because we were on the road all the time, and I went to, I don’t even know, it was 10 events, 12 events last year. It’s just way too much travel. And it wasn’t just the being there, it was getting on the plane. It would wreck 48 hours, 72 hours of stuff that I could be doing that’s not being on a plane, right? It’s recording podcasts, it’s recording videos, it’s writing another book. It’s all the opportunity cost of the travel and the time. And so that was an effort that we decided to, I’ll say put on pause, but it’s done. And so is it a mistake? Is it failure? Well, we certainly struggled, certainly had trouble at times. My whole team burned out last about a year ago, including me, and it was rough, but it was a calculated bet of if this works, it’s going to be great.  

We can do more. We can have local MCs. We had all these plans, but the interest wasn’t there, so I don’t regret it. It’s not a mistake. But we did struggle and we agonized. I agonized over whether to keep doing them. These are hard decisions. Strategic decisions are big and difficult, and it’s like how do you make hard decisions, right? This is a question. How do you know when to quit? How often do you hear this question asked of anyone? Right? It comes into this podcast. People ask Seth Godin all the time. He wrote that book, the Dip, but how do you know when to quit? It was because I knew when it was time, maybe I waited a little too long, but I was out of ideas and it wasn’t working, and I was like, I just want this to be done. And that’s how we knew when it was time to quit another effort.  

That certainly is not a failure. It was the YouTube channel, and the YouTube channel is still doing really well. It grew very quickly over about 18 months, I think we went from like 10,000 to maybe 80,000 subscribers, and then it plateaued. The worldwide audience of entrepreneurs who want to build SaaS companies isn’t that big. Maybe, I don’t dunno, a hundred, 150,000. It’s not millions of people. So to plateau at 80 ish is not the end of the world. But the question was, so do we keep doing this? We were shipping a video a week. It was an absolute grind, and the grind was worth it When it was successful, the grind was worth it when we were adding a thousand to 1500 subscribers every week. Love it. You see that number going up into the right. I can grind for a very long time when that’s happening, but when it starts being three or 400 a week, I have to ask myself, is this worth my time to outline record the cost to edit producer Ron’s time, just all the effort we’re putting behind this?  

Or what if we did less? What if we didn’t do any YouTube videos? What if we did half as many, so it’s every other week we could put that time, that energy, and frankly, those dollars into some other way to build the audience. And so again, not a mistake, but it is a struggle and a hard decision. It was challenging. I think it was six, seven months ago when I finally said, man, we’ve been plateaued for six months. I think we just have to turn this attention to something else. And frankly, we turned that towards the course. SaaS launchpad.co. You haven’t checked it out. It’s all about finding ideas, validating, building a launch list and launching. It’s really the second course I’ve ever built. First one was 14 years ago. This one is way, way better, more complete, more thorough. The course is $500 and it’s worth it.  

I mean, I’ll just say that it’s the best course, certainly best course I’ve ever produced and one of the best pieces of content I’ve ever produced. It’s almost 10 hours of content. It’s really in depth. And if you want to learn more about launching your own SaaS SaaS launchpad.co, so hopefully that segment makes you feel better if you weren’t aware that even successful people struggle at times. Alright, last topic. This one’s a quicker one. I was watching a video, I believe it was Roger Federer, who is an incredibly successful tennis player. I believe he was giving a graduation speech. He said, I’ve played in 1,526 singles matches. I won 80% of those matches, but I only won 54% of the points. So let that sink in, barely more than half of the points and yet won 80% of the matches. I love this metaphor as you don’t have to be right that often.  

I won’t belabor this metaphor and start talking about baseball and how the all time grades only hit the ball, what 30, 40% of the time you get. The point is that successful founders aren’t right all the time. They aren’t right a hundred percent of the time. They’re not even right. 90% of the time. They might, I mean, I don’t know what the number is, but is it 60? It might be be as low as 60, but they try enough things, they move fast enough and enough of their things work. I was talking about this point, and Ruben actually pointed out to me that when I say enough of the things that they try work, he said, you know what you should include there is that they usually don’t work right off the bat that they do work if you iterate on it and focus on it.  

And I really liked that distinction. When I say they work on a lot of things and most of the things they do work is most 55, 60, 65, 70, it’s in there somewhere. Seriously, it’s not 80 or 90%. 80 or 90% of the things I do don’t work. But the ones that do have asymmetric upside and they push the business forward and they push my life forward and they work, and that’s the pattern that I see with successful entrepreneurs and frankly, someone who’s successful at all with their life. They just generally learn to make good decisions and follow through. But I want to underscore that point of for it to work for you to be successful on 54% of those points as Roger Federer, that usually won’t just happen right off the bat. It’s not like I’m going to start this marketing approach. Yeah, it’s just going to work. I’m going to launch this product. Oh, it just worked right off the bat because successful folks, 54% of the time are right. That’s not how it works. You launch something, you iterate, you take feedback. You try that marketing approach, you iterate, you take feedback, and eventually you kind of grind it to the point where it works. Usually 55, 60, 60 5% of the time. That’s going to be it for me today. Thank you so much for listening this week and every week. This is Rob Walling signing off from episode 733.

Rob Walling:
You’re traveling through another dimension, a dimension not only of sight and sound, but of mind, a journey into a wondrous land whose boundaries are that of imagination. That’s a signpost ahead. Your next stop startups For, the Rest Of Us. Welcome to this week’s episode. I am Rob Walling and you might recognize that intro from the amazing and talented Rod Sterling who created and wrote so many episodes of one of my favorite series, the Twilight Zone, but this is not the Twilight Zone. This is Startups For, the Rest, Of Us, where every week since 2010, I’ve shipped an episode focused on helping bootstrapped and mostly bootstrap startup founders. We’re founders who seek freedom, purpose and relationships, and we don’t want to sacrifice our life in order to build our startup, but we want our startup to change our life for the better. Today’s conversation is pretty incredible. 

It’s a founder who effectively bootstrapped. He uses the word bootstrap because they raised a couple hundred thousand dollars and if you’re in venture capital land that is bootstrapped, usually it’s anything less than a million is considered. Bootstrap built his company with a co-founder for 15 years and had three subsequent exits to private equity where he sold a portion of his equity in each one. The last exit was for $615 million. It’s an incredible story and my guest today is extremely knowledgeable and extremely accomplished. Before we dive into my conversation, the SaaS Launchpad is live. It is the best course I have ever created. It is the most comprehensive. There are reviews coming in already of people who are blown away by the depth and the quality and the quantity of the content. It’s at SaaS launchpad.co if you’re interested. And as of the day this episode goes live, if you buy the course in the next six days before September 30th, you’re going to be able to get on a live q and a call with me where we’re going to do a group call, talk about questions people have from the course or probably about anything else. 

To be honest, SaaS launchpad.co. I’m so confident in this course we have a 30 day no questions asked money back guarantee, so really there is no risk for you to check it out. That’s SaaS launchpad.co. And with that, let’s dive into my conversation. 

Jeff, thanks so much for joining me on Startups For, the Rest, Of Us. Hey Rob, thanks for having me. Yeah, so as background for folks, you are at retired founder on Twitter, and your story is pretty incredible. Your, I’ll call it your personal H one, which is your Twitter bio says, retired SaaS founder sold the business for more than $600 million Seeking purpose and community post exit. You bootstrapped a company and sold it for a crazy amount of money. So why hasn’t everyone heard of you? Why is it in your name across the marquee, there’s people with huge YouTube followings that have done a fraction of what you’ve done, what’s going on  

Jeff:
There? I guess the obvious answer would be, I must not be that interesting, but perhaps beneath that is I like to keep a low profile just for my own safety and security, and by being anonymous, it also helps me be completely authentic with anything I have to talk about.  

Rob Walling:
And then we’ll dig into that today you’re willing to talk numbers and all the stuff you were telling me in the pre-interview, I was like, whoa, okay, that’s great. And so that is, you’re anonymous, but I have vetted that you in fact have done these things. And so folks listening as the first anonymous guest, it’s kind of neat to have someone who has had such an incredible journey. I want to start by taking us to the end, so to speak, the exit and you can explain how it’s actually exits, but what I really want to go to is that moment that you refresh that bank balance and you realize I never have to work again. I’m all set. What was that emotion? What was that feeling?  

Jeff:
Oh man, the first word that comes to mind is relief. And following that probably enthusiasm. As a bootstrap founder, it’s very difficult to take a lot of risk. So when we sold the business the first time to a private equity firm, and if anyone wants to contact me on Twitter or wherever, I’d be glad to share details about who our banker was, who the private equity firms were, but I’m going to keep those anonymous as well for now. But I was excited to work with people and actually be able to put money into the business and pursue some of the crazy ideas that I had as a founder. But when you’ve got 98% of your net worth wrapped up in your business, it’s really challenging to say, Hey, you know what? This is a crazy idea and I think it’s a five x payoff. If it works, it’s hard to pursue those things. 

But the first thing was relief. Man, I listened to your latest podcast and your guest talked about sleeping for 14 hours. If anyone gets to retirement, I dunno if this is good news or bad news, but the best thing is the sleep. It’s just so great to sleep. It’s so peaceful. Oh, it’s so peaceful. I went a dozen or more years where I was asleep, I was unconscious, but I was still at work. My dreams were all involving work and to be able to actually get to sleep is great. So that was the first thing,  

Rob Walling:
The biggest perk. Yeah, and to give folks an idea of the timeline real quick, we’ll talk through this in more detail, but you co-founded the business in 2003. You sold a majority share of it to private equity in 2017, so 14 years. But then you got a what they call a second bite at the apple and a third bite at the apple, meaning you rolled equity and you had another exit in 2020 and then you had a final exit in 2022. That’s the $615 million exit and it was 14 times a r. So that’s an interesting thing. Let’s talk about that real quick because people ask all the time, if I’m doing 2 million and growing at blah, what’s my revenue multiple? And it’s always like, it just depends. I can do a bell curve of the past 20 exits that I know of. I can give you the range, but I know a friend of mine who is a m and a advisor and he got someone a 23 XARR offer and then I heard someone three days ago who got a two XARR. So is that the range? It’s two to 23, it just depends, right? It depends on the space and the market and the growth and the this and that. There are the most common parts of the bell curve for SaaS 10 to be in that, what is it four to? It’s about five to seven, but you see five to eight and it depends on the market. So 14 is a great, great multiple. Why was that the case?  

Jeff:
It was a combination of things. I mean the market was very strong at that moment in time in early 2022, so that can’t be disregarded, but the mental model I used when describing this to people considering selling their business is a slot machine, and I didn’t know this going in or I would’ve had some better numbers, but just excluding market conditions. You take your revenue is sort of the first real of a four real slot machine and then you take your gross margin. I’d never really calculated our gross margin. I mean I knew how the business worked, but I’d never really dug into what our gross margins were. We were about 90% gross margin. It was a mature product. It was all our own code and open source. We didn’t have any licensing costs. We had high gross margin. That’s real. Number two. Third is retention. I knew we took really good care of our customers. It was one of the reasons we had I think such a good outcome and took so long was our patients, but we took really good care of our customers. We had 117% net retention, so it was  

Rob Walling:
Negative 17% churn.  

Jeff:
Yeah, negative 17% churn.  

Rob Walling:
That’s unbelievable  

Jeff:
And happy to talk about some of the strategies that helped that. My favorite of which is short-term generous, long-term, greedy, which I’m glad to talk about later, but the fourth reel is growth, and at the time we sold the first time we got seven times revenue, so seven not nearly as good as 14 obviously. But if you think about that slot machine, our growth was only about 20, 22% a year when we sold. So if we would’ve had a hundred percent growth and 90% gross margin and 117%, that would’ve been a jackpot. But we were kind of like jackpot, jackpot potato for that last reel on growth, but perhaps the private equity company that acquired the majority stakes saw that we had. We had a lot of potential because we weren’t aggressively spending in sales and marketing at that time.  

Rob Walling:
And let’s give folks an idea of what the business was. We’re not going to name the business because very quickly someone could find your identity, but it was a bootstrapped SaaS company. And what industry did you operate in?  

Jeff:
Yeah, we were business to business security software and if anyone wants to find me, I’m not hiding, send me a message online or on Twitter or something and just like with you, glad to introduce myself, but it was business to business SaaS.  

Rob Walling:
Got it. And starting in oh three, there really wasn’t, I put in quotes, there wasn’t SaaS, constant contact was around and MailChimp was just, and Basecamp was a couple years later, but were you charging a subscription when you launched it in oh three or was it one time back then and then you migrated to subscription later?  

Jeff:
It was an abject failure to get licenses is the honest answer. That’s amazing. I’m a salesman by trade, so of course we were trying to get a hundred grand for the software and then the way it used to work is you’d pick 15, 20% maintenance ongoing, but we weren’t able to do that. We were two guys in a dog and the dog was a loner and nobody wanted to give us the money. It was really Salesforce that I recall as being one of the real earliest pay as you go, the difference in our case, we adopted the pricing model of a subscription, which I think was very healthy for customers and for the tech companies, but we were still OnPrem, so we were shipping servers, still probably shipping on-prem servers to customers, but it was really the licensing that was rather novel at that time in 2003, and again, driven out of necessity, not some kind of foresight or wisdom.  

Rob Walling:
Ben Chestnut, co-founder, MailChimp, I interviewed him at MicroConf, he basically said the same thing. He was like, we were just charging one time because that’s what we thought software was and then suddenly we realized we need, I don’t remember why they switched to subscriptions, but it was very much an accident for them as well. So talk to me, you told me offline that you started in oh three, you became profitable in oh seven, so four years of what I would call grinding. Were you working a day job at the same time? How can you be an unprofitable, bootstrapped company? Those two things, you don’t have burn rate because you don’t have cash in the bank.  

Jeff:
Yeah, I was not working another job. I was unemployable at the time for clarity as well. We did raise $350,000 of an angel round, so mostly bootstrapped  

Rob Walling:
Is how I should call  

Jeff:
It. And that was the last capital. That was the last capital then. And I had a previous company that I sold in a.com company that let’s not venture into waste time in the interview here, but I had a little bit of money left over from that after failing at a couple of things in between. So we were burning money at home for a long time. It was a tough first five years.  

Rob Walling:
So mostly bootstrapped is obviously what I refer to that as. So as you hit profitability in oh seven, what did the company look like? Was it still small? Was it you and your co-founder? Did you have much of a team?  

Jeff:
Yeah, it was a first year. We did a million dollars of revenue was 2007, I think we were at about seven employees then, so it was just the two of us for a year. We did $9,920 of revenue our first year in 2003. Yes, I remember. And I have a copy of the purchase order I could put my hands on right now.  

Rob Walling:
That’s cool.  

Jeff:
That was a big day. Yeah, a million dollars of recurring revenue  

Rob Walling:
In the journey between oh three and 18, which 15 years. That’s when you retired. You did the first part of your exit, partial exit in 17, then you retired in 18, and then you had these other exits afterwards because you just owned shares. Right. What I want to find out is do you have a memory of I guess one of the hardest time periods or one of the hardest moments, a time where you kind of said, well, this might be it, this isn’t going to work. Or maybe it was months of stress fighting spammer. There’s always, every entrepreneur has many of these stories, but you have any go-to story of like, this was terrible.  

Jeff:
Yeah, I’ll give you one early and I’ll give you one late. The one early is sort of a combination of stories, but I remember a year in two years in something like that, I mean we are doing almost no revenue and it’s just not working. And I think we were a little bit early for the market we were in and it’s security software, so it’s difficult to get a beach head and just thinking, man, if I had any other opportunity, I mean any opportunity like three grand a month and a dental plan and just like relief from the pain I’m going through, I would’ve jumped on it. And I remember a particular moment where I was fighting with the printer or something like that and I was just really angry and frustrated and I think that’s one of the things, I mean I hope your audience takes from me and from each other is that it’s hard, man. 

It’s hard and it’s lonely and having somebody to talk to authentically where you’re not in pitch mode and talking about how great it is and feeling like everybody else is doing great and you’re not, but it’s really hard. It was hard and it was lonely. The second one I’d give you was late in the process and was a contributor to deciding to sell the business, and this was 2015, I believe, where we were doing well and I had taken a loan, I built an office building for the company and I took a loan of $6 million with a personal guarantee. I didn’t have that kind of money, but the company had cashflow at that point to support that, and we had a security breach. Nothing was lost, but someone got through the first level of our security. It wasn’t our software as a piece of open source code. 

I don’t remember what it was, but we were stuck and one of our customers said, Hey, we’ve got a red light on the dashboard here. Somebody broke through the front line of security here and they’re checking the doors to the vault. Then another customer, same thing. So we were under attack at that moment in time and I just signed a loan for $6 million to build this and in security software, one bad line of code could ruin you, wasn’t our code, couldn’t fix it. Totally out of our hands, and that’s a moment, I won’t forget, that’s a moment that all the ships were down and we didn’t really have any ability to play the hand. It just, our team came together and when fix was available, we fixed it. But that’s one that I won’t forget.  

Rob Walling:
Yeah, that sounds terrifying and that the longer you do this, I’ve seen so many founders now get hacked, get cease and desist. I have employees embezzle have, it’s just these edge case things you hear about, you’re like, well, that’s such an, that’ll never happen, but it’s like, no, it’s either I have view across 191 companies, so that’s a law of large numbers. It’s going to happen to some of ’em. Or you had your one company but you did it for 15 years and so the odds of something happening in that timeframe is, and it’s terrifying. How did you handle it in the moment? Some people completely freeze up and don’t know what to do and panic and that’s there’s fight, flight or freeze I think are the reactions. Do you remember panicking and then calming down and saying, well, we just got to fix this or what was your MO there?  

Jeff:
Yeah, I got plenty of weaknesses, but panic is not one of ’em. Equanimity I think is one of my strong suits, but this was a case. I’m a salesman by trade, so I didn’t have any ability to understand really what was going on and had to rely on the team. And I believe it was a Friday night and we just got to the point where there wasn’t anything else we could do. I think we approached it rationally and then you talk about the events that just sort of happen to you. There’s just a big wheel in the sky that spins and sometimes your number comes up and that happens. That could be getting a disease or getting in a car wreck or in this case having a piece of software that you were using that had a vulnerability. And fortunately we were able to work through it. Fortunately, the other safeguards that were present in our software held strong. I dunno if it’s interesting, but a lot of security software you could say is like it’s an alarm or it’s a fence or a moat or a gate or something. We were a vault. We protected the vault of some very important customer information, casinos, law firms, banks, hospitals, things like that. So it was not a system that could fail without massive repercussions for everyone. So anyway, glad to have that behind.  

Rob Walling:
This is going to be a tricky question or maybe you’ve already thought about this, but why did the business work? Why did it work so well that it was obviously a massive success for you and your co-founder and even the private equity firms that bought it and resold it. What is at that core, feel free to talk about you and your co-founder that you executed Well, I think the founders themselves have to be pretty instrumental in any business like this working, but people say, well, it’s the market or the idea was the right time. We got a little lucky with timing. We got whatever. How do you think about why this business works so well?  

Jeff:
Yeah, a combination of things. It’s always a great question in a group to say, Hey, what percentage was success and what percent was luck? And it was definitely a combination. I think of it like winning a poker tournament. Sure it’s possible to not even know what you’re doing and just go in 20 times in a row and win. I think one, it was a good idea. It was my co-founder’s idea. It was ahead of its time, but it was a good idea and we caught a wave five years in, 10 years in that picked up steam. I would say we had a good division of labor in the startup where my co-founder was a brilliant coder. He was technical, I was sales, so if it had to do with code, it was him. If it had to do with the business, it was me and we stayed out of each other’s way, which was good. 

We didn’t go too far too fast. If I would’ve had an ability to raise venture capital early, I probably would’ve done it and that probably would’ve been a mistake. So again, we took the long view on things, short-term generous, long-term, greedy, anything we could do to get the product in the customer’s hands and using it, we know we would succeed in the long run. We deferred gratification, so we didn’t have a big fancy office. We had a crummy office for a long time while we were profitable. We didn’t get hit by a lightning bolt out of the sky is definitely one.  

Rob Walling:
So we just didn’t get killed in the stayed  

Jeff:
Alive, cease and desist letter sued by a customer, a breach, sued by, we never got sued, which is nice. So really a combination of things. Rob, over the long period of time, I mean I don’t want to shoo away any credit. I think we made more good decisions than bad decisions. I think we recovered quickly from our bad decisions. We weren’t afraid to take certain risks that had favorable payoff conditions and we weren’t in a rush. We went, I call it bootstrap. We had a small amount of money from outside investors that got us over the line.  

Rob Walling:
Yeah, that’s a big thing. I mean, there’s so many directions I want to take that I’ve talked a lot lately about how, or be it lately, about how I think success of when I look at TinySeed companies, are the founders multiplied by the market or the opportunity? And the reason it’s multiplied is let’s say you have a founder who’s a one out of 10. If we’re just going to have a numerical rating scale, but it’s a great market opportunity, they will execute mediocre and they may have a middling a success, but if you have a founder who’s a nine and they have a real market or it’s a market that they don’t get a little bit lucky with or they don’t hit at the right time or whatever, then it’s similar, it’s middling. And we see a few tiny sea founders just like you are such a good founder and I’m so sorry that you’re just not getting the traction. 

This sucks. But it sounds like between you and your co-founder, that division of labor, and it sounds like both of you really executed well and then you have that market and that multiple, you multiply the nine by nine or the 10 by 10, suddenly you’re at a hundred versus these are all contrived, but you get the idea what I’m saying. And there are more factors in that, right? I mean there’s luck involved and there’s all kinds of stuff, but it’s crazy to see such an outsized outcome. There just aren’t that many nine figure bootstrapped exits like this. So I want to touch on something you’ve said a couple times now and it’s short-term generous, long-term, greedy. Can you flesh that out? What you mean by that?  

Jeff:
I think this is one of the benefits of being a bootstrap company. We didn’t have a quarterly number that we needed to make, and that means you don’t ever sell the product to someone who’s not a good fit. You sure try not to. There could be an occasion where there’s a prospect and they really should buy your competitor’s product, but you need the money or you need to make your number for the quarter. And we never did that. And then there were occasions where maybe the person we were dealing with had a very low budget authority, including our first sale of $9,920 in December of 2003. And you think, well, geez, this is a customer that should be a hundred thousand dollars a year customer, $50,000 a year customer, and the person you’re dealing with is enthusiastic about it, but they can’t convince their management or they don’t have the budget. 

And we’d say, what do you got? Can you sign for 5,000? And we would do that. We would do that consistently. The way our licensing worked as well was the product did not have a feature that would exclude someone from using the product because they’d exceeded a license account. So we sold on concurrent licenses. There’s a number of ways to do it, and it was also a generous way to do it was concurrent versus named users, which people liked. And then if we thought, Hey, you’re going to need, let’s say 50 concurrent users and that’s whatever it is, 10 grand a month, we would say, I’ll tell you what, first year we’re going to charge you for five and take advantage of us. I mean, just rip us in half, get up to, I hope you get up to 75, catch up with you next year, and if that’s a problem, we will work with you from there. 

So you go from, you could be sitting around forever trying to get that 50 concurrent license thing, but I’ll sell it to you for cheap for five because I know you’re going to like the product. I know we’re going to take care of you. I would say also we had a methodology or a viewpoint that we never tried to avoid our customers. We had a phone number that spelled the company’s name and you could call that number and one of our people would pick up the phone and help you through a problem. And that the idea was always, let’s try to give great support where no matter what, even if you forgot your password, we’re not going to farm you out to someone else. We’re not going to send you through an IVR. We’re going to try to get a human to pick up the phone and then after we surprise and delight you with some great service, we’re going to take an opportunity to say, Hey, by the way, is there anyone else in the company maybe that could use the product? Or are there other things we could do better than once you’ve done a good job serving them? So that’s just another example of being generous and greedy at the same time.  

Rob Walling:
Yeah, I like that. It’s really long-term thinking, and I like the way you say long-term, greedy. It’s intriguing to be thinking that way because so many folks don’t think about running a company for 15 years. Right, myself included, although I have run MicroComp now for 15 years, I think 14, as you were going along, did it feel like 15 years or was it just something that you kind of didn’t question and you just did every day? Similar to I talk about why this podcast has shipped every week since 2010. People say, wow, that’s a long time. It doesn’t feel, I mean when I look back, it’s a long time, but this isn’t work for me. I do this, I love it. And frankly, MicroConf is just something, it’s just part of me and it’s what I do. My last SaaS company Drip was, it was not an identity, and I never thought I’d run that business for 15 years. So I’m just trying to give examples of some of those really fit of, I’m just going to do it and it did what it did and others, I keep going. So I’m curious to what your feelings were during that 15 years of working on it.  

Jeff:
Yeah, it’s a great question. I’d say time moved at different speeds in different parts of our history. So the first couple of years crawling over broken glass, it was like time in the dentist chair. It couldn’t have gone slower. The first few years felt like a hundred years once we got to profitable and had a pretty good sense that we were going to be okay, that part went fast. So from 2007 till the time we sold a majority share, that 10 years might’ve felt like two. Although there were some struggles of course along the way. I don’t mean to think it was all sunshine and roses during that 10 years, but that time was really good. We had a small team. It was a good team. We worked well together. It was small enough where you knew everybody. It was big enough that you could take a vacation and expect that the company would still be alive when you returned.  

Rob Walling:
I want to ask you a question that I think some people are probably thinking right now, which is with an exit like this, you yourself took home a tremendous amount of money. Is it just shy of a hundred million? Is that accurate?  

Jeff:
Yeah, the total, I’m happy to walk through the transactions if it’s useful, but yeah, I think that the total was about $88 million  

Rob Walling:
That went to you directly.  

Jeff:
That went to me from the equity sale in three chunks.  

Rob Walling:
How do you keep going? What do you do next? That money, I know it came in three chunks, but how do you think about how to stay busy? If I had that much money, I wouldn’t go back and grind, right? I mean, hell, I have way less money than that. I’m not going to go back and grind. You know what I mean? So it’s like how do you possibly think about what to do next to keep yourself happy, to have an impact, to keep learning, to stay sharp without maybe getting back in the game? Unless, did you ever consider getting back in the game?  

Jeff:
Yeah, boy Rob, I could go hours on this. I’ll try to distill it as best I can. Everyone has a number in mind. If I could get this amount of money, then I’d be set and I’d be done. Mine was 10 million. And I think most people, when you say, my number’s 10, you really think of 20. So that was life changing. I was done there. And then first check was 21, second check was about 43rd check was 27, 28. And I remember in vivid detail the day we sold cash in the check, taking my family out to dinner in a limousine, what we had to eat, I could bring you to the table where I sat. Second time we sold Rob $40 million. It closed early in the morning. I was in a conference room by myself. I don’t remember what I did that day. I mean, we might’ve gotten pizza that night. 

Honest to God, I don’t even remember, and I’m not sure how useful this is to your audience, but I mentioned this on another podcast I was on. I think most people have a default perfect amount of spending, meaning maybe you can afford to fly first class and stay in a nicer hotel and I dunno, have a decent car. Whatever it is, everyone has their sort of ideal amount of spend. And when you have less than that, life is of course painful because wanting to rise up to that. There’s also another side, and I can already feel the eyes rolling in the audience that my eyes would’ve been rolling as well, that when you’re above that, if you have more money than you can spend, it creates a certain kind of an issue as well. And just some examples of that are feeling the need to maybe go do it again or give it away, and it’s just more challenging than you’d think. 

I made a lot of the mistakes that I think people who sold their business make you do what the world tells you you should do. You go to try to work with nonprofits and you realize how frustrating and slow that is. If you’re a founder. I bought a bunch of stuff. I had four houses in a jet at one point and realized stuff isn’t where it’s at. Experience and community and relationships are much more valuable than that. And I also grossly underestimated how much I would miss the structure and the purpose and the identity that I had in my former life. And I know I’ve been talking a long time, I can hear myself talking, but I just want to say to the audience, if you’re rolling your eyes right now or you’re saying, what a moron, just believe me when I say when I was starting, I would’ve said the same thing. How is it possible you have this giant pile of money and you don’t just write off it at the sunset and spend the rest of your days with frozen drinks and sunsets and boats?  

Rob Walling:
Well, it’s boring. I did it for six months, and again, my exit was much smaller than yours, but took six months off after and I was like, I was in my early forties. This is not what I’m doing forever. I need to learn, me personally, I need to learn. I need to have an impact. I need to do all that. The thing I struggled with was my whole life growing up, we didn’t have much money, so it was always a constraint. I had a very scarce mindset around money, and a big part of me for entrepreneurship was like, I want to have the freedom to work on interesting things that I want to, but I also want to be set for life at some point. That was a goal. And so I achieved that goal and then I was like, whoa, I’m like 40 years. 

That’s been the driving goal for me. My North Star was to have enough money in the bank in cash that I never had to work again. And then I was like, so what do I do now? And I had MicroConf this podcast, I had stuff that I could work on and do, but I needed a new North star. And my new North Star became to multiply the world’s population of independent self-sustaining startups that is now truly my North star. Everything I do with books, the podcast, YouTube, MicroConf, TinySeed, that’s what I do because it brings me joy and it is, I view it now as my legacy. Did you have a similar transition where you were like, my north star is growing the company or wealth or whatever, and then you had to take, I mean, it took me six plus months to figure mine out of thinking about it a lot. I was actually kind of stressed about it, but did you reorient around something new?  

Jeff:
Oh gosh, bie, congratulations. By the way, you have accomplished something. A lot of people in my situation or similar have not six months is a, you’re much smarter than me and a lot of others that I’ve worked, and I stood up a group called Beyond the Finish Line. It’s b tfl.org if anyone is in the same situation. But I can distill a lot of the conversation is this, I want you to picture a Venn diagram, two circles. One of them is doing something important with people and trust. It’s being back in the trenches. It’s going to war with your friends and being an important part and being useful in that. Okay, that’s one circle. And the other one is absolute freedom and autonomy and independence to do whatever you want anytime you want. And as it turns out, the joke is it’s not a Venn diagram. There’s two circles. 

There’s no overlap. That’s great. And so the key I believe, is to find something as you did, and I have friends that are in the group that have found something that is worthy of sacrifice of that second circle. So if there’s something that you feel passionate about or you feel like you’re giving back enough, you’re useful enough, you’re willing to say, I’m a skier. So I’m willing to say, you know what? We’ve got perfect ski conditions today. I got six inches of powder. It’s blue skies. The lines are short, it’s 20 degrees and the light’s good. And I have to say, I can’t do it. I can’t go out. I can’t go ski today. So it has to be something that’s worthy of sacrificing your independence. So kudos to you for finding that. And the North Star I use now, or I try to use now is energy. 

So if I’ve got something like I’m enjoying talking to you, I was looking forward to talking with you today. If it’s giving me energy, it’s good. And it doesn’t matter how much money you have in the bank, Robin, anyone else listening, it doesn’t matter how much money you have in the bank, if you’ve got low energy, life sucks. It doesn’t matter that you can push a button on your phone and have a plane come pick you up somewhere. If you’re not at looking forward to the day and you’re not looking forward to what you’re doing, your energy’s low. Life sucks. And if your energy’s high, it, maybe I’m working on a home repair project or something, if my energy’s good, life is good. So that’s the new scoreboard because it’s not money anymore.  

Rob Walling:
And that is a big mental shift that I think some people make and some people don’t. And so I want to wrap the interview and give folks a few calls to action. You have several different things that you’re working on. You already mentioned beyond the finish line, which is btl.org, and as you said, if someone is post economic, they can hit up there. In addition, you are at retired founder on Twitter and retired founder.com, and I wanted to read not your H one. Your H one is Hello fellow founder, and you talk about your exit, but the second paragraph down is this is not a pitch for anything. I have nothing to sell you. I have enough money, so I love that I have enough money, so I promise this is not an intro to my coaching service, paid subscription or anything else. My only goal is to help founders. And so you have a contact page there if folks want to reach out, and what do you want them to reach out about? What typically do people want advice from you about?  

Jeff:
Yeah, so let me start with the negative response on that, which is the real generic ones I can’t help with. What kind of business should I start those? I try to write, and I’ll need to spruce up my website before this publishes, but I’ll try to write a very basic applies to everyone, answer to a very basic, applies to everyone, question the ones that are useful or people that have a particular situation or problem that I can help with. If someone does business to consumer or they’re trying to open up a market in Asia or something, I can’t help, but I’ve had, I dunno how many calls and this brings me energy, so I’m so happy to do it, which is why I don’t need money. I don’t have a coaching service, I don’t have anything else. It just gives me energy. I’ve been, I think, an authentic ear for the people who are going through it. 

And that’s where I think I can provide some good in the world from people who can’t make payroll, from people who are thinking about a big partnership, thinking about selling. Their spouse is telling them to get a real job. I talked to a guy whose co-founder committed suicide in their apartment. I’ve talked to people who are in the process of making mistakes that I’ve made. And I think it’s really a relief for a founder to be able to talk to someone who’s been through it and can say, yeah, me too. You’re not alone and it’s going to be okay while not having to secretly pitch me for an investment. I make no investments. No investments in anything. That’s the trade. I’ll not write a check, but I’ll not ask you. I don’t want any shares, warrants, options, nothing. I want nothing.  

Rob Walling:
And they don’t need to pay you. You don’t charge per hour. You don’t have a product. Yeah, very cool. All right, so that’s retired founder.com if folks want to reach out. In addition, you mentioned to me that you are interested in doing more podcast YouTube videos. So if someone’s listening to this and they feel like Jeff might be a good guest on their show, you can obviously ask him. He’s very open about a lot of stuff. He could dig more into the transaction. There’s a lot more that we could talk about, but due to time we won’t. So feel free to contact Jeff, either DM on Twitter or head to retired founder.com. Jeff, thanks so much for joining me on the show.  

Jeff:
Thanks for having me, Rob. I really appreciate and enjoy your work. Nice to be in touch with you.  

Rob Walling:
Thanks so much to Jeff for joining me on this week’s episode of Startups For, the Rest, Of Us. And if you think Jeff’s story was interesting and that he’s knowledgeable, after our conversation on this episode, I asked him if he would be a TinySeed mentor and he accepted. So this is how we’ve built at TinySeed. What I believe is the best mentor network in the world for B2B SaaS companies is finding people who are not the headline name, who have had their name splashed all over everything that we all know. It’s people who have been grinding in the trenches and built an incredible knowledge base and experience, put in the hard work, learned the skills, maybe got a little lucky, maybe it doesn’t matter. It doesn’t matter how lucky you get if you sell for that amount of money. I really appreciated Jeff’s transparency and him sharing his knowledge. And as I said, he’s now a TinySeed mentor. So that gives you an idea of the types of quality and experience that we’re looking for in that role. Thank you for listening to this episode and every episode. This is Rob Walling signing off from episode 732.

Rob Walling:
You’re listening to Startups For, the Rest, Of Us. My name is Rob Walling and I am your host this week and every week on the show today, I welcome back Derek Reimer and we talk through some really interesting listener questions, how to delegate as a perfectionist, how to organize and think about SaaS partnerships and planning your next quarter as a as super small team. We’ll jump into those questions in just a moment. If you haven’t checked out my new course, the SaaS launchpad, head to SaaS launchpad.co. This is the first course I have created in 14 years. It is incredibly in depth. It’s a video course with transcripts and worksheets and quizzes, and it’s all about early stage. It’s all about going from zero to one, going from finding ideas to vetting them, to getting them launched successfully. SaaS launchpad.co if you want to check it out. Now let’s dive in to listener questions. Derek Rimer, thanks for coming back on the show.  

Derrick Reimer:
Pleasure to be back.  

Rob Walling:
So I have some really good questions today. Continuing on this topic of more intermediate to advanced questions. The first one is from hello, it’s Ali on Twitter. Ali asks, we’re at $32,000. I’m going to assume that’s MRR and we’ve done it through long hours, endless experimentation and a lot of good luck, hard work, luck and skill. Sounds like. My question is, how should co-founders with perfectionist tendencies delegate work and what qualities should they look for when hiring? And then Ali actually goes on to ask two or three more questions, which we can take in due time. But as someone with perfectionist tendencies, we laugh because you and I are both that way in certain areas. So  

Derrick Reimer:
That’s the name of our band.  

Rob Walling:
That is my co-founders with perfectionist Tendencies. Tendencies, just perfectionist tendencies for short, what are we? Like a third wave ska band.  

Derrick Reimer:
Yeah, perfectionist.  

Rob Walling:
Yeah. No, I think that’s it. You can be the guy. You’re the guy just dancing on stage. I love to dance. Tuba, no drum, major drum major. You’re drum major drum  

Derrick Reimer:
Sax.  

Rob Walling:
Alright, and sacks. I forgot that everything’s in B flat people. We have to play it all in B flat. Okay, so back to Ollie’s insightful question, perfectionist tendencies, which I think a lot of founders, not all, but a good chunk of founders become founders because they really want control over things. They don’t like a day job because they’re ordered around and they work with people they don’t want to work with and they can’t hire and fire, but whatever. And I want to control because if I can control everything, it will be better. And oftentimes that’s true, but it doesn’t scale. You can’t run, I say Canton quotes, you can’t run a million dollar 2 million a or SaaS company with just you at some point you have to let some stuff go. So to that point, how do you think about hiring people to do that you’re a perfectionist about and what qualities do you look for?  

Derrick Reimer:
So I think there’s, as I was thinking this through, there’s kind of two buckets, two different kinds of delegation I think. So there’s the mindset or the task before you of I have some less skilled work that’s not worth spending my valuable founder time on and when I could be working on higher leverage things, so maybe bookkeeping or scraping some data to build a cold email list or even support, which is I think is something that a lot of founders hold on for way too long. So there’s kind of that bucket of things that’s like, okay, my time’s valuable and this stuff is potentially not worth my time. Then there’s the stuff that’s like the business needs certain expertise in order to keep moving forward. And though I want to hold onto this thing, actually I’m not the best person for the job. So then that’s delegating stuff that’s really not in your zone of genius. 

And a lot of times when you’re just starting out, depending on what your resources are, how much funding you may have or may not have, you just got to roll up your sleeves and do it. But I think that that ends up holding you back at a certain point if you’re just holding on too tightly onto something where it’s not actually in your zone of genius. So for that, it feels like an obvious answer, but it’s like, look for someone better than me at the job, someone who has that particular specialty. So I think about the initial branding for iCal. I did myself and it was fine. And then we came to the point of I feel like this is holding us back in certain ways with being able to really push our marketing forward. And I looked to someone who’s just this amazing kind of brand designer and has just a ton of skills on the aesthetic side of things where I just get a little bit limited. 

And it was so fun to work with someone who is actually an expertise in their field. So I feel like I don’t know this one, it takes a while to get to the place where you’re comfortable with it, but as soon as you embrace the fact that no, it really is a joy to work with people who are actually better at stuff than you and you get to be a collaborator with them, it’s not that you have to totally offload it and now you have no say ideally if you’re still the founder in the CEO driver seat or whatever, you are still collaborating on important things, but you’re not the bottleneck anymore on holding back that area of the business. Those are some initial rambling thoughts.  

Rob Walling:
I think it’s a key differentiator you’ve made between delegating things that you really shouldn’t be doing. I would include customer support in that. Now, in the early days, doing customer support is really helpful. As a founder you learn a ton as you transition. I believe I did email support with Drip for three months, four months, and then we brought Andy in to, he was doing part-time stuff, but he obviously is better at customer support than I am. And people say, well, I don’t want to lose touch with my customers. It’s like, yeah, Andy fed me all the feedback. Anything that was real feedback, we like, Ooh, this is coming up, you and I learned about it, you and I fixed it. So I would lump that in. But I like that differentiation of what starting to figure out what is your zone of genius? Because just because you’re a developer, not everyone listens to the show as a developer, but a lot, just because a developer doesn’t necessarily mean that development and or product are your zone of genius, you might find that you’re really good at left brainin marketing as folks like Ruben found out as folks. 

I found out, I’ve been writing codes since I was eight years old and I loved and I was a developer and I identified as a developer. It turns out I’m pretty good at building audiences and at coming up with educational frameworks that the stair step method and being an entrepreneur is making hard decisions with incomplete information and writing books. And I have this other thing that I’ve found in myself of almost like, I don’t know, it’s marketing, it’s copywriting, it’s whatever, brand building and stuff. So all that said, there are really only what six areas of a SaaS company. There’s product which is deciding what do we build next and how do we build it, how does it work? There’s design, which is obviously the visual aspect of that. There’s engineering, which is building right in the code, keeping things going. There’s marketing, there’s sales, there’s support and there’s success. And then there’s hr, legal and finance. But you should delegate all that. I mean you have to do it. Look on day one, you have to do all those. If you’re a single founder, if there’s two of you, you have to split up those six, seven things I just named. But what you said is exactly right, which is if you’re going to hire, you need to hire someone who’s better at it than you. And that’s something that I really didn’t realize until in the last 10 years.  

Derrick Reimer:
Yeah, I think that’s what a lot of us, when you put yourself in a position, maybe an artificially elevated position of I know best I started this company and I have the vision for it. And I mean I totally understand this pull to hold on tightly to everything. And I think sometimes that can lead you down a path of like, okay, I just need to find extra hands. I just need extra hands to delegate, to offload some of the stuff that I’m still going to hold on tightly to and own. And I remember when we required, drip was acquired and we joined Lead Pages and we brought on Brian Reed as our first designer. And I never fashioned myself as a graphic designer, but I think I’m a pretty good UI ux designer. But working with Brian definitely opened my eyes to like, okay, here’s somebody who has worked in companies where we need to actually start to scale a design department. 

And that is a different thing than having the expertise to take something from zero into something that customers love and use to then scale it into systems. So he started working on what’s our design system and it’s not, doesn’t necessarily mean spending a bunch of time working on something that’s not actually moving the product forward. A bunch of internal work. We did very lean on developing our design system so that we weren’t just spending a bunch of time spinning wheels, but he brought this experience on thinking about how do we scale this so that when we bring on more designers, they understand the system and we’re working in a coherent manner. So it’s like, yeah, I mean he had more expertise at that than me and it was really cool to work with someone then who brought that to the table and it was a really fun collaboration. So I think that’s the big word of encouragement here is to recognize that it doesn’t devalue what you bring to the table, but working with a subject matter expert on some of these disciplines is actually really fun. I think when you get used to it. Yeah,  

Rob Walling:
It is. And you can learn from them. When we were acquired, I was stressing to everyone about, oh my gosh, I have to go work for somebody. You have to go work for this company for a bit of time. And Ruben actually asked me, he said, what can you learn? How can you make this the best it can be? What can you learn? And we got in there and it’s like I had been running marketing for Drip, right? Working with Zach, who’s our junior marketing hire. And I was like, yeah, I’m pretty good. Drip’s growing obviously, so I must be good at it. Hey, I’m really hiring. Hey good marketer. Look at me. And we get in there and I’m like, oh, I don’t know shit about this. We figured it out, but I was not fine. I was middle of the road by the time we got in there. 

Just people who knew how to execute and like you said, build systems and just be better at it. So I was a perfectionist with every word, every word that was on that website I had written right? I wrote all the copy up till that point and I did want to let it go. I was just tired of having to, for me to write all the copy when I was trying to run this company. But what I realized was people came in and rewrote it and at first I was like, Ooh, that’s not mine. And then I was like, huh, that’s actually a lot better. So that’s the tough part, but it’s tough when you’re bootstrapping and you’re at 5K MRR. It’s like, can you hire someone who’s way better at you in these things? Maybe not. And that becomes the struggle of I start looking, I do start looking in cheaper locales. 

I say overseas being in the us, but really it could be South America, central America to find someone who is senior and who’s better at me than I am at that thing. And to maybe not give away my zone of genius. I wouldn’t hire someone to host the podcast and be high level strategy for MicroConf and TinySeed to be the face of the brand. You know what I mean? Those things. Those are kind of the things I need to keep doing. So in your SaaS in your company or if you’re a consultant or whatever, you’re listening to you, what are the things that you really need to do without the self-importance of I really need to do everything the best, but really get down to it? Most of us are good at one, maybe two things for you. I would say it’s product. It’s the ability to think of what to build, how to build it, how to elegantly incorporate it in, and then engineering the actual nuts and bolts of writing code and design is a third. I mean your full stack obviously. But to me design is kind of a third discipline, even though you’re very, very good at it. I think you’re actually genius level at the other two and you’re quite good at design. 

So those are things that you tend to hold onto with Cal.  

Derrick Reimer:
And I think just in general, this perfectionism quality that a lot of us have is it can be a really helpful inclination what allows you, drives you forward on performing your best work in certain areas. But I also think the blind spot that comes from that is especially early on, you’re talking about when you don’t have a lot of resources to go hire a world-class, fill in the blank, and you have to try to be a little bit more scrappy with bringing in extra hands. I think there is that phase where you just don’t have the luxury of being able to go find an all-star and then it’s an exercise in figuring out what stuff actually matters. And I think I’m still trying to grow in this area, to be honest. It’s a big struggle for me because I tend to think that a lot of things matter a ton, especially as I am, I’m competing on user experience. 

So all the details have to be on point, but the fact of the matter is you can get by with certain things. Just take for example, like an educational video that you send to a customer that explains how to do something right. My inclination is to want to either not do it or do it at a very, very high degree of execution. And really what matters most is that the customer understands how something works and that knowledge is transferred. And if it’s lacking that extra polish that would come from something that’s from a world class video producer or something, that’s okay in the early days, maybe you want to work to the place where everything you put out is at that atom wa and level of polish, but most of us don’t have just the resources to be able to do that and it’s not going to move the needle in that big of a way. So you need to just convince yourself about what things are really, really important and what stuff you, is it okay to just be good enough on?  

Rob Walling:
That’s exactly right. That is something that I’ve learned throughout my career and it took me a long time. Well, the first one was learning to just not do some things that seemed important that you just don’t do ’em all together and it doesn’t matter. The second thing is when I can phone it in, and that’s not, it’s do it quickly is really what it is. When can I do an unedited loom? This is like, Hey, I’m rob here, blah, blah, blah, and I kind of mess around, watch this on two x because it’s not great and send it to a customer most of the time, probably if it’s a one-off thing, you know what I mean? It’s like you can just crank on these things and then when to really polish it and when does it matter. And differentiating between those three levels is a skill that I think is very helpful to develop. 

We’ve actually answered one of Ollie’s later questions, which was how would you decide what to delegate and what to keep? We’ve kind of talked about that zone of genius. Are there things founders should never delegate? And I don’t say never, but certainly there are certain things that if you love doing a man, you’re really good at it and the business needs it. That’s kind of what you want to keep. Your role will change over time is gives you’re a million, 5 million, 10 million, you got to move more into strategy, blah, blah, blah. I would also say something we haven’t brought in is I have this very simple dichotomy of risk versus certainty. There are areas of your business where there’s just a bunch of, I don’t know, we don’t have marketing, we don’t have leads and I don’t really know how to close sales demos and there’s a bunch of uncertainty or risk there. 

And then there are things like customer support. We get the same 10 questions every day. We have a kb. I know that someone with knowledge of the product can do that. So that’s a certain thing In a lot of instances as your code base matures, not in the first month, but two, three years down the line, there’s a lot of certainty in writing code. Now you may have to spec it out, you may have to say, oh, it’s this feature and we’re going to hit all these. But you have a map in your head of like, I can code this or I can hand it to a developer who’s good and who I know will write high quality code and they can do it. And so that’s how I think about stuff in my businesses is where’s the risk or uncertainty? That’s what the founder should be working on. It is so easy and tantalizing and it’s like a big bowl of ice cream to work on certainty. It makes me feel good. It makes me feel like I’m good stuff. It is entrepreneurial procrastination, unfortunately, if you have any type of money to hire someone, go for the areas of certainty.  

Derrick Reimer:
Yeah, I think you just touched on this, but it sort of Jason Cohen’s joy, skill, need framework, which has been a really helpful framing for me to think about this. And I mean he’s sort of proven to be the master at reinventing his roles as now he’s gotten his companies to much later stages than a lot of us have. So he’s moved out of CEO into CTO and then into kind of a strategist. And so he’s very good at thinking about this and releasing the reins on control when he recognizes that he needs to reorient himself into the ideal zone. And I think a lot of us can’t necessarily be right in the middle of that joy skill, need Venn diagram because again, resource constraints. But I think if you recognize where you are in that, and I think a lot of makers are like joy and skill. 

We are very good at building products and we love doing it, but the business probably needs more marketing. I think that’s the story for maybe 90% of indie hackers and people who are come from the angle of developer founder, and maybe you have the resources to bring in marketing help. Maybe you have to roll up your sleeves and do it yourself, but even just being aware that okay, even if you don’t find it that joyful, joyous to do that work, it needs to be done. So you got to force yourself to do that. And maybe there’s, in the course of wearing many hats, maybe you do also spend some time doing the stuff that you really love. You should maybe, I don’t think you should give it all up. You might find yourself burned out and delegate when you can to bring in help so that you don’t feel like you’re just failing at marketing and not getting anywhere. But I think just being cognizant of the traps of focusing only on the stuff that you enjoy and that you’re skilled at, but not missing that key component of what does the business need.  

Rob Walling:
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And Ali’s, last question is, would you recommend several people across several marketing channels or finding a generalist? The answer is, it depends. Depends on budget really, and it depends on the stage. But here’s the biggest thing. There’s kind of three ways to structure a marketing department in SaaS. It’s the infinity budget plan, which is I have infinity dollars that I’ve raised from gie, they just keep depositing this in my bank account. Derek, it’s great. I would hire a high level marketing strategist slash project manager and then I would hire five independent, I’m sorry, individual contributors. They could be freelance or contracted or they could be W2, it doesn’t matter. But one is just expert copywriter and one is an expert AdWords and one is an expert Facebook and one is an expert. You get the idea. It’s like each marketing channel that just costs a load of money and so almost none of us can do it. 

So when I look at the TinySeed companies that are doing seven figures in a RR, I have this list that I keep this quite a few of ’em. Every single one of them, without exception, the founder has figured out enough about marketing or sales or lead gen driving new customers. They have not outsourced that for the start. Now some of them at a certain point get to 500 a million a year, 2 million. They do, they hire ahead of growth, but they already know the engines. The engines are already in place. I don’t know anyone, maybe there’s an exception here or there. So we can bring up who has just hired that out of like, cool, go find out how to find more customers. It’s much like doing sales demos like the founder. You just have to do it if you’re going to do it in the early days. 

So usually the model is one of the founders says, I’m going to learn marketing or lead gen because the reason I differentiate is marketing I tend to think of as inbound. And then outbound is not marketing that’s outbound. So I’m kind of lead gen. I’m combining two into that term lead gen, but they learn marketing well enough that then they, and they probably start as the ic, the individual contributor. I remember logging into the AdWords console and logging into the Facebook ads console and writing blog posts for seo. Like I did all of that. Am I the best in the world at it? No. Did I do it until we figured out, oh, this kind of works, and then I went and hired freelancers to take over. Yeah, there are some exceptions to this. If you have budget, obviously running ad platforms, LinkedIn, Facebook, AdWords, Instagram, obviously those do have experts that you can hire and are way better than you and they aren’t that expensive. 

So I would consider doing that from the start. But even to test, but almost everything else, it’s usually the founder being that strategist and then hiring ICS first, the founder doing the IC work and then hiring individual contributors to help out with that as you get budget. Because as marketing works, the company grows and as the company grows, you have more revenue and you take that revenue and you should invest that back in marketing. Usually it’s marketing and sales are the first things that you should be doing as you’re growing SaaS company. You have anything to add to that?  

Derrick Reimer:
Yeah, I mean, I think my own story is a little bit of an outlier case in part because I could find, because Corey Haynes was available who’s a very good generalist marketer, founder minded person. So a lot of times people have this type of person on their co-founding team and Corey happened to be available and is a collaborator for me to work with because I was at the time, didn’t have a developer, so I was just building product day and night, but also we were getting it off the ground and trying to do launches and figure out how do we get SEO engines rolling and how do we kind of working through the strategy. So we collaborated together on developing the strategy and it was just helpful to have an extra mind to think about these things. And then he did a lot of the sort of delegation of, okay, we want articles. We’re going to sub these out to a freelancer. And so he was in charge of, or a pool of freelancers, so he was in charge of building the spreadsheet of the keywords and it was all very collaborative between the two of us, but he was just basically in that role of the boots on the ground kind of project managing marketing stuff. And so that worked well for us. I don’t know how many generalist marketers are out there available to do that type of work as a contractor. So at the time I probably  

Rob Walling:
Almost no one.  

Derrick Reimer:
Yeah, yeah. I mean, I probably wouldn’t have been able to hire full-time a marketer. It perhaps would’ve been too expensive at the time. So  

Rob Walling:
You have a luxury of a marketer wants to work with you because of who you are and because of the beautiful products you build and they know that you’re going to execute quickly. The zero to one marketing is what kind we talk about. That’s the founder level marketing, trying to figure it out. And Corey Haynes can do that. Agent GIO can do that. Any founder who succeeds can usually do that. I mean, I can pretty much list all of the successful fast-growing companies within TinySeed or MicroConf, like, oh, the founder has some hand in the marketing or sales. So you’re right, you’re the exception. It doesn’t mean that’s where it’s like, it’s not always a never, but in general, pretty 80, 95, 8% of the time, that’s the pattern that I see. So thanks for those questions, Ali. Our thoughts were helpful. Next question comes from Tiago, his ex Twitter handle is WBE Tiago. 

He says, how do you manage partnerships with other SaaS or products in your industry? What do you look for? What partnering with other SaaS, how do you reach out to them? What are red flags? And I asked him, tell me more what you mean by partnering. And he said, I mean guest posts, integrations, giveaways, joint ventures, that kind of stuff. I wanted you to weigh in on this because Avi, you’ve done a lot, quite a few partnerships and I think some of them have resulted in good results. So I’m curious your thoughts and then obviously I have my own just from my own experience.  

Derrick Reimer:
Yeah, I mean I think just in general, these are a lot trickier in practice than they look. I think oftentimes, so many times I think partnerships are fraught with the dynamic of if someone is much larger than you, do they feel like you’re getting more of the benefit than them or vice versa, what do you both have to bring to the table? So early on in Savvy Cal, there was one particular partnership attempt with a company that was related and sort of made sense for us to explore building an integration at a deeper level than just our baseline integrations. And it ended up being a pretty big waste of time in the end because they felt like they were so much larger and ultimately they were kind of afraid to drive too much traffic to us. That felt out of balance. And so I think there’s going into any kind of partnership, it’s important to have a deep understanding of what’s the vision for how you’re actually better together, why bother doing anything at all? 

Because if there’s not a foundational story that we can all agree on, then these things are going to either quickly or very slowly crop up and kind of taint the whole endeavor. So sometimes it’s getting your product in the hands of their customers helps drive retention or fill in a gap in functionality where they’re losing sales because they can’t provide this thing and your product can fill in that gap. So it’s that question of how do you both win with whatever it is. And it could be as simple as like we’re going to build an integration and email our customers both about that. I mean, those are oftentimes pretty simple, especially if they have an API or you have an API, depending on the direction that the integration needs to go, a lot of times they can be pretty simple and the main benefit is it’s helpful for their customers. 

Maybe you get a back link from their website on their docs and there’s kind of a good little link together. And other times when it’s deeper, I think the big thing is looking for are they actually willing to invest in this or is it just sort of a transactional sort of thing. I’ve had outreach from larger companies that are almost like putting me through kind of a BDR process where they’re like, you can tell they’re reaching out to a lot of companies asking for integrations because they have some person, random person in their partnerships department who just is working the long tail of trying to get their service integrated with a bunch of other people. And those are not super high value. I don’t have any evidence that their customers actually want to use my product. They just are looking for another backlink and another notch on their list of integrations to be able to say we integrate with thousands of tools. So I think it’s trying to make sure, is there an actual case here? Have you actually heard demand from your customers for something like my product and vice versa, can we develop something meaningful here or is it kind of just this transactional, we’re hoping to get a quick win on some traffic.  

Rob Walling:
Yeah, I think that’s a really good way to think about it, to go up one level higher in terms of strategy, I think about integrations and partnerships as kind of the same thing, but an integration involves writing code, so a partnership, let’s just say it’s a JV partnership, joint venture partnership. This is what internet marketers used to do in the early two thousands where it’s like, I have a list. You have a list. Let’s cross promote our course to the other list. It’s free sales, and we can either do a one for one trade of we email without affiliate links, I email my list about yours, you email your list about mine, no affiliate links, or we can do the same thing and do affiliate deals, and that can happen. I did several of those with Hit Tail, which is a long tail SEO keyword tool. You remember Derek? We worked on it.  

Derrick Reimer:
Oh, yes.  

Rob Walling:
And I reached out to Rank Trackers. We did not have rank tracking, and I sent 10 emails and I got eight responses of like, absolutely, let’s do this. And what assets did I have? Well, we had however many thousand, I’m trying to even remember what the numbers were, but it was like a thousand customers and a marketing list of 10 or 15,000 maybe at the time. No, it was bigger than that actually, because maybe it was 20,000. And so I would reach out and say, let’s just do one for one emails. Just say, I want to use your rank tracker and then I want to recommend it and use Tail and recommend it, and that’s it. And we did that. Was it a massive flywheel that completely grew the business? No. But was it something that absolutely worked every time we did it? Yes, it would drive dozens of new customers. 

It would drive hundreds if not a thousand or 2000 of MRR if the list was big enough. So that’s a joint venture where you don’t have to write any code. You’re literally writing marketing copy. And then in integration, to your point, I see there’s integrations that you do for your customers. You integrate with Stripe because everyone wants you to integrate with Stripe. Stripe’s not going to promote you, PayPal’s not going to promote you. They may not even list you in their lab market, but you do it for your customers. Then there’s integrations you do for integration marketing, which is, remember with Drip, we integrated with Send, and we had 35 integrations, so I can’t remember them, but they were lesser known, even Gumroad at the time. We probably integrated with them in 2013 or 14. They were around, but they were not as known as they’re today. 

We integrated with them because our customers were asking, they were like, oh, I use Sendell, I use Gumroad. But also I approached them and I said, I want to integrate with you. We’re getting requests from customers. Here’s a screenshot of an email. Here’s things we can offer. We can publish a blog post. We can email our email list of, it’s probably by that time, 20, 25,000. We can post a tweet, we can write a knowledge based article. We can mention your company and app. We can host a webinar if you want. And so I would offer all that up and say, what can you reciprocate with? And whatever they could, we would just one for one those things. So if they could only do a blog post in a tweet, we did a blog post in a tweet, and if they said, you know what? This isn’t a fit. We can’t do it. I would seriously debate whether to do it to the integration if I was doing it more for marketing purposes. By the way, the whole list I just read is from the SaaS Playbook, page 97. If you want to know all the things that we used to do, I’ll tell you, the SaaS Playbook’s a great reference for me so that I remember these. You know what I mean? 

I don’t remember that list off the top of my head. So that’s how I think about it. I mean, you and I are definitely on the same page in terms of be cautious with just building things, thinking that it’s going to be promoted. I would get a commitment, I’ll say a verbal commit. It was in an email. This is what we’re going to do. What can you do? This is what we’re going to do back. So I had something in writing in case a product manager or a marketing manager switch things up later. I think that’s it. Oh, I guess Tiago asked how do you reach out to them? I mean, with Hit Tail, I did a bunch of cold email with Drip. It was a lot of warm network stuff as Drip became a brand, people knew it and it was easy to reach out and say, Hey, I’m the co-founder of Drip, and we want to do this. And what’s the other thing, Derek, going to events, going to MicroConf. There are a lot of people there at a MicroConf business software, even a bigger SaaS event. This is why I say build your network, not your audience. That network is so much more valuable than 10,000 people on X Twitter following you having five people that you can integrate with or co-promote or get in front of their audience is worth five times, 10 times the value of a social media following.  

Derrick Reimer:
Yeah, I think that’s the majority of, well, we have our integrations with the big players, but the smaller players that we integrate with, a lot of that is came from some degree of warm connection to the point where I could reach out, ping them and DM them or email them and make the case like you talked about, we’re hearing a lot of customers mention wanting to integrate our two products together. Here’s what we’re seeing. Are you guys seeing anything similar? And just start the discussion on have you heard anything? Oh, that’s interesting. You want to do a test? We get the ball rolling on conversation for good reason and not just be cold outreach  

Rob Walling:
To your point. And that’s something that didn’t use to happen. So if it’s happening to you now where you’re like, oh boy, I’m in a funnel, this is because marketers ruin everything. That’s exactly why. Our last question for the day was a question that was posted on a YouTube video from YouTube username and Derek Ddu, Plessy two 15, and I don’t remember what video was on, but the question is I would love a follow up to this episode on how you prioritize your Q3 or any quarter. So obviously building a SaaS versus what I do these days is different, but the question still applies. So I’m going to kick it over to you first. Derek Kremer, how do you plan for your quarter of Savvy Cal?  

Derrick Reimer:
Oh, yeah. There’s no notion of quarterly planning in my flow, and I think that’s probably the case for a lot. Same for me, for a lot of startups,  

Rob Walling:
Part of our biggest strength is that we are so nimble and can move so quickly, and frankly, 90 days in the life of a startup is like a year in the life of a big company. So trying to think of now, I don’t know, I’m going to be responding to customer inquiries and things as the market shifting. How can I move really fast? And so planning a quarter ahead would be, that’s just anathema to what you’re doing until you’re at, I don’t know, I don’t want 5 million, 10 million. When you have a bigger team, that’s when planning needs to happen. You got to get a bunch of departments on board and we’re going to launch this feature. So we need sales to learn about the feature, and we need support to know how to support the feature. We need success to know how to success the feature, and we need marketing to know how to market the feature. You know what I mean? That’s when you need quarterly planning. You can’t just come with a feature and say, Hey, we’re pushing this live tomorrow. That starts breaking things. So there’s a certain point at 2030 employees maybe where you need that. But today, so how do you do it? How far ahead do you plan?  

Derrick Reimer:
, I mean we generally have a sense for what the next four to six weeks looks like. I’m not a religious follower of Shape Up. I think that’s a pretty popular methodology from the Basecamp folks that people have latched onto as sort of a way to budget your time as a team and say, what are we going to? Let’s fix the time budget and then get done whatever we can on what we set out to do and flex the scope as needed. And I think that’s kind of generally, folks have coalesced around that as a good way to shape your work. And I think it scales down to pretty early stage as well. You might want to keep the cycle a little shorter. Six weeks feels long for super early stage, but when you get to a place of product maturity where you’re really just kind of incrementally improving it, I’ve seen that be a pretty helpful time range. And yeah, the goal there is to try to say, we’re going to build this thing and we’re going to build whatever version of it we can get done within our time constraints so that you don’t let projects just run away on you.  

Rob Walling:
Yeah, it depends on the stage and the super early stage. You and I would plan a day or two ahead. I mean, there were some features that took a week or whatever, and it’s like, all right, we’re going to plan for that. But we would shift pretty frequently when it was two or three of us because we could, and then it started being like, well, let’s do one to two weeks out. And one to two weeks was fairly locked in, although we would sometimes pivot of like, oh my gosh, there’s a huge opportunity here. But then what happens is, in my head, I kind of knew what two to four, two to six weeks was, but it was fuzzier. It was like, well, we do when we get there, but I kind of have an idea. And then as your code base matures, as your marketing matures, just your whole company matures. 

You hit 10, 20, 30 K, maybe 50 KMRR, that timeframe just slipped, not slips, but it moves out a bit. Like you’re saying you’re now at about four to six weeks of being more in focus, and I bet, but I bet still if I were to say, all right, so what are you going to do from six to 12 weeks? You have a fuzzy idea. You have a general idea. You’re not going to lock in and be like, oh, it’s this and that, but you kind of know, but once you get there, you’re then going to plan that far out.  

Derrick Reimer:
I wonder, have you seen, because I know the notion of quarters is very normative in sales in the realm of sales, sales organizations often think in terms of quarters, probably even more so than product development teams. But I wonder, do you have a sense of when does that normally kick in? Is it 20 to 30 team size ish, or when do sales teams need to start running on quarters basically?  

Rob Walling:
I don’t actually know. So sales team specifically, I don’t know, and obviously big Salesforce and these huge companies that have this Slack and all that, have these big sales teams run like that? Even if you were to ask me why do they do that? I have a guess. Oh, you have a deadline and your salespeople motivated by this and that, and maybe the commission’s paid quarterly, but I don’t actually know, so I’d be curious to get someone on the podcast, to be honest, a Jen Abel or a Matt Ock or someone else who really knows sales and said, why is that? Is it just because that’s how you’ve always done it? Is it, I mean, here’s something man, A friend of mine works at Intel and has, we both graduated college at the same time and he got a job and has worked at the same company the whole time, and I’m on my 23rd job, not literally, but close. Anyways, from the time he started, he would say, yeah, we’re doing our quarterly blah in the engineering department. They’re designing chips that are fabricated. You imagine the pipeline of that, the waterfall, this nature of that where it’s like 

You have to lock it in, you have to freeze this, and you put it’s in silicon and then it’s blah, blah, blah. So they did quarterly stuff and I was kind of like, why do you do that? And he’s like, well, that’s just how the company operates. And it does to me feel like an older school thing coming from that of Intel. But I also think you have to get people on a cadence of some kind, otherwise you’re just flailing around. Like we said, if you have six, seven departments and each department is five to 50 to a hundred people, obviously Intel’s bigger than that, but in a startup you got to have some type of cadence to get everybody on. This is the group of things that we’re going to do in each department during this quarter.  

Derrick Reimer:
I would venture to guess that, again, speaking a little bit from ignorance here, but that product teams, even when you’re 10, 20, $50 million company, I’m not convinced that a product development team should ever lock themselves into something that rigid, no, maybe sales. Maybe sales, but depending on when you bring in the adult supervision and people who know what they’re doing from large company sales orgs, maybe that’s the right way. But I would be very leery about ever of trying to apply that to a product development cycle.  

Rob Walling:
And I totally agree with that. And those are the companies where we eat their lunch as right, those are the companies. When you start moving my quarter by half a year on product development, no, good night. That’s when we’re going to demolish. You remember it? Was it Infusionsoft? They’re now named Keap. I thought they did one release a year and we were  

Derrick Reimer:
Pushing code, some kind of version thing, applied SaaS, which is like why  

Rob Walling:
Old school? And it was an old school mentality, and that’s not how you win in the market today, given how competitive it is. Awesome, man. Well, thanks so much again for joining me. Folks, want to follow you on X Twitter? You are Derek Reimer, and if they want to use the best scheduling link on the internet savvy cal.com. There it is. Thanks again, man. Thanks. Thanks again to Derek Rimer for joining me on the show. He’ll be back again in another month or two. If you enjoyed this episode, it’d be amazing to get a five star review in Apple podcasts or Google whatever they’re calling it these days. A thumbs up on YouTube or a like question mark plus thumbs up, something in Spotify. I don’t know how Spotify does if you’re listening to Spotify, look around to see if there’s a heart, but it’s great to have you here this week and every week, I’m Rob Walling signing off from episode 731. Well, hello, listener. You’ve stumbled upon our secret track, if you remember the track, endless nameless from Nirvana’s. Nevermind. That’s what you’re about to hear, except that was just a metaphor. I hope you picked up on that. Mr. Derek Rimer, I have questions for you. Oh boy. 

These are questions that I asked chat GPT to generate for me. My prompt was what are five intermediate level questions to evaluate a software developer’s understanding of Ruby on Rails? The first question, just so everybody knows, Derek has no idea what these questions are coming, and to be honest, I’m a little concerned. The answers might not be right. I don’t know. GBT give me questions and answers, so we’ll see. I’ll compare what you say to chat. Alright. First is, what are concerns in Rails and how do you use them to refactor an organized code?  

Derrick Reimer:
Okay, a concern in Rails, and this is funny too because my Rails knowledge is about five years outdated, so well boy. But I think a concern is basically a mix in, it’s a way to abstract some logic into a separate, my terminology is all messed up. I’ve been in functional land. It’s like a separate, it’s not a class. Is it a module? Do you have modules in Ruby? I think it’s a module. Great.  

Rob Walling:
I love this. Just so everyone knows, Derek wrote tens of thousands of lines of Ruby on Rails code for Drip, the entire big monolith written in Rails. So you had a decade of rail, you had a lot of years in Rails, but it’s funny how quick, like you said, it’s five years old and you’ve replaced a bunch of that knowledge with, is it Elixir Phoenix? Is that  

Derrick Reimer:
Basically, yeah, so it’s more like functional paradigms. I haven’t written object oriented code in a while. It was funny, I was doing a podcast episode with Ben Ornstein recently who was also a Ruby Rails expert back in the day. And I was trying to explain how something would work in Ruby Land, but I was using all the wrong names for the active record accessories. I was just so used to the naming conventions from Elixir,  

Rob Walling:
You recoded it. So in the early days when I was becoming a professional developer, meaning getting paid for it, I was a full-time employee of a dev shop. And so every project was a different language, and so it was like PHP, it was original active server pages before.net. There was ColdFusion. I learned Pearl this dates, it was 20, 24 years ago. But I rolled through ’em all and I remember being like, all right, I’m not great at any of these, but at least I had a big swath of it. Then at a certain point I went where the money was, which is.net, and I dove deep, deep, deep into net, and then I was 5, 6, 7 years into that, and the pay rates were great, but when I tried to then come back to anything to PHPI was like, I just can’t. The paradigms are so different. You have to unlearn it, and that’s where it’s tough. Totally.  

Speaker 3:
Yep.  

Rob Walling:
It’s good that I come prepared then, because I also asked no joke, Chad, GBT, what are five intermediate level elixir Phoenix questions? I did this on purpose, so let’s see if these are easier. We’ll just skip the rails one. We don’t have to do five. Let’s do a couple. First is  

Derrick Reimer:
Wait on the concerns. Was I right? What did Chad GT say?  

Rob Walling:
Actually didn’t say, it just said, this question tests their knowledge of code organization and how to keep their models and controllers clean and maintainable.  

Speaker 3:
Okay.  

Rob Walling:
So maybe someone can tweet us XX, Twitter us at Derek Reimer at Rob Walling and let us know, Hey, was Derek right? I’m guessing you’re right. That’s going to be my, alright. How does the Phoenix framework handle real-time communication? Explain the role of channels and presence in Phoenix?  

Derrick Reimer:
Ooh, yes. So this is actually one of the cool benefits of Elixir because it’s built on Erling, which has all of this very realtime capabilities built into it because it was built by Ericsson back in the day for running text message infrastructure. So think of all of these gazillions of processes and need to be running, and they’re all in parallel and they don’t necessarily need to affect each other. So it’s just designed inherently with that in mind of many, many processes that shouldn’t crash each other. And this works really well for web socket’s use cases where you have a bunch of people potentially on your site and you want to keep an open channel via web sockets to be able to stream data back and forth over a channel. So channels are the mechanism that Phoenix has for basically opening web socket connections and then sending data up and down that pipe instead of going through old school HTP requests, which are a little bit slower. And then the presence feature. This is actually a tricky computer science problem to solve when you’re active on a browser window and you want to show that that person is actually present there. Keeping that state synchronized with the server is kind of tricky and you just get that for free from sockets. So yeah.  

Rob Walling:
Yeah, I think that’s correct because once again, I said, here’s the problem. I asked Chad JPT for questions that I liked for an interview. It didn’t give me the answer. It just says what each question will test. So yes, correct. Derek ding,  

Derrick Reimer:
Am I hired?  

Rob Walling:
You’re hired. These are the questions. We never ask these questions. Remember in interviews or like, no. Do you have a take home test or we can look at some of your code,  

Derrick Reimer:
Right? Yeah, yeah. Explaining how a web request works.  

Rob Walling:
Yes, exactly. What is H-T-T-P-S? Alright, last one. What are gen servers in Elixir, GEN servers in Elixir and how would you use them in a Phoenix application?  

Derrick Reimer:
Yes. So gen servers, this is kind of hearkens back to that fundamental architecture I was just talking about, but basically it’s a way to manage state in an elixir application. And it’s a little bit quirky. This is kind of more in the advanced principles of Elixir that a lot of new elixir developers don’t even necessarily have to learn about in order to get started with it. But if you start peeling back the layers on how Phoenix works and then how to do certain tricky things that involve, you have this centralized state and you need to make calls to it or just either fetch, fetch data out of that state or just make a mutation call or something. And it’s like the shared state that’s shared across all the processes that might be running in an elixir application. So we use these as an example, like this cool little subsystem where we have to throttle how many requests we make to the Microsoft API. Like they don’t allow more than five simultaneous requests at a time to any given API token. And this is actually a pretty difficult problem to solve in a distributed system, but using a gen server, we can basically spin up a pool of threads, sort and these threads service requests. And if you get 10 coming in at the same time, they kind of line up in the pool and you can control concurrency. So that’s just one example of how you can use gen servers to help out.  

Rob Walling:
I love that you’re giving me really serious complete answers. It’s just that I’m like, wow, do you really know your, of course you do. And you’re taking this serious, it’s great. It’s great. So anyone listening, I’m trying to get hired. Here you are. I really need a gig, man. Alright, last question In Dungeons and Dragons fifth edition, what is Hunter’s Mark? So just so for context, Derek has played a, well, it’s a seventh level ranger now named Ford, Ford Ranger, and you have played this ranger for I believe, five years now. I think the first game was in late 2019 that we played five years Hunter’s. Mark is a critical key component of a ranger. So Derek, what does hunter’s mark do?  

Derrick Reimer:
Oh boy. Okay. I think it’s a spell right and it allows me to mark an opponent and when I do that, I gain some sort of advantage on attacks. I don’t remember what that advantage is.  

Rob Walling:
You gain extra damage.  

Derrick Reimer:
Extra damage.  

Rob Walling:
There we go. Yep. So it’s not technically advantage on attack. That would mean like 2D 20, you take the high one, but once you hit, you get an extra D six.  

Derrick Reimer:
Lowercase a advantage.  

Rob Walling:
Exactly. I’ll give you, yeah, credit on that.  

Derrick Reimer:
Okay. Alright,  

Rob Walling:
Well thank you for playing the startups For, the Rest Of Us pop quiz.  

Derrick Reimer:
Yes. I’ll just be waiting to hear from HR about that.  

Rob Walling:
Yep. We’ll be back in touch. Got that job. Okay, cool. Thanks. Let you know. Awesome.

Rob Walling:
Welcome back to another episode of Startups For, the Rest, Of Us. I’m your host, Rob Walling, and in this episode I talk through lessons that I’ve learned investing in more than 170 companies, specifically through my startup accelerator TinySeed. And if you’re a B2B SaaS founder who’s looking for the right amount of money, mentorship, community advice for me and our amazing mentors, you can head to TinySeed dot com slash apply. Applications are open right now for about the next two weeks, and I’d love to see you apply. Now between TinySeed and mine and Sherry’s personal investments, we are over 190 companies, but I wanted to limit the percentages, the numbers, the takeaways to only those where TinySeed has written a check in the past. I guess the first check was written about five years ago, and so that gives us a pretty tight timeframe and a more cohesive decision-making approach because we’ve been much more deliberate about the types of businesses that we fund. 

So today’s episode is stemmed from a question I got in a private slack group by man where someone said, you’re basically five years, we’re six years from the announcement of TinySeed almost, but we are just over five years from the first check being written. And he asked, are there any patterns or takeaways that you’re noticing across these 170 plus companies? And that’s what I’m going to share today. Now, I want to make a note. I have almost two dozen of these takeaways and that’s too long for a podcast episode. It would run well over an hour. So what I did is I split off six of them and I put them in a YouTube video on the microcom channel, and it has a name similar to this. It probably just came out a couple days ago, and it’s six things that I’ve learned investing in more than 170 companies over five years, something like that. So if you head to microcomp.com/youtube, it should be one of the last couple videos published, or you can look in the show notes of this podcast and click through directly to that video. If you want to get the other takeaways that I didn’t include in this podcast. 

I am going to list these in no particular order. They just came to me in this order as I was trying to think of what are the patterns that we’ve seen. First one is the survivability of B2B SaaS and maybe specifically within our portfolio because obviously we are pretty picky, pretty cosy about the companies we let in, but broader than that B2B SaaS in general, once you get a little bit of traction, it doesn’t fail very often. So more than 170 investments, approximately 2% of those have been written off, have shut down, not sold, and basically moved on to their next act. So very, very small, what I’d call a failure rate, much, much smaller than you would see in a traditional more risky venture fund. Now, I want to couch this. It’s still early. We funded, I don’t know, approximately 45 companies in the past 12 months. 

And so obviously the failure rate of those would be much lower because they haven’t had time to fail. So I don’t want to act like for eternity for the next 10 20 years, there’s going to be a 2% failure rate, but we did start writing checks five years ago, and even among those companies, a failure rate is still extremely low. The other number that I found interesting, and I just confirmed these in our as of this morning, is that 4% of TinySeed companies have exited, meaning sold for enough cash that TinySeed at least got our money back. And in some cases, as you’ve heard with Iran GRE’s exit on this podcast, we received many, many times our money back, but 4% have exited, 2% have been written off. So there’s still a lot of companies in play, and as I said before, it’s still early. 

I mean, we are in the first inning in terms of B2B SaaS taking five years when a traditional startup might take two years because the long slow SaaS ramp of death just takes a long time for things to unfold. Now, my second takeaway is just how valuable SaaS is. You’ve heard me say this on this show where I talk about if you’re over say 2 million in annual recurring revenue and you’re still growing at 40, 50% a year, whatever it is, you can sell at a four to seven x multiple. And so this is all loose numbers. Please don’t I get quoted on Twitter saying this stuff, but I’m just trying to give you a general idea, but let’s say a five x multiple. So if I add 1000 MRR to my company this month, that is 12 KARR multiply that times a five x multiple if I were to sell it, and I’m adding $60,000 in theory to my net worth every single month that I had one K of MRR. 

So now think about adding 5K of MRR, which many, many tiny C companies are doing 5K times 12 is 60 times five is $300,000 to the value of that company. So I’ve been talking about how valuable SaaS is for many, many years. There’s a reason that I began focusing on SaaS, what 12 was it? 12, 13 years ago? And part of it’s the recurring revenue, part of it’s the cheat codes, the net negative churn, but a big part of it is it’s just really, really valuable and that value can be seen in the profits you take out or it can be seen in the exits. So in our coined this term that I really like, it’s called the TinySeed millionaire rate. And what it is is of all the companies that are no longer in operation, so this includes those that have sold and those that have been written off that have shut down of all of those. 

So I told you before, it’s 4% exits, 2% written off. So 6% of those companies, 43% of the founders are now millionaires. Let that sink in for a minute. I’m not saying 43% of the exited companies made the founders millionaires. I’m saying 43% of all companies that are no longer autonomously operating, meaning they’ve either sold or they’ve shut down, 43% of those founders are now millionaires. Now, that doesn’t mean TinySeed one in all of those exits because imagine if we invest at for round numbers, let’s say TinySeed invest at a million dollar valuation or 1.2, whatever it is, and someone sells their company for $2 million and they’re a single founder, they are now a millionaire and TinySeed received whatever it is, not quite two x back on our money. That’s not a home run for us as an investment fund investing in bootstrapped SaaS, we do have to return a lot more than two X to our investors or a bit more than two x. 

And given that some companies will fail, we obviously need higher returns, but that doesn’t discount the fact that the TinySeed millionaire rate is 43%. If you’ve known me for any length of time, you know me as someone who is truly out to help raise the tide, help raise all boats, obviously with TinySeed, with MicroConf, it’s a for-profit entity. Everything I do makes money, but I’m genuinely here to help people and it brings me no end to joy to know that that many individuals join TinySeed received are mentorship, our advice, our investment, and are now millionaires and they can move on to their next act. I’m sure someone in the audit is saying, oh, a million bucks isn’t what it used to. And it’s like, I get it. They can’t live for the rest of their life on that. But I would say that if this is your first startup or if you don’t already have a million dollars in your bank account, that a million dollars is absolutely life changing money. 

It’s not never have to work again, money, but it does change your life. It changes the way that you can think about the financial safety of yourself and your family. And every time I think about this number, I smile ear to ear, I’m just so happy the TinySeed is having this impact. People ask me, why do you still do what you do? You could write off into the sunset or you could just write books or you could just record podcasts. This is why, this is exactly why I still record 52 episodes of this a year, 26 YouTube videos, why I’m kind of on track to ship a book every 18 to 24 months because I love doing things that have an impact on people. And to me, while the end goal of everything is not wealth, it’s not all about money. This is changing people’s lives and I’m here for it. 

The third learning is something I mentioned on this podcast. It was a prediction for this year, and it’s that vertical and orthogonal SaaS appear to have fewer headwinds than horizontal SaaS. You know what horizontal is? It’s like competing against MailChimp where it’s every SMB, every business in the entire country can use it. Versus vertical is where you build MailChimp for realtors, for example, and orthogonal is if you were to build a piece of software that focuses on a specific role or title at a company. So applicant tracking systems, for example, target HR directors, so that’s orthogonal, vertical and have their own because they’re niche, right? The idea is that when we think of niche, we think of vertical only. And so I’ve started using this term orthogonal to describe this other way to niche in to slice it. And what we’re seeing is in general, horizontal companies are competing with big venture funded incumbents, really successful folks where there’s a lot of money in the space and it’s hard to differentiate, and you don’t really know who your ideal customer profile is. 

You kind of have an idea, but you don’t know exactly where to find them. There’s no in-person event you can afford to go to. There’s no ad targeting say on Facebook or Instagram where you’re targeting by demographics and psychographics that will work for horizontal. I shouldn’t say there isn’t any, but it’s very, very hard to do. Versus if you know exactly who your customer is, whether it’s this type of business or this role at a company, it is easier to do cold outreach and ads and just all the marketing approaches become easier. And you don’t have to be the best marketer in the world, you just have to be the best marketer in your niche. And that’s the difference that we see. And so I’m not going to go through exact numbers here. Obviously we don’t give out our performance numbers in public, but in general, the trend is that we do see vertical and orthogonal SaaS companies not only growing faster, they tend to have lower churn. 

Honestly, if they’re doing well in these spaces, there are net negative churn and it’s still early, but it does seem like the exit multiples are higher because there is more appetite from acquirers, from strategics and private equity to go after these niche plays, presumably because they also know their numbers, they know how hard it is to market, and they know what negative churn can do for a business. And so with all that in mind, the metrics are better, blah, blah, blah. So it’s still early. And here’s the thing. I know someone on the internet is going to come and post, but that’s not true across all 10,000 SaaS companies. Look, my one counter example is going to try to disprove up. I’m not trying to state a physical law like gravity in this podcast. What I’m doing is I’m looking at trends across things that we are seeing. These are not statements of fact. I’m not saying that every horizontal product TinySeed has is not growing, is nothing like that. It is trends, it’s numbers, it’s bell curves. So yes, you can do your post and say, I’m a horizontal, and look, I have net negative turn. Great. I ran a relatively horizontal play called Drip, and that had net negative turn too. So that was a great business. So I’m not saying don’t start horizontal either. I’m just telling you vertical and orthogonal. There’s some real advantages to doing that. 

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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. Takeaway number four is we’ve done some, it’s really back of the napkin surveys, show of hands where I’ve said, okay, the original thesis of TinySeed was some people will want to grow quickly, be ambitious and sell for some number. They have in mind 10, 15, 20 million or more as we’ve seen, versus run a company for years, decades and take out profits. What we didn’t know is what the breakdown would be. Is it 50 50 to more people want to take up profits? With my show of hands surveys that I’ve done in several TinySeed Zooms, it appears that it’s about 15%, maybe 20 that want to grow a company for the longterm and take out profits. 

So it is the, call it the super majority that do want to have that big exit. And I think there are reasons for this, right? We are choosing for more ambitious founders. Like if you want to be a lifestyle bootstrapper and truly run a 10, 20, $30,000 a month company and pull it all out, that’s great, but the numbers don’t work for TinySeed to invest in you. And so I do think a much bigger chunk of those folks, whether you call, I call ’em lifestyle, you could call ’em indie hackers, although I think that is actually a different definition, but you get the idea those folks really do want a lifestyle business, and that’s great. I’ve had some of those, but the idea of joining TinySeed and taking funding and then wanting to do that is obviously a super minority of folks. I do think there’s some selection bias in that for sure. 

And I also think that when people hear me do this analysis where I went through the whole one K goes to 12 KARR times five is 60 grand, and someone puts a check in front of you that you’re like, I don’t really want to sell. And they’re like, cool, here’s your relatively early stage business and here’s $3 million. Suddenly things really shift. Things really shift. I remember the first time I saw a seven figure number written down in an email for a potential acquirer to acquire one of my companies, and I was like, this is it. If I say yes to this, I am set for a very, very long time, and this will be absolutely life changing. I remember almost being in a weird, it’s not euphoric state, but it’s hair stands up on the back of your neck and kind of lose time and even kind of can hear ringing in your ear. 

It was that. I was like, whoa. I was so shocked how in theory I had been thinking, oh yeah, if we sell this company someday, of course it’ll sell for a lot. But the moment that I saw that number, it changed everything. I was like, that’s real. That could really be cash in my bank account. And I think that as folks think about that, especially if you are either a first time founder or a founder who’s never had a big exit who has $50,000 in their bank account and a couple hundred grand a retirement account, and you realize that, yeah, maybe I could see this for the long term. Maybe I could grow this company for 10 years, but if I sell now, I’m set for life and I can work on whatever I want forever. The calculus really changes. So whatever way you choose, if you’re listening to this, maybe you’re thinking about, I want to be able to retire for three to six months, as most entrepreneurs do before they get back in the game, or you want to run it for the longterm, that’s okay. 

I’m just calling out some patterns that I’m seeing with our companies. The fifth takeaway is I looked at only our seven and eight figure a RR companies. So if companies doing millions or north of 10 million in annual recurring revenue, and I found that the founder count for these types of companies are very close to being in line with all the founders across the ecosystem from the state of independent SaaS reports. So in this example, 53% of seven and eight figure TinySeed companies are single founders, 33% are two founders, 14% have three or more founders. And just to compare again, the successful TinySeed companies, 53% are single founders and in the broader state of independence, SaaS, MicroConf, startups, the rest of us ecosystem, 51% are solar founders. So 53 versus 51 with two founders, it’s 33 versus 34, and with three or more founders, it’s 14 versus about 15 and a half. 

So the route, why do I bring this up then? Well, I don’t think founder count, at least in this analysis, has that much of a difference on success. I know that growth numbers in the state of independent SaaS show that for some reason there’s an anomaly with three founder companies. I’m still curious to figure out why that is, but I find it fun to often compare to the broader ecosystem with this much smaller and tighter dataset that we have. My sixth learning, really it’s just a thing to share, is that we have had to turn down many deals where we have made offers or we’re about to make offers, but their cap tables were ruined. So an example of this is founder left and took their equity and whether they own a third or half the company, they didn’t have vesting in place. And now the company is kind of unfundable. 

If you come to us and we’re typically the first money into a company and the founders own less than 70%, that’s not a good sign. And sometimes we are the second money in. So there are exceptions to that, but certainly you want the founders to own 80%, 70 to 80% and up. And so we’ve seen companies where again, there’s one or two founders left and they own like 50% of the equity and they can’t raise funding in the future. They’re basically working to put money in someone else’s pocket. It’s just a really bad scene. The other thing we’ve seen is that there are some really sharky investors out there that give extremely low valuations, or they have these exploding terms where if you raise before paying them back, then suddenly they own three times the equity that their original document said. And these investment terms can make the company uninvestible unfortunate, but we’ve especially seen it in Europe where an angel will invest at, I dunno, I’m trying to think of an example. 

There was $50,000 check for 25% of the company, so they invested a $200,000 valuation and that it’s just rough. So now you have this investor who’s not doing anything, not providing a value add, and it’s on the cusp for us of like, Ooh, would we be willing to do that? But realistically, I’m just giving you examples of ways that it’s easy to torture cap table. Be careful. We are less picky, I would say, than bigger venture funds if they see that, they just walk away. So with your ownership percentages, which is what I’m referring to with cap table, you just want to be careful with that. I’ve been shocked at the number that we have seen, and it’s common enough that we ask for the cap table after the first round. If we do a verbal interview and then you go to the second round, we just say, give us a spreadsheet with your cap table. 

And probably half the cases, I have a question about it, who is this person? What did they contribute? If someone owns 10%, 12% of your company, I’m always like, how did this happen? It also shows a judgment thing. If someone’s like, oh, they helped us a few years back and they did some design work and gave us some advice, and so they got 12% of your company. Like that to me shows a questionable judgment is maybe a strong, maybe a lack of knowledge of the space of how things work, but it’s at least something that we have to dig into to be sure that you don’t make that mistake in the future. A next thing that we’ve seen is subsequent fundraising. So when you join TinySeed, you do not commit to raising additional funds. You just keep the option to do so if, if it makes sense for you. 

And within the first few years, it was about a third of our companies went on to raise additional funding after the 2022 crash where funding valuations hit 10 year lows and money is just not as easily accessible. I think it’s probably closer to about a quarter, like 25% of TinySeed companies, and this is not, you have to discount the prior year that we’ve invested. Like the most recent year, probably zero to a handful of those companies have even thought about fundraising because they still have the TinySeed money, they’re in the batch year. But we look at anybody who’s a year or 18 months prior to now, what percentage and ballpark. I would say it’s around that one In four mark, we had a company apply with six co-founders. That was an interesting one. They had a lot of products were very scattered and we weren’t able to fund them. 

Can you imagine? I mean, none of them owned more than 16% of the company and making decisions would be very, very challenging. So that was a red flag of frankly, decision making. When we got into that, then we saw a company apply with zero founders. There was actually one founder of course working on it, but they owned 25% of this early stage company. So I am kind of like, are they really a founder when they are basically working for someone else? To me, that feels like a nice equity grant to an employee. He called himself a founder, but in essence, this is one of those cap tables that we could not fund because a founder working for 25% equity, it just doesn’t make sense. Alright, to wrap things up, the most common topics that I advise on the people pull me into one-on-one conversations during my office hours are the following four things. 

Number one, raising prices or fixing, changing, correcting pricing. It’s not always about raising sometimes the value metrics off. Sometimes they just don’t feel right about the pricing, so we talk through it. The second is, I’m at a plateau or I’m about to hit a plateau. How do I break through it? And those are the conversations that have fueled this mythical doc that I’ve put together, which is just a bulleted list of all the plateau reasons that I know of with B2B SaaS that someday I’ll figure out a way to package it up in a way that’s actually helpful. But plateaus are a common thing. Someone wrote into this podcast I believe, and said, I heard the most bootstrap SaaS companies plateau at 20 or 30 K. Why is that? And the answer is, that’s not true. It’s not that most do. I see SaaS companies plateauing early because they don’t have product-market fit. 

I see them plateauing at 20 or 30 K because they only have one marketing approach and the top of funnel is her churn is too high, and I see them plateauing it a million a RR because their churn is too high or they’ve tapped out the market or there’s all these reasons and then they can plateau at 3 million because competitors, blah, blah, blah. So lots of different reasons for plateauing and it is a very common topic of conversation. The third one unfortunately, is co-founder disputes where one co-founder is living, wants to leave, thinks the other should leave, is asking for advice about a buyout or should they just walk away? Should they give some equity back? It gets really complicated. It is like a divorce because folks have worked together, have been friends, have built and started something that is valuable, sometimes not valuable enough. 

If it was worth $20 million, then maybe you sell it and split the money. But if it’s worth half a million or a million and you’ve spent years working on it, do you really want to liquidate that to the what’s going to be the lowest bidder because you’re not going to get a great price for it and distribute a few hundred thousand dollars to each person that they get taxed on. It is tough. So I don’t mediate co-founder disputes per se. I’m not a mediator. We do have folks that we recommend our founders talk to if they need that, but I definitely am someone that people talk to about advice. Hey, here’s going on. How should I think about it? What are my options? That’s usually the big one is what are my or our options in this case? And of course, now I have a whole laundry list of options when these things come up. 

And the fourth one that folks get my advice on is raising funding or selling a company. And usually it’s not like, how do I raise funding? How should I think about this? Should I raise funding or sell the company? There are questions then about what are next steps and how should I think about it? What are typical valuations? All of that. But as you can see, I get brought in at big strategic points. Now, I also get brought in, I got brought in for some great just nitpicky questions the other day of per seat licensing advice on how to optimize a marketing channel, what marketing, let’s brainstorm marketing channels to go after next. But if I’m grouping them, it really is those four that I mentioned. As a reminder, I have six more learnings that I did not mention in this episode that I mentioned over on the YouTube channel. 

You can click the link in the show notes or go to MicroConf dot com slash YouTube and look for a video of approximately the same title as this episode. And another reminder, if you are a SaaS founder and you want the right amount of funding advice, mentorship community TinySeed dot com slash apply. Applications are open now, and if you are an accredited investor and you’re interested in investing in companies like this, the tiny C millionaire rate is 43% on companies no longer in operation. So obviously we’re having some success. Head over to tiny c.com/invest can fill out a form. There it goes, straight to my good friend, Einar Vollset, whom you’ve heard on this podcast before. Thanks so much for joining me for this week’s episode. It’s great to have you this week and every week. This is Rob Walling signing off from episode 729.

Rob Walling:
It’s Startup To The Rest Of Us. I’m Rob Walling, and this week I talk to Eran Galperin, the founder of Gymdesk, about how he bootstrapped and frankly mostly bootstrapped Gymdesk to a more than $32.5 million exit. It really is an incredible story of Eran launching this product on the side and working for years, nights, and weekends until it clicked. And this is a good example of if he had launched it and expected it to just work in a month or three months and was launching 10 things, Gymdesk would not be where it is today. It was the sheer focus and the relentless execution and showing up night after night, weekend after weekend until he could quit his day job that got Gymdesk to such an incredible life-changing generational wealth-generating opportunity. 

I sometimes have TinySeed founders on this show, not because they are TinySeed founders, but because they have really interesting stories and most TinySeed founders are also part of the Startup To The Rest Of Us and the MicroConf community and Eran is no exception. I do ask Eran why he applied to TinySeed in this episode and you’ll hear his answer if you feel like TinySeed could be a fit for you as a bootstrapped SaaS founder, head to TinySeed.com/apply. We are opening applications for our fall batch within the next week, and that will run for about two weeks. If you hear this after September of 2024, you can always go to TinySeed.com/apply to get on our email list and learn about our next open enrollment. In addition, if you are an accredited investor and you’re interested in investing in companies like Gymdesk, ambitious B2B, bootstrapped SaaS founders, head to TinySeed.com/invest. And with that, let’s dive into my conversation with Eran. 

Hey, Eran Galperin, welcome to the show.  

Eran Galperin:
Hey Rob, how’s it going?  

Rob Walling:
It’s good, man. It’s been a long time coming. I’m glad to have you on here. So folks have probably noticed from the title of this episode that you had a $32.5 million strategic growth investment from Five Elms Capital. And I want to start the show by asking you what did it feel like that moment where you’ve refreshed your bank balance and you saw more zeros than you probably ever imagined that you would have?  

Eran Galperin:
It’s surprisingly a large feeling of relief. It was the end of a very grueling, even though not long, maybe in competitive terms, but for me, long process of three months where basically every day I doubted that this would actually end up well. And many times as sort of a psychological trick, I would kind of let myself feel, “So what if it falls apart? It’s all good.” When the money hit the bank account. Actually it happened very fast. We closed the deal on a Friday, 30 minutes before the wire cut off time and the funds were in the bank account the same day. I did not expect that before the weekend and I’m just like, “I guess it’s over. I guess it’s done. I can have a real night’s sleep today and maybe the entire weekend.” And I literally slept 14 hours a day for the entire weekend. That mainly just a massive feeling of relief. All this weight just washed down.  

Rob Walling:
That’s incredible. And had you been planning in your head of, “Once I have this money, I’m going to do XYZ with it.” Or did it just come in and you thought to yourself, “Well, this is it, I’m set for life at this point”?  

Eran Galperin:
It’s kind of a mix of both. So I didn’t really have an idea for things to buy, but I already had in my head financial plan of how I’m going to deploy this. I’m a proponent of the FIRE methodology, if you heard of it. Financial independence retire early and it’s basically revolves around investing in fund indexes that return a very stable amount every year and with this amount of money, I’m basically set for life if I follow this approach. So I knew I was going to do that. I ended up upgrading my car to basically the same model but newer and higher trim because I really liked that car. And now we’re in the process of, we bought a piece of land here in Tokyo where I live and we’re building a house on it. So that’s super exciting. Not something that I actually planned, but a month after the sale was completed, it’s like, “You know what? We should start looking into it.” And we’re now in the process. Those are the major things.  

Rob Walling:
What kind of car do you have?  

Eran Galperin:
So now I have an Audi RS3 for people who are into that kind of stuff.  

Rob Walling:
Nice.  

Eran Galperin:
It’s a nice car. It’s still compact, which fits with the very narrow streets of Tokyo, but it’s just a slight upgrade from the previous car, which was an S3. Basically exactly the same car on the inside, but a small upgrade that I felt like was well-deserved.  

Rob Walling:
Yeah, no doubt. And for folks listening, when I say you received a 32.5 million strategic growth investment for your company, Gymdesk, and we’ll get into what Gymdesk is and what it does in a minute, what does that term mean? Because a lot of folks might be thinking, “Oh, a growth investment, that means you raised money that went into the company.”  

Eran Galperin:
So our investor is a private equity firm and they did a majority acquisition of the company. They bought a majority stake of the company. I am left with a minority stake in it, and some of the funds are going to be used to grow the company. The majority of it is for them to acquire the controlling stake of the company. This is what the amount that is on the public statement is for.  

Rob Walling:
And so that means it goes to you and other shareholders and full disclosure, you’re a TinySeed company and so TinySeed obviously received some money as well, but that’s not why you’re on the show. You’re on this program because your story is pretty remarkable in terms of how you executed, how fast you grew and how you went about the sale process. 

So I want to roll us back a few years. Before I do that, I want to let folks know Gymdesk. Gymdesk.com, your H1 is gym management software that frees up your time and helps you grow simplified billing, enrollment, member management and marketing features that help you grow your gym or martial arts school. 

So take me back before you started Gymdesk and I know the inside baseball, Martial Arts on Rails was actually what Gymdesk was called, which is such a cool name for developers. I’m like, “Well of course I know exactly why he named it that.” But such not a cool name for non-developers, right? Because clunky, it’s long. People are like, “What do you mean on rails?” Did you get a lot of that? Is that why? Because you rebranded the company in ’21 or ’22 I think.  

Eran Galperin:
Most of our customers just referred to us as MA on Rails or just MAOR or some reason. I hated that acronym, but a lot of them used it and I just ran with it. So yeah, at the time I just winded down a previous company, a VC-backed company called BinPress that raised a seed round and just didn’t grow enough to raise another round and I was kind of burnt out on the VC model. It’s like I felt that company had potential, but because it didn’t fit the VC timeline, it had to shut down. 

So I wanted to go in a different direction. Me and my co-founder kind of split paths. He moved to the dark side and became a VC partner, and I started a bootstrap company back then that was called Martial Arts on Rails. I wanted to combine my hobby of many years, which was training in Brazilian jiu-jitsu, nine years at the time with my professional skills in software development. 

I did a lot of market research initially, I kind of tried avoiding going into the vertical we ended up going in, which is business management software because there’s some very entrenched players in this space. Now I know that that’s actually an advantage. They do a lot of the customer education for us. There’s obviously a lot of potential revenue to be had because they’re so big, but back then it looked very intimidating. 

Eventually I did decide to go that route just because everybody I talked to in this space said the current incumbents were just so awful. So I don’t want to name any names, but anybody in this space knows exactly who they are and I felt with my experience in user experience and software development, I could bring something better to the market. We launched in 2016 and me being a technical founder in every stop previously I was the CTO, some kind of engineering leader. I quickly realized that I had zero idea on how to acquire customers. And so began this kind of slow trial from zero to a livable wage over the course of three and a half years during which I got a full-time job as initially a software engineer and eventually a CTO of a e-commerce company in L.A. And only in 2019 I started working full-time on the business.  

Rob Walling:
Got it. So you were three years in, three years and nights and weekends on Martial Arts on Rails, which became Gymdesk. So that’s interesting. So it’s not the overnight success that people might paint it out to be, right?  

Eran Galperin:
It actually, it didn’t feel quick to me the last couple of years went in a blur when we were growing pretty fast every year, but the first five were a slog for sure.  

Rob Walling:
This is something I talk a lot about online or on this podcast is folks who don’t stick with an idea long enough and they launch one thing and then one thing and then one thing, “Nothing’s taking off so I’m just going to…” You were three and a half years in before you even had a full-time income, and then there was kind of a, I’d call it like a bootstrap or hockey stick moment where we saw this because you applied to TinySeed, I believe in 2021. You were cranking up, I think you were. Do you remember you were 30, 40K MRR by then?  

Eran Galperin:
Yeah, I was around 35K and by the time the program started already 40 and I remember having chats with some of the founders and the meetup we had in Arizona and they’re like, “You’re at 40K, why did you join TinySeed?” 

And I had a different calculation than them in my mind because I had the same kind of dilemma when I was thinking about applying. It’s like, “We’re doing pretty well. What can I get from TinySeed that I can’t get by myself?” And the framework that I use is if TinySeed helps increase the value of the company by more than the equity that they take, which was 10%, then it’s worth it. And it ended up being way worth it. So I think in that regard, it doesn’t matter that we were at 35 because we came in for maybe different reasons than some of the other companies in the batch.  

Rob Walling:
There are different reasons why some folks come in because they’re super early stage and they really do want guidance help finding product market fit. You didn’t need that. You already had it pretty strong. Some folks come in like I could really use the 120 to 250K investment. You didn’t really. Now I know it was a little bit helpful, but that’s not why you were doing it. Why did you decide, and really I think the question is what did you ultimately get out of TinySeed that makes you say it was worth it?  

Eran Galperin:
A lot of it, well, it started with me following your content on Startups For The Rest Of Us. I’ve talked to many investors and I can tell when somebody actually knows what they’re talking about. They’re not just repeating stuff they read on somebody else’s blog, listened to on a podcast, which is the case with a lot of the investors that I see. And I was coming in to get that kind of advice one-on-one. 

This is my first company that I’m building bootstrap first company that I got to a certain scale that I haven’t been able to at previous companies and I’m going into a lot of uncharted territory. I remember that we had pricing realignment engagement together. Me and you sat together and talked it over. That was a very scary process for me. We had a lot of long-term customers and I’m about to really ramp up the pricing on them and it helps so much that I can do it with somebody that already ran this playbook, also seen it fail at other companies, even your own after acquisition, I guess. That really helped me do this confidently and it went super well and actually kickstarted the next upward strand in our revenue growth and there were multiple such instances. This is the main reason that I joined TinySeed.  

Rob Walling:
I think that makes a lot of sense. Community and mentorship are the two things most people name most often and it sounds like the mentorship and advice was a big piece for you. 

You entered an extremely competitive space. There’s one 900 pound gorilla who as you said, no one likes, but there are dozens. I mean I’ll say every TinySeed batch we get one or two applicants at least that make it into calls that do something similar to this. Why did you succeed?  

Eran Galperin:
I think I can tell pretty accurately why we succeeded and it’s because we went against what everybody else in the market is doing. So we have the 900 pound gorilla like you mentioned, and a lot of the similar competitors kind of copied their playbook. They have a product and I think this is coming in a lot of B2B verticals that is very outdated and difficult to use. I guess the thinking is that business software doesn’t need to be accessible or easy to use and they just have a very strong sales motion and a lot of our other competitors are pretty much the same. I mean their products started at different points in time, so you can kind of tell, “Oh, this one is from ’08, this one is from 2011.” But they never bothered updating it afterwards. 

When I started Gymdesk without any sales knowledge, the only thing I can do was just talk to customers and make the product better. I myself went through a transformation with this company where I used to be that technical person that engineering lead that it would come to with customer complaints and it’s like, “Yeah, they’re using it wrong. They’re not very smart.” I would say mean things like that. And with this product I kind of realized it’s actually the opposite. The dumber, the feedback looks like the more opportunity there is to make the product better, and I really took that to heart and through this endless feedback loop made a product that just makes everything so much easier than our competitors. We might have a similar feature set, but the way those features and flows are implemented is completely different. And this is where I feel we really made our first kind of differentiation in the market. 

The other side of it is with the customer service. So anybody who works with me knows how responsive I am to emails, and it was the same with customers in the going when I was the only one talking to them. And when I started hiring for customer service, I made sure that we stayed with that mentality. Somebody sends a report that something is not working, we have to get back to them as early as possible and resolve it as quickly as possible. Not just issues, but also small feature requests where it seems like it’s a no-brainer. We would roll those out sometimes same day. You can find reviews of us on Capterra and other websites where the guy’s like, “Yeah, I messaged customer service, I talked to the CEO, and on the same day I get a new feature that solves our use case.” And you can’t beat that kind of experience. So this is how we kind of build our brand in this space.  

Rob Walling:
Got it. So you’ve referenced product that you built your product differently. It’s not just great product, but it is actually zigging when others were zagging, sales motion, they were really heavily on sales and you were more allowed self-serve I’m assuming, but.  

Eran Galperin:
I’m 100% optimized for self-serve, so it’s maybe a bit ridiculous, but in the early days, I actually refused doing demos. I just hate getting on video calls with people I don’t know. And people would email in, “I want the demo.” It’s like, “Yeah, we don’t do that. I’ll be happy to answer your questions over email, which is the medium I’m comfortable with.” But for years we just didn’t do any demos. We do do demos now. We have a full team, they help with onboarding, but because we didn’t have any demos and none of that motion at all, I really had to make the product shine in those aspects. So every time people would say, “Oh, I can’t do this in onboarding.” It’s like, “Okay, let me go back to the product and fix it like that instead of getting on a call and explaining to you how to do it.”  

Rob Walling:
And then support, as you’re saying, was exceptional. There’s one other thing you didn’t touch on that I watched firsthand. I watched you execute exceptionally well, like top 10%, top 5% of founders that I work with, and you are a technical founder who in 2016 launched Martial Arts on Rails and you didn’t know how to market. By the time I knew you in 2021, you knew enough about how to market that you were driving consistent, consistent, consistent growth. I say that word three times because it was just every month there were no plateaus. And then it just got better. I mean, the growth got faster. You eventually hired a head of growth and I mean you coming from development to marketing, a lot of people, as much as I say it on this podcast of all the successful TinySeed companies, all the TinySeed companies doing seven figures, pretty much inevitably one of the founders runs marketing from the start. 

Now you can eventually hire someone to do it, blah, blah, blah, but trying to outsource marketing when you’re 10K MRR, you and I both know that’s probably not a good idea. So my question is there’s a long way of asking how did you figure this out? How did you get good at driving tons of leads because everything else you said, building a great product, great support, self-serve people do that, and then they flounder and they plateau at 10K because they don’t know how to drive traffic. So I don’t know how to drive traffic or leads. How did you figure this out?  

Eran Galperin:
Yeah, I mean that’s definitely the part of building this company that took me the longest to figure out. I do have some background in writing, so I’ve written a lot over the years, mostly technical writing, but eventually moved into, I wrote about startups going through accelerators, stuff like that. So I had that in my back pocket. Also, some experience with technical SEO, so I thought for sure with SEO I could drive some leads to the product. Turns out that was also naive. It took me quite a while to figure out the SEO for this company, but now I have such a good handle on it that I advise other SaaS companies on this particular topic. 

I just had a call with one of the TinySeed companies where I analyzed their entire SEO structure and gave them actionable items. This is one of the things, it’s not like this with every marketing channel. Maybe it is, I haven’t figured it out yet, but specifically with organic traffic, you can approach it almost like an engineering challenge and really figure out a plan to attack it. And we built a really structured repeatable process there to expand and also retain the land that we acquire in SEO because to keep your rankings, it’s very difficult in a competitive market. 

It took me, I want to say five years to really figure that out. In 2021, when we hired the first full-time employee that was a content marketing editor, I knew this is our strongest channel and this is our best writer and I want to just keep investing in this channel. And it paid off. We still drive most of our leads through SEO. I think it’s over 60, 70% of our leads come through that channel, and they’re all extremely qualified leads. It’s a channel with a lot of buying intent. So yeah, it’s definitely something I had to work on. But just persistence with everything else, trying and failing, trying and failing and figuring it out, that’s how we did it.  

Rob Walling:
And to give folks an idea from ’21 to ’22 you doubled, from ’22 to ’23 you doubled, from ’23 to ’24 is not over, but you’re on pace to double. So it is like a really interesting growth curve. I like to call this because you started in 2016, it’s eight years to overnight success because all the people on X-Twitter want to know, how many people do you and I know that would stick with something for five years kind of grinding it out to figure it out?  

Eran Galperin:
I follow some people on Twitter that literally what they do is they build a tiny SaaS product and they give it a couple of months and then they sell it for peanuts on microacquire.com, I think it just acquire.com now. And just move on to the next. And they keep hoping that one of those will blow up, but that’s not how it works. If you’re going to only stay with it for a few months, it’s never going to happen.  

Rob Walling:
I want to dive into the acquisition because you received a lot of inbound interest. You told me offline, you said you initially ignored it. So it was what, 2021, you start receiving private equity firms that are reaching out, and this is a very common thing. People hit mid six figures, get into the seven figures, and it just happens. So how are you thinking about and dealing with all that inbound interest?  

Eran Galperin:
When it started initially, first of all, the language that they use in a lot of this inbound, it is very vague. I didn’t think it was about buying the company. I thought it was venture investment basically. They talk about growth equity, like we said at the beginning. At that time, I didn’t know exactly what that meant. It’s like, “Oh, are you interested in growth investment into your company?” I’m like, “No, I’m bootstrapped. Not interested in that.” 

Eventually one of them actually used direct language and I’m like, “Okay, interesting. I think we’re too small, but let’s talk and see where it’s at.” And we were too small at that time, but I started to get a sense of how things might go. And between 2021 and 2023, I must have taken close to 40 calls with different private investors, search funds, all sorts of different constellations. And I really got a pretty good lay of the land as to what a potential outcome might look like and at what revenue numbers it would make sense to sell. And I started having this kind of mental funnel in my head. It’s like, “Okay, if we hit those benchmarks, maybe it’s time to start thinking about running a process.”  

Rob Walling:
Got it. Why not run the company forever and take out profits?  

Eran Galperin:
That’s definitely an option. And some people do this, but I started to feel some burnout even in 2021. I ran the company with a bootstrapper’s mindset, always hiring maybe a couple of steps later than I really should have because I’m optimizing for profits. It’s really hard to disconnect the revenue going into the company from your own finances. At the end of the day, anything that’s left over in the company is your revenue personally, and I was doing a lot, just maybe doing too much was feeling burnout. And at some point it’s like, “You know what? I would be happy to take a step back and let somebody else run the company.” 

There’s also when you’re at a smaller scale and you self-select for the customers, everybody’s nice and it’s a pleasure to work with, but as you hit a certain scale, the small percentage of people that, I can’t think of a better word, just nasty people and you have to deal with them. And it gets to the point those people are above the level of even a full-time customer service person to handle, it leaves a dent in you. It always feels like they’re going to ruin your company’s reputation. We had people like trash us and all the social media channels for the pettiest stuff. I have stories that just make my blood boil when I think about it and I just don’t want to deal with it. Does this emotional connection as a founder, CEO, that maybe a professional CEO would not have because they didn’t build the company, they don’t feel it in their bones and somebody is just saying nasty things about them online and I just wanted to kind of remove myself a little bit from that.  

Rob Walling:
Yeah, I experienced the same thing. We don’t talk about that very much, but that stuff takes a toll on you. I don’t know if you got threatened, but I got threatened multiple times with where I’m like, “Do you mean that? This is becoming a safety issue.” It’s a law of large numbers. It’s like at a few hundred customers you kind of know everybody, at 1000 users, customers, it becomes a lot. And then we eventually had a free plan, so we had 30, 40,000 users at a certain point. It’s like you’re going to get some mentally unstable, demanding, narcissistic folks. And yeah, I can see it. Everyone sells. Like I say this, everyone sells eventually. I never thought MailChimp would sell and they eventually sold. I mean really, I had all these examples and they’ve all sold except for I think Basecamp is probably the one that I think about. 

So then I guess the question then is you start feeling like, all right, I’m burning out. This business is obviously worth a lot of money, but how did you know when it was time to sell? Because you could have sold it at a million ARR or two. It’s like do you just arbitrarily pick a point? What was it like for you?  

Eran Galperin:
So because we received so much inbound interest, I did really have a lot of insight into where an optimal result might happen, and it did seem to really funnel around a few million in ARR. That’s where a lot of the bigger players that can actually pay the big multiples start getting interested. At the lower ARR there’s definitely interest, but people would try for bargain. The multiples are lower, the terms are not as good, and I saw a very direct line to that number. With our growth numbers I was running this kind of projection P&L where if we continue at the same pace that we’ve been growing and add a little bit to it every few months, and it ended up being almost to the dollar accurate all the way up to 3 million. So as long as I was continuing with the trend that I built there, I’m like, “You know what? I’m good. I don’t need to sell now.” 

Unless I see crazy warning signs. And by the way, those crazy customers, those were the warning signs, like, “Is this it? Is this where I’m taking a tumble down death row for the company?” That did make me wonder, maybe it’s time to sell now before I really run into that customers that tries to ruin our business. But as long as we kept on that trend I could see the path. It didn’t seem too long. So if it was like five years into the future, I would not be able to do it. But it was about two years into the future I was like, “I think I can hold on for that and have a life-changing outcome there.”  

Rob Walling:
And let’s talk through the sales process because you’re one of the few people that I can talk to about how painful this is. And here’s the hard part is if you go on social media, if I say on this podcast, “Oh, it was so stressful. It was really stressful. No, trust me, it’s really stressful.” People say, “I’m sure it wasn’t that stressful. And also you walked away with money that you never had to work again. So really just deal with it.” But it drives people, it can drive people to the edge, to the brink, to the point of not sleeping to the point of I started having, hallucinations is not the right word, that would take it too far, but I started making shit up in my head that just wasn’t true. And at a certain point, Sherry, my wife was like, “Hey, do you know that that’s not, you’re in a weird place. You’re really fighting with people in a way that’s not healthy for you.” 

So for you, you worked with Discretion Capital folks on the podcast. No, A&R runs that and helps as a sell side advisory for SaaS doing multi-millions. And what was the process like for you? You can talk maybe a little bit about the mechanics of it, of how it actually panned out, but also personally, emotionally, what that all felt like.  

Eran Galperin:
Yeah, the process was much more stressful that I anticipated, and it’s mostly psychological in its core. First of all, it’s a very technical process. That’s another thing that I didn’t anticipate everybody reads about due diligence. It seems like a very straightforward thing. You just provide the documents for the company, you let them look at your code base, la-da-dee-la-da and you’re done. And it’s so great, but it’s actually so technical and complicated. There were times during due diligence and it’s mostly around stuff like taxes and company structure that the other side’s legal team would just disappear for three, four days a week looking into something. And I’m like, “Is this a big problem? Is this a small problem? Is this taking down the deal?” I just have no idea. And this kind of ambiguity where you have no idea if things are going well or not for weeks at a time, it really gets to you eventually. 

And it’s a lot very minute things written in some contract from few years ago, and it’s like, “Is this a problem? It looks so minor. Is this really a problem?” And they’re like, “We don’t know. We’re going to need more time to find out.” It’s like, “Sounds bad.” But you just stick with it and eventually you get through due diligence and then you have the purchase agreement aspect. I thought once we’re done with due diligence, we’re done. We just need to sign the contracts and get on with our lives. But hell no. That was just half of the process. It was crazy.  

Rob Walling:
You keep spring [inaudible 00:29:21]. Yeah, you just don’t know.  

Eran Galperin:
Yeah, you just don’t know those things. Luckily I had Einar to provide some emotional support. He told me that basically his role once the process starts is to be therapist for the founders. And it pretty much ended that way. Every time I would go to him, it’s like, “How big is this issue?” And it’s like, “Don’t worry. It happens in every sale process.” Like, “Okay, if Einar says it happens every time, it’s fine.”  

Rob Walling:
It’ll be okay.  

Eran Galperin:
So he would calm me down and this would happen a lot. Him and my lawyer, I want to give credit to Kaiser, just did an amazing job, especially during the purchase agreements. Every word in those agreements can have such a long-term effect on your life and you’re like, “I don’t even know what any of this means.” So having a really good lawyer that is patient and kind enough to explain it in a way that you can understand is so important. 

And still, we would get hung up on things where us and the buyer had some sort of disagreement on, and is this solvable? I don’t know. And again, days would go by, weeks would go by from my end, this is the only thing going on in my life other than running the business, but they’re dealing with multiple deals at the same time. So I don’t know if they’re just ghosting me or actually busy. Is this a tactic that they’re using to get me to come to their side? It’s super stressful. I usually consider myself a very even-keeled person, and I was taken aback by how stressed I got near the end of the deal. Even though we had all this inbound interest, I felt like if this deal falls apart and we go back to market, we will be able to get a really good outcome regardless. 

But I just didn’t, once you get too deep into it, you hate so much to go back to the beginning, do the due diligence again, like, “Oh my god, to go for that will be a nightmare.” So yeah, near the end of the process, I literally got insomnia. I would lie down in my bed, refreshing, looking for emails from the lawyer that I felt like, “Okay, I have to get out of bed, respond to this now, otherwise I’m going to stop this deal for the weekend because it’s a Friday.” And it’s got to the point where once I turn the phone off and I’m trying to go to sleep, I just can’t fall asleep. So it’s like, “Okay, it’s eight A.M. I’m just getting up. I didn’t sleep today. I’ll just keep going.” And, “Oh, what do you know? Another email came in from the lawyer. So good thing I didn’t go to sleep.” And it just stayed like that for the last couple of weeks of the process.  

Rob Walling:
Yeah, it’s brutal. It’s brutal on your mental health and on your physical health. Not sleeping is rough too. Then that, just everything else is distorted. You can’t get through that, but you made it to the finish line. We started with this conversation, hearing you refreshing that bank balance and seeing all the zeros, huge sense of relief. You’re still a CEO of Gymdesk, but what are you doing now as you look ahead over the next six months, five years? What’s on your mind and what are you doing with regards to Gymdesk and with other projects?  

Eran Galperin:
Yeah, so as I mentioned, one of the goals, or rather one of the reasons for selling the company was due to burnout. And when I was talking the terms with the buyer, I mentioned that I would like to step down as CEO after the company is sold and probably over the course of maybe a year or two, eventually walk away from the company or at least have the ability to do that. So currently I’m still the CEO. We closed the deal two and a half months ago. We’re in the process of recruiting a professional CEO to come in and take over for me. 

I literally had an interview just before this call, an hour long interview, by the way, it’s been a fascinating process interviewing for the CEO position. I’m talking to really incredible people and I’m super excited to potentially work with those people. With me taking a small role in the company, mainly focusing on product. That’s where I feel I can make the most impact at the company. I’ve been doing well in the other aspects, but those are definitely not my strong suits. So going back to focusing on product and over time, reducing my involvement in the company. I still hold some minority stake in the company, so I want it to do well, but maybe more on a consultancy basis eventually. 

The main thing for me right now, and I already started doing that, is I’m looking to help mentor other B2B SaaS founders from that zero to one and a potential sale process, and also do some angel investing in that same realm. So I’m talking to a few founders already. Those conversations actually are incredibly invigorating for me.  

Rob Walling:
You get to see the other side.  

Eran Galperin:
Yeah, I’m just incredibly happy to talk about those topics. It’s like I have somebody who also understands what I’m talking about and having those conversations kind of like what we’re doing right now.  

Rob Walling:
Yeah, this is the best job I’ve ever had, what I do both on this podcast, but running my heart on a TinySeed, I get to do that every day. And you see the appeal of it. It keeps you in the game, it keeps your head sharp, but you don’t necessarily have to do the grind that you did for so many years where everything’s hanging by a thread. If someone just heard you talk about, “Hey, I am mentoring and potentially angel investing, they wanted to reach out to you, what would be the easiest way for them to reach you?  

Eran Galperin:
So I have my personal website, it’s EranGalperin.com if you just Google my name, you’ll find it. You can contact me through there. Also, I’m on Twitter and LinkedIn, easy to find. Feel free to reach out if you want to talk. I’m super excited to talk to founders about B2B SaaS. It’s kind of my thing right now.  

Rob Walling:
Yeah, and it’s not just, “Hey, talk to me if you want me to invest or something.” But it’s like you’re pretty free with your advice and you have obviously a lot of knowledge and experience having grown this company in extremely competitive space and having an incredible life-changing exit.  

Eran Galperin:
Yeah, it always gets me worked up to talk to a founders in the early stages and hearing about what they’re doing. It’s like, “Wow, that’s so exciting.” So yeah, I love having those calls.  

Rob Walling:
Eran Galperin, thanks so much for joining me on the show today.  

Eran Galperin:
Thank you so much, Rob. Been a pleasure.  

Rob Walling:
It was an absolute pleasure having Eran on the show. I hope you enjoyed this episode and took away some motivation and some lessons and some learnings that will help you grow your business this week. This is Rob Walling signing off from episode 728.

Rob Walling:
I’m back with another episode of, Startups For the Rest of Us. Today’s episode is Hot Take Tuesday. Welcome back, Einar and Tracy, and we talk about topics relating to bootstrapping and growing your company, including how mostly bootstrap company, Gymdesk, sold for more than $32.5 million. In fact, after we recorded this episode, I recorded an interview with the founder of Gymdesk that will air on this very feed in the next couple of weeks, so stay tuned for that. Today we also talk about whether hiring is getting easier for bootstrappers, what changes in mindset might be present between founders at different MRR levels, how to identify what really moves the needle, and more Hot Take Tuesday topics. 

Before we dive into the episode, if you’re not on the email list for this show, you should head to startupsfortherestofus.com, enter your email. What you’ll receive from there is a weekly email with the show notes and a recap of every episode with timestamps. You can of course opt out of that and still receive the less frequent emails we send. But you’ll also receive two never-before-released episodes, Eight Things You Should Know Before Launching Your SaaS, and, 10 Things You Should Know as You Grow Your SaaS, as well as a PDF of the 5 PM Framework. 

In addition, I’m just wrapping up a book about selling your company. My wife, Dr. Sherry Walling and I, are in the final days of locking in that manuscript. If you get on the email list here, you will hear about that book when it goes live. So, with that, let’s dive in to Hot Take Tuesday. Welcome back to this Hot Take Tuesday Roundtable. My first guest is someone you know very well. Tracy Makes on Twitter, our very own Tracy Osborn. Hey, Tracy. Welcome.  

Tracy Osborn:
Excited to be back.  

Rob Walling:
It’s been a while since Hot Take Tuesday. Bit of travel, bit of not a lot of news. I mean even today, I like the docket today, but two or three of them are just questions that I think that-  

Tracy Osborn:
It’s the summer.  

Rob Walling:
Yeah.  

Tracy Osborn:
Yeah, things are chill.  

Rob Walling:
My other panelist is TinySeed’s very own, Einar Vollset. Welcome to the show.  

Einar Vollset:
Thanks for having me.  

Rob Walling:
Let’s dive right into our first story, and we will link this up in the show notes. It’s a PR Newswire article. It says, “Gymdesk announces a $32.5 million dollar strategic growth investment from Five Elms Capital.” Gymdesk of course being a TinySeed company.  

Tracy Osborn:
Yeah.  

Rob Walling:
So, we are stoked about this. I’m very happy for Eran, the founder. I think the question I want to toss to you first, Einar, is, does this prove or at least help to prove our thesis of TinySeed? Which is B2B SaaS companies are worth a lot of money, and even the little ones, even the TinySeeds and the MicroConfs, they don’t have to be unicorns to have enormous valuations. Obviously raising at 32.5 million means this company is extremely valuable now. So, talk us through your thinking.  

Einar Vollset:
Yeah. I mean, they didn’t raise at 32.5 million, they raised 32.5 million. The valuation was even higher than that. I think it’s a great story. As we know, even the majority of our successful companies don’t even necessarily raise any more money after us, but I think what this shows is that some of the TinySeed companies will grow into companies that will take this kind of money from growth private equity, where it’s like, there’s a lot… I actually think a lot of people don’t realize that these software private equity growth capital funds even exist. They think, okay. There’s VC and that’s it. But realistically, once you get past about a million in ARR, there are pretty deep pools of capital that are interested in investing in these kind of companies and taking them further and taking them to the next level. 

So, in that regard, it’s very exciting for us. It’s obviously very exciting for Eran and the team, and I think TinySeed, we sold some of our equity as part of the transaction, but we also rolled a substantial amount forward, and we expect them to just keep growing. The big player, so Gymdesk is obviously in the gym management fitness space. The big player in the space is publicly traded, Mindbody. Everyone in the space hates Mindbody, and I think there’s a path to where Gymdesk basically becomes the better version of Mindbody and potentially is public down the line. So, for us it’s very exciting.  

Rob Walling:
It’s great as a founder to enter a space with a big incumbent that everyone hates, and to be in a vertical. This is something I called back in January, my predictions for this year of vertical SaaS and orthogonal SaaS are the places where we see a lot of opportunity for founders, not only to get in and carve out a space for themselves, but I would argue, I would posit that exiting and evaluations can likely be higher than if you’re building a big horizontal thing.  

Einar Vollset:
I think that’s true. I mean, I think in general too, I see this in the Discretion Capital side. We see the appetite for M&A and outcomes is substantially higher for sticky vertical SaaS, where there’s high recurrence, low churn. Obviously they want growth, but they don’t need to have 500, 600% year-over-year growth to have a business that is backable or acquirable at that size. It’s also, it’s one of those things like, look. Gymdesk, they raised his money at a huge valuation, but the only other money they raised was from us. That was it.  

Rob Walling:
Right. I wonder if this means they’re no longer mostly bootstrapped because that’s a lot of money. It’s a lot of money. Just so people have an idea before I kick it to Tracy, Einar mentioned Discretion Capital, he is the founder of Discretion Capital, which is an M&A advisory for B2B SaaS companies doing two to 25 million ARR, and Discretion represented Eran and Gymdesk in this transaction.  

Einar Vollset:
Yes, indeed.  

Rob Walling:
Tracy, what’s your take on this whole deal?  

Tracy Osborn:
To repeat what Einar said, it was the whole private equity path. When I was a startup founder and when I first started TinySeed, I didn’t even realize that was an option. I’ve been seeing articles, I’ve been hearing Einar talk about this for the last few years, and then I’ve been seeing articles in the last few months about more people talking about the current economic climate when it comes to venture capital, and how private equity is becoming more of an option, or more of something where people want to go for. People are more aware of it and it’s more of a desirable option for a lot of companies that are wanting to exit. 

So, it’s really cool to see an example on this directly from TinySeed. I think this is a great example to other founders out there who might be struggling with traditional VC to look at this direction, because I think there’s some folks who are just like, “Uh, private equity.” I think there’s cases like this where you can see where private equity can position Gymdesk and give them resources they need to grow up against something like Mindbody.  

Einar Vollset:
Yeah. I think it’s true. I think fundamentally a lot of people have a view of private equity is from a Bruce Springsteen song. It’s like they came to town, they bought the factory, shut it down, and now my father’s an alcoholic, type thing. But what this proves, and look. Gymdesk isn’t the first company, TinySeed company that did this. We’ve had at least one or two more. We think, given the number of companies that we’re backing and how they’re growing, we’re expecting more and more companies to decide that they’ll get to a million or two or five or whatever, and decide that whatever got us here won’t get us there. Having more capital and in some cases advice and experience to go from say five to 50 million in ARR, is a viable path. 

I also think that there are more companies that started out on the IPO VC path, and have built substantial businesses that make sense. They’re doing two or five or 10 million or more, and they realized they’re not growing it. I think it was Gary Tan had put out some stat about 2023 as like, the medium growth rate you had to have to be a successful series A VC, raise a series A VC round in 2023, was 600% year-over-year growth, but-  

Rob Walling:
A lot of companies aren’t going to hit that.  

Einar Vollset:
That’s not the only path. Yeah, that’s not the only path. Look, there are companies out there, there are investors, certainly you probably have to be at a reasonable scale. The fundamental thing about private equity is they care more about downside protection than VC does. But the flip side is, if you can provide that downside protection by being at a certain scale, then the kind of outcome that they’re looking for, three to five X in three to five years, might be better and more aligned with what it is that you want to do with your life. It’s like the way that I put it in one of the projects that I’ve got going called, Next Catalyst, is do you want to be rich or do you want to be king? There are some people who basically the thing they care the most about is to be famous. They want to be known as the Elon Musk of the world. They want to be known as an amazing startup founder that succeeded and rang the bell at NASDAQ. Then there’s the rest of us who is like, “You know what? I’d rather just be rich.”  

Rob Walling:
Onto our next topic with layoffs and back to the office, in effect. Is it getting easier for bootstrappers to hire? Tracy, what is the word on the street? We have 171 investments across TinySeed, B2B SaaS, almost 300 founders now. What’s the word that you’re hearing in terms of hiring difficulty or ease compared to the last couple of years?  

Tracy Osborn:
That’s an interesting question. Actually, I’m not sure if I have specific stats on that. I have a lot of gut feelings. I mean, hiring is always hard, right?  

Rob Walling:
Gut feelings are fine.  

Tracy Osborn:
Yeah. Hiring is always going to be hard. With the folks who are used to working from home and they want to have those benefits of working at home, there’s pros and cons in all of this. Where these giant companies want people to go back to the office, and so they could be looking for… Might be easier to find these folks who are wanting to work from home, and might be easier to find those folks that work at those big companies. However, the other thing that I think I’ve heard about is also the mindset of these potential employees and whether they fit within a bootstrap company. 

Because a bootstrap company is not going to pay as well as one of these giant companies. There’s going to be a lot of benefits, like working from home and the flexibility that you would get that people might have got used to in this era of being able to work from home. But bootstrap companies are going to have to work a little bit differently. So, there’s some pros and cons there for the folks who are trying to find these workers. It might be easier to find people, but they might not have the right mindset.  

Rob Walling:
To give you some data, we just released a State of Independent SaaS Report for 2024. Folks can download that at stateofindiesaas.com. In it, let’s see, I’m on page 18, it says, “85% of companies we surveyed,” so we surveyed 700, almost 700 bootstrap, mostly bootstrap SaaS companies, all MicroConf, TinySeed type companies. “85% reported that the difficulty in hiring people is either the same or easier than last year.” That feels about right. Most people are saying it’s same or easier. In addition, this was I think the first year where we saw hiring, maybe it was the first time we surveyed because it was two years ago, but, “We see that 30% fewer companies are hired in 2023 compared to 2021.” 

Again, this is bootstrap companies. We know there was a big VC bubble and there was a lot of hiring and now there’s layoffs, but it certainly happens across our type of bootstrap companies as well. The plan to hire in the next 12 months was down 17%. So, even though it, to me, anecdotally and obviously from these numbers, it appears that it is easier for bootstrappers to hire. I think a lot due to what I already mentioned, which was like, there’s a bunch of layoffs and there’s a lot of back to the office, and that’s all… Being remote has always been a bootstrapper advantage. Einar Vollset, you have anything to add?  

Einar Vollset:
No. I think that’s pretty much it. I mean, I think certainly the return to work is part of it. I also think there’s less competition from the larger firms, who back in the boom days were just hoovering up every talent and not talent in the world. That’s not been happening and layoffs have been happening. So, people aren’t just like, “Why would I ever work for a bootstrap thing? Anyone can get a job paying crazy money at Big Co.” Those days are not there anymore. So, that might be part of it too.  

Rob Walling:
Our next topic is a question from Twitter, and I don’t know if I want to answer the exact question. So, the question is from @SunglassesFace, name is Orly. “What change in mindset do you notice between founders with 100 MRR, 1,000 MRR, 10,000 MRR or 100,000 MRR?” The reason I want to change the question is, we’ve watched dozens of founders hit all of those milestones and they’re the same founder. The mindset doesn’t shift that much. You look at a Ruben Gomez or a Ron Galperin or Gymdesk. It’s like, the mindset from the start was, do things really fast, ship a lot of… Be mostly correct. Be right most of the time, have a good gut feeling. You do that when you’re at 100 and you do that when you’re at 100,000 MRR. But I don’t think that’s what Orly @SunglassesFace is asking. I almost think the question is, how do the challenges that you face differ from 100 to 1,000, to 10,000, to 100,000 MRR?  

Tracy Osborn:
Well, I think it’s a misconception, because some folks, I think, when they’re at the early stage, it’s like, “Is my mindset wrong? Is the reason why I’m not growing, is it because of my mindset?” So, I think that question stems from this misconception and that’s what you’re trying to explain. I just wanted to harp on that thing, is that there’s a lot of things to do. It’s not necessarily just mindset, you have to have a growth mindset, but that growth mindset is going to be there at every stage.  

Rob Walling:
I agree. With that in mind, Einar, what do you think the changes are? We don’t even have to go through all four of these. But when someone’s at 100 MRR versus 10,000 MRR, let’s contrast those to start. What are the different challenges?  

Einar Vollset:
I don’t know. At that stage, I don’t know that there is a difference, because I think it’s not that different. There’s a right, I think, strongly opinionated, there’s a right mindset and it’s just, move fast and just do a lot of… Just when it’s working, keep doing more of the stuff that’s working. I think what I observe, and maybe it’s because of how I operate and what I do, I think there’s more of a break at above even these numbers of what he’s talking about. I think what we very commonly see is, I think a lot of people, whether they’re at 100 or 10,000 or whatever MRR, they have this view that, “Oh, once I get to a million in ARR,” 83.33 whatever it is in MRR, “Then everything will be great. That’s it. I’ve made it. I just need to do more of the thing that I’ve already proved, proven to make it.” 

Actually, Jason Cohen did a great piece on this, talking about, well, I think he called it the Elephant Curves or something like that. It’s basically the myth of continuous exponential growth. What he says is, I think he used the example of HubSpot. He says, “Look. It looks from the outside like it just is up and to the right graph, and that’s how they did it. They just did more of whatever it was that was working. But actually, if you look underneath the covers, it’s one growth curve stacked on top of the other. Where it’s basically, they launched a new product and then they added another channel, and then they launched another product, and another channel.” I think the biggest mindset change that I’ve observed repeatedly is, people, once they get past about a million in ARR, or two or three, they get to the stage they’re like, “Oh, my growth is stalling out now. What I was working, my market is saturated, my niche is saturated.” 

The mindset change becomes, “Okay. I’ve got to do something new again. Not just a thing that was working. I’ve got to go after another thing and another thing and another thing.” That, I think, is the biggest mindset change. The people who fail to do that, quite often they end up in a situation where, because all growth decays over time, they end up in a scenario where they have a great business that’s growing 100%, and then they have a great business growing 40%, and then they have a great business that’s growing 15%, and then they have a business that’s not really growing, and then it starts to decline and now they’re like, “Crap. I should have sold this a couple of years ago.” I think that happens a fair bit.  

Rob Walling:
Tracy, what do you think about these revenue MRR levels? Do you agree with Einar? He was saying 100 to 1,000, or 100 to 10,000 is similar. Because I think there’s a difference at 10,000, but I’m curious to hear what you think between these levels.  

Tracy Osborn:
Yeah. What I have in my notes was, early stage is finding product market fit, middle stage is pouring fuel on those areas at work, and then later stage is broadening out. So, disagreeing with what Einar says, and I’ve seen this as well, is that folks get to that certain level of one million in ARR and they’re like, “No. I don’t want to do it again.” It’s like, yeah. You have to figure out how to do it again, but in a different area. So, I guess that’s a mindset thing, is of just that growth mindset, being aware that you’re going to have this wonderful growth and the mindset of knowing that it will end, and therefore being able to react or prevent it and react appropriately before that down curve happens. That is something that we’ve seen a lot of folks run into that trap.  

Rob Walling:
Right. Looking ahead at your plateaus.  

Tracy Osborn:
Mm-hmm. Don’t wait till the plateau happens.  

Rob Walling:
Yeah. I talk about it in three phases, and there are more than this, but the first phase is building a product. Second phase is building a business, third phase is building a company. Usually I think of product as being zero up to usually about 10K MRR, to be honest. It’s like, “I have a product. I’m trying to figure out, does anybody want this? Can I sell it? What’s the pricing?” You’re just fumbling. You have almost no product market fit, or very weak product market fit. Between 10 and 20, I feel like, “Oh, now I have revenue, I’m probably going to have expenses. I have to start thinking about this as a real business a bit.” Then I think from that point up until somewhere in the 50 to 100K, that’s where you’re building the business. Then 50 to 100K, I think you’re building a company. That’s when it’s like, “I need really good people. I probably need to start thinking about hiring managers and delegating a lot more,” because usually in a SaaS company, you have a lot of folks on your team.  

Tracy Osborn:
Not going to be the first person on the ground anymore, relying on other people. A lot of things are going to change at that point. The mindset to be aware and ready for those changes too.  

Rob Walling:
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Our next topic is how to identify what really moves the needle. This is a question from SanderFish on X Twitter, and it was asked directly of me. I posted, I don’t know, it was about a month ago, and said, “Hey, ask some more intermediate and advanced questions.” I like this one. SanderFish says, “Often it feels like SaaS success is an accumulation of many small decisions and improvements over time.” Which I would 100% agree with. “How do you identify what really moves the needle?” Tracy Makes, how do you identify?  

Tracy Osborn:
I like that Einar brought up earlier in the last question, talking about founders constantly working on new things and getting things done. In that, folks also need to be… They don’t need to lose track of analyzing how well those things do. It doesn’t have to be that hard. As things are going through, make sure that you’re adding the right referral links or whatnot, so that as you’re setting up these marketing campaigns and working on three things at once, that later on you can spend 15 minutes going back and being like, “All right. Cool. I did these three things. Now I can track all these things that are happening.” 

Sometimes people can get into this thing where they’re like, “Got launch, launch, launch. Do things, do things, do things,” and it’s like what actually was working? What was actually worth the amount of time that you were spending on this? You have to remember to do maybe a monthly cadence of looking back at what you have done in that month and then analyze what things are happening. So, you actually can identify what’s moving that needle. That’s hard to do as a founder because you have to be constantly launch, launch, launch, and it’s really easy to forget to do that analyzing process.  

Rob Walling:
What do you think Einar? How do you identify what really moves the needle?  

Einar Vollset:
I think while important, it’s more important just to do more… Then if things are going well, then great. So, I think there’s two hurdles for most founders that I see, that I work with. The main problem isn’t trying to figure out what’s working, it’s doing enough experiments so that something is working. Look, if they do 25 things and then two or three of them are working, but they’re not totally sure which ones are working, but they’re just doing it, that’s much better than what most people do. Which is they overanalyze and do two things and neither of them work, or goes backwards. That being said, I do think it’s important, to Tracy’s point, once you have some stuff that is working, it’s got to be like, “Okay. What do I double down on? What is it that’s really working?” 

Because the other thing that, mistakes I see people make is, they’ll read the Traction book from Gabriel Weinberg, and they’ll try a bunch of things and something’s working, and then they figure out something’s working, but then they won’t really double down on it and try to squeeze everything out of it and really explore how big that success can be. Instead, they wander off and pick something else to do, and then another thing and another thing. It’s the point where, look. This was working, just double down on the thing and just make sure you squeeze the full growth out of it.  

Tracy Osborn:
It’s like shiny object syndrome, because it is really fun to launch a new marketing campaign. So, it’s just like, “Oh, how to set up this thing, how to learn a new thing and do this kind of thing,” and forgetting to really track on and follow up on those things.  

Einar Vollset:
I think sometimes people have this, once they have this working, I know that I do this sometimes, it’s like if they have something that’s working, they’re always like, “Great, it’s working. I always know that I can rely on that and do more of it if it’s working. So, I’m just not going to do that because I have it in my back pocket. Then I’m going to go do these other things and explore more so I have more things in my back pocket.” I think that’s a mistake most of the time. Particularly for growth channels and things like that, it’s like, no. This is working now, but you have no idea, does it work 50% more? Does it work 5,000 times more? You don’t know until you really try. So, I think that’s a mistake people make.  

Rob Walling:
Yeah, it’s funny. Tracy said, launching a new marketing campaign is fun, so is launching a new product. It was just building more, so is writing features. I think there are a lot of rules of thumb and a lot of frameworks and guidelines that I talk about on this show, we talk about in MicroConf and obviously to TinySeed companies that are in my book, whatever. You should probably listen to them in most cases, if you don’t know anything else. It’s like, this is a great start. It’s like, learn the rules, then master the rules so that you know when to break them. But if you never learn the rules, then you don’t know that you shouldn’t start a B2C two-sided marketplace with Freemium and launch seven products and blah, blah, blah, and try to do viral marketing on my social media following. 

I think I’m going to build some incredible business. It’s not impossible what I just said, but the odds are stacked dramatically against you. So, listen to those who have gone before you. When I think about trying to figure out what’s going to move the needle, usually I think, what has moved the needles for others? A million things I could do, but founders who have it working, what are they doing? Then try to generalize that. So, I look at the best, most successful founders. I mean, I was doing this as I was coming up and saying, “What’s Jason Cohen doing? What is Hetan Shah doing? What is these people who are building incredible businesses?” Einar, you have to discount it. They’re not Steve Jobs and they’re not Elon Musk. I am a bootstrapper. I can’t model myself after those people. I can’t even model myself after Basecamp, because I didn’t launch a SaaS in 2004 that gets… What did they say? 10,000 trials a month or something. 

It’s just, I’m not in that situation. They can do stuff, like not market, like not sell, because they’re in a luxurious position, and good for them. The luck and timing were one and two, Jason Fried told me that for their success. Unless I can replicate luck and timing, I can’t, then I need to look at folks who do it and grind it and figure it out, like Eran from Gymdesk, like Ruben from [inaudible 00:25:00]. There’s dozens and dozens of TinySeed founders that I would look at and try to model. That’s why I write the SaaS Playbook. You can buy it for $10 on Kindle, read through that. If I were to try to prioritize stuff, I would start with the stuff in that book, not the stuff that I see people yapping about on Twitter. 

The approach is where it’s like, build an audience. Yeah, great, that’s fun. But it’s not for your SaaS company. Build your network, not your audience. So, I don’t know. I prioritize things by first trying to have some type of framework to limit its infinity, things I could try, down to 20, 50. There’s only that many. Then I would, if I have a gut feel, a strong gut feel, I would do it myself. Otherwise, I would get people involved. I’d say, “Einar, what do you think I should do?” I’d say, “Tracy, Ruben, Eran, what do you think I should do?” People in my mastermind, advisors, whoever, “What do you think? I am down to this list of three now, which should I try first?” Get an outside counsel and then go for it.  

Tracy Osborn:
Yeah. It helps get you out of that tunnel vision and out of that, “Oh, I’m really excited about doing one thing because that’d be more fun,” versus the other thing that’ll actually move the needle.  

Rob Walling:
That’s the thing that… I talk about this all the time, where it’s the ice cream versus spinach. What’s really yummy is ice cream. I want to lose weight, but I want to eat ice cream and not spinach. Those two don’t go together. So, when someone tells me, “I want to grow a SaaS company.” “Great. Here’s my advice,” blah, blah, blah. They’re like, “Oh, but I want to do B2C and I want to launch seven products and see what sticks.” I’m like, “So you want to eat ice cream and think that you’re going to be…” That’s my analogy that I make. Implicit in this question, how do you identify what really moves the needle? 

Honestly, what moves the needle is often not ice cream. What moves the needle is often not what we want to do, unfortunately. There are examples of folks who did exactly what they want. It’s like the one person who built a social media following, and maybe there’s three. Built a social media following and also just writes a lot of code, and that works. We all want to do that as builders, but usually what moves a needle is not that.  

Einar Vollset:
Because I mean, the reason everyone’s heard of them is because it’s noteworthy.  

Rob Walling:
Exceptions.  

Einar Vollset:
It’s like, holy moly. Look at this guy. He’s on the beach in Thailand and he’s got seven products and they’re making $50,000 each, and it’s working really well. Everyone’s like, “Oh, I’ve got to follow this guy. Look at this.” Well, yeah. But for each one of those guys, there’s 500 people who are running a million ARR, or five million ARR, or 100 million ARR businesses that did nothing of that.  

Rob Walling:
Yeah. It’s a trip. It is a survivor bias. I’m not taking anything away from people who’ve made that work, but it really reminds me of a rock star or someone who gets into the NBA. Like there’s 500 NBA players, I believe, approximately. It’s like, how many people each year try to get into the NBA? That’s what this feels like. It’s that hit based, you’re decreasing your odds. Those are not the things you should be working on. The blocking and tackling of what we talk about on this podcast, and what we talk about at MicroConf and what I put in my books is-  

Einar Vollset:
Can you tackle in basketball? Is that allowed?  

Rob Walling:
I switched metaphors to sports ball, to football.  

Einar Vollset:
Sports ball.  

Tracy Osborn:
Nerd.  

Einar Vollset:
Blocking and tackling in basketball would be hilarious. We should do that.  

Rob Walling:
We should have full contact basketball.  

Einar Vollset:
There you go.  

Rob Walling:
On that note, we are going to wrap up today’s Hot Take Tuesday. Tracy Osborn, you Are Tracy Makes on Twitter, and also one of the folks behind the @TinySeedFund Twitter account, X, Twitter. This is what I’m calling it now, but…  

Tracy Osborn:
It actually works out pretty well when you say X Twitter, it’s like-  

Rob Walling:
Like E-X-Twitter.  

Tracy Osborn:
Exactly. Used to be. Company formerly known-  

Rob Walling:
Formally known. Yeah.  

Tracy Osborn:
Because when I say X, it’s like, what are you talking about? So, I keep saying X, Twitter. Einar Vollset, you are Einar Vollset on Twitter, mostly Tweeting about the San Francisco Giants.  

Einar Vollset:
San Francisco Giants. Who are playing really badly at the moment, but will turn it around.  

Rob Walling:
It’s possible. It could happen. Thanks you two. Thanks for joining me.  

Einar Vollset:
Thanks for having me.  

Tracy Osborn:
Thanks for having me.  

Rob Walling:
Thanks again to Tracy and Einar for joining me on the show this week. Thanks to you for listening to, Startups For the Rest of Us. Whether you’ve heard six episodes, 60 episodes, or 600, it’s great to have you back. I enjoy spending every week in your earbuds. This is Rob Walling, signing off from episode 727.

Rob Walling:
You’re listening to Startups for the Rest of Us. As always, I’m your host, Rob Walling. And in this week’s episode I’m flying solo to bring you a handful of topics that I think can provide you with some motivation or a framework or even a tactic or a strategy to help you grow your business faster. Most folks who listen to this podcast are bootstrapped or mostly bootstrapped founders. Many of them are starting SaaS companies, but there are also folks across many industries including info products, construction, legal, folks who just want to hear the stories, the guidance, the advice. Topics for today include an update on the The SaaS Playbook, sales numbers, and I have some interesting findings and takeaways from those. I’m not just going to rattle off a bunch of numbers, but give you percentages of what channel sold the most and some learnings that you might be able to take away from those numbers. 

I’ll be talking about having access to information versus motivation, and I’ll talk about making your first level last. Before I dive into my first topic, I want to encourage you to check out Discretion Capital. So if you’re a SaaS founder and you are approaching seven figures of ARR recurring revenue and you at some point have thought about selling your company, you should reach out to Einar, the founder of Discretion Capital. You’ve heard Einar on this podcast. He is also the co-founder of TinySeed. Discretion Capital is an M&A advisory for B2B, SaaS doing between two and 25 million ARR, and they get amazing multiples. This is what they do for a living is handle this process for you. And the reason I said if you’re approaching a million is usually even if you’re not at two, you want to start thinking about this 6 to 12 months before you sell. 

You want to get things in order and just understand what the process might be like. You can talk to Discretion. Einar is not a sales guy. He’s not going to push you on stuff. He’ll have a conversation. What is your B2B SaaS business worth? If you’re getting inbound offers already to buy your business, do you need someone who can help give you some advice on what you can do with those? And of course, finding the best buyer for your SaaS. This is where we talk about how once you’re doing 1 or 2 million, you switch from net profit multiples to revenue multiples, and that’s what Discretion Capital does. They are the best in the business at what they do. And of course, I wholeheartedly recommend them, discretioncapital.com, if you want to find out more and schedule a call with Einar. 

So to start with, this week as I’m recording this, I posted on X, Twitter. I said, well, SaaS Playbook has just sold its 29000th copy and I give thanks to everybody. And by the way, if you’ve purchased a copy or you’ve gifted or recommended it to a friend or you’ve given it a shout-out online, I’m super grateful because that is the number one reason the book continues to sell. And I totally appreciate any word of mouth. If you really think about it, across my audience of say it’s about 125,000 people across YouTube, podcast, email lists, whatever, and that’s trying to de-do. But if you just added them all together, it’s significantly more than that. But trying to actually get to a real number of folks that I can reach, I would figure that I would sell 6 or 7,000 copies of a book. And realistically, the Kickstarter sold somewhere around 3,500 copies I believe. 

There was another almost a thousand that was there. So it’s like four grand. And then the first month or two after the book was released, it sold another 2,500, 3000 copies. So it is in that range, that 6, 7, 8,000. The reason the book gets to 29,000 copies is because people talk about it. It really is people talking about it on Twitter, on Reddit. Probably a couple of times a week, maybe more I get an alert from all the monitoring that I have set up of someone mentioning it on a podcast again, on Twitter, on Quora, on Reddit, on other platforms. And that’s really what makes a book like this that is self-published and aside from my audience, there is no marketing engine behind it. I guess there’s a few ads on Amazon. You can buy ads there if you have a book or a product you’re selling. 

But realistically, the reason that it’s about to hit 30,000 is very much because of folks like you who read it, who like it, and who share it. And since we’re a bunch of data nerds, I want to give you this breakdown of copies sold by sales channel because a lot of folks who have never written or self-published a book would’ve no idea. So of all the copies of the SaaS Playbook sold 29,000, 35% of those, just over a third have sold through Amazon, and that’s split evenly, almost 50-50 paperback and Kindle. And realize that Kindle sell for 10 bucks and I get $7 from each of those sales. And then the paperback sells for what? 25 and the printing cost is only a few dollars. And then I think they also take 30% of that, so another 7.50. So I think I get maybe $15 per paperback copy sold. 

Next up in terms of sales volume is Audible with 26% of the volume. So keep in mind 35% on Amazon, 26% on Audible. Now Audible is brutal. They’re a monopoly and they keep 75% of each sale. So I get 25% for my audiobook that I wrote, produced, recorded, paid to edit. I own the copyright and they are literally just a marketplace where I’m listing it and they’re taking 75%. People complain about Apple’s 30% cut and nobody’s mentioning Audible’s 75% cut. Audible will only take, only in quotes, 60% if you give them exclusive rights to sell your audiobook. But I sell it directly on SaaSplaybook.com as well so you can have DRM free, MP3s and I also only pay 3% to Stripe. And so if you don’t make it exclusive, then they take 75%, which is again, just never ceases to amaze me, but that is what it is. 

Third in line, Amazon was 35%, Audible was 26, and my Kickstarter was a quarter of the copies, 25%. So I guess at the top of the episode when I said it was only 3, 4,000 copies, it was actually more than that. So you can do the math easily on 25% of 29,000. Next up is 11% have sold directly from SaaSplaybook.com. And if you’re going to buy the electronic version, PDF, EPUB or audio, it helps me out if you go to SaaSplaybook.com. Now, I don’t think of the books as a major revenue stream but it really does make a difference where when I pay Stripe 3% versus paying Audible 75. And finally 1% Apple Books. I question, I think it’s sold 1% of 29,000. So what is that? 250 copies or something? It’s actually less than that. I question if it was even worth the effort to put it up on Apple Books because it did need some specific conversion that I had to pay a designer to do and then posting it, managing it. It’s just kind of an eye roll. 

It’s kind of interesting how little, I guess Kindle just came in and ate their lunch. I guess that makes sense. So top line sales is best as I can estimate, because some of these platforms like Audible make it really difficult to understand how much you’ve actually sold. But top line revenue is just under 400,000, and my best estimate is paid to me as “royalties” or a percentage of the purchase, about 275,000. So again, I haven’t thought traditionally of books as being a revenue source, but obviously that’s a lot. And that’s a year. Yeah, less than a year since it’s been out. It won’t keep doing that every year, but obviously that is not a trivial amount of money. 

And finally, the breakdown across formats is 43% audiobook. That’s between Audible and selling from SaaSplaybook.com. So 43% audio, 29% print, that’s paperback and hardcover. And then 28% just below it, almost 50-50, 28% ebook, which is Kindle, PDF and EPUB. So yeah, some of the learnings here are Amazon, really Amazon and Audible, Amazon owns Audible. I mean they have accounted for 60% of the sales. And obviously some of those are from my audience who bought it once it came out, but realistically, they really have a stranglehold on the book industry. And I understand why now, if I was a publisher why I would be concerned because Amazon can throw their weight around it and they can de-list your book or they can put the rankings down if they don’t like you, or they can pull all types of pricing shenanigans. So that’s one learning. 

Another learning is that if you are going to write a book, obviously having an audience will sell some copies in the early days. And then what leads to recurring sales where every month you’re selling X amount of copies really is having a good book that people want to share. And that’s not something that each of us can snap our finger and make it magically happen, but there is certainly something to be learned about if you’re going to do this, make it really good, don’t half ass this. I see people who hire a ghostwriter to write a book that they pump at the start for a month or two and then it just falls off the face of the earth. And I ask myself, why did you do that? It feels like a huge waste of time. I guess it’s now a resume builder or something to put on LinkedIn or whatever it is. 

But if I were in your shoes, I would certainly give it my best effort to build something that hasn’t been written before and to make it so good that people want to share it. And a little update on my next book. So I know I’ve talked about the SaaS Launchpad a little bit, which is like the precursor to the SaaS Playbook and it’s early stage ideation, validation and all that. I’m putting that book on ice. It was 75, 80% done. And what we decided to do instead is turn it into a course through MicroConf. So there’s going to be a video course coming out called the SaaS Launchpad, and it’s everything that I know about coming up with ideas and validating them and pre-validating them and building a launch list and all that stuff. And it’s like, I don’t know, 26 videos. It’s very intense. We’re in the middle of editing those now and should be launching that in the fall. 

If you’re interested in that, be sure to either sign up for MicroConf.com’s email list or you can obviously go to this podcast website, startupsfortheresofus.com, enter your info there and you’ll get The 5 PM Framework, which is something I’ve talked about here as well as two never-before-released podcast episodes that you can only get by signing up for the Startups For the Rest of Us email list. But I am about to wrap, it’s about two weeks from when I’m recording this and we are basically doing a, I call it a code freeze, it’s a manuscript freeze on my next book, which I’m co-authoring with my wife, Dr. Sherry Walling and it is about the psychology and the mindset of selling your company. And it’s thinking through whether you should, the pros and cons. It’s dealing with a pressure cooker that is the process of selling your company. 

So the before, the during and then the after. I’ve sold, now what? How do I make sure I don’t implode during any of these times? How do I think through the pros and cons of making all these decisions and how do I come out the other side happy and not someone with 5 or 10 million dollars in the bank who is completely miserable? Obviously the content comes from my own experience, my experience counseling and advising founders for years through TinySeed, through MicroConf, and then Sherry’s experience working with hundreds of clients, many of whom have sold or have evaluated selling and have gone through the painful process. And so we have stories and quotes and our own expertise as well. And I hope to be doing some pre-sales for that later this year, maybe November if things work out really well. So stay tuned for more info on that. 

My next topic for today is a quote that I heard from a running coach. So on Netflix, there is a series called Sprint and it follows runners who are going to the Olympics. It’s 100 and 200 meter runners in the U.S. And both Sherry and I ran track. We actually met on the track in college. And so I love the sport, we both do. And Sprint is an awesome… It’s documentary style where they are following them as they go through the trials and the tribulations. And you can lose a race by two hundredths of a second or three hundredths of a second because your start wasn’t as good and you can be at the top of your game and the former Olympic champion and you can get third because you just don’t perform at the peak all the time. Really good show, highly recommended it. Even if you’re not into running, it’s just one of those things about competing and being exceptional and hard work, luck and skill all coming into play. 

But one of the most winningest track coaches of all time had this great quote in an episode and he said, at this level, you don’t teach them how to run fast. You teach them how to run fast better. And I like that as a metaphor because really this coach won’t take folks who don’t have the raw material and the sheer speed to be able to be a world champion or have the potential to be an Olympic champion. And similarly imagine if you are evaluating a founder to invest in them or you’re evaluating a potential team member. In a perfect world, you wouldn’t have to teach them how to do their job. You just want to teach them maybe how to do their job better, if that makes sense. Or have them teach you how they should do their job better at your organization. Because any of us can hire a super junior person, you could hire an intern and train them up, and then you do have to teach them how to run fast. 

And is that okay? Sure it is. But if you’re bootstrapping and you’re hiring your first 10, 15, 20 people and this person doesn’t already know how to do the job and you’re going to train them up from scratch, unless you really, really need to save on budget, that is a case where you are going to spend a lot, lot of time training them unless you have someone on staff who can train them. Again, if you get to 20 people and you have a bunch of senior folks and you hire a junior, yes, one of those senior folks can train them. But if you as a founder are training them on the nuts and bolts of running fast in their role, the basics of customer success, the basics of customer support, if they’re a successful support person, you’re making your job really hard. And this is one of the bigger mistakes that I made in the early days of Drip, is I hired really junior people and it was, I use the excuse that, well, this is all I have money for and I want people to be local. 

And really to be honest, in Fresno, California there weren’t that many people with the experience that I needed. And especially if I was going to be hiring them and they were a senior customer success person or whatever, probably working for a Bay Area company and making a lot of money. And so there just was no budget for it. But realistically it took a tremendous amount of mine and Derek’s time to train these folks up. And it’s like, do I have regrets about it? I don’t think so. But I think if I were to do it differently, I might’ve hired more remote folks or figured out a way. There are just other ways around it. I know that it was a tremendous amount of time investment at the early stages. And look, I actually love mentoring people. I mean, if you take anything away from me and what I do, there’s a reason I put out 52 podcast episodes a year and now 26 YouTube videos a year. 

And I’m writing it seems like a book every 18 months is that I do like teaching people. I like passing on what I know. And so doing that in a startup, it was very fulfilling to me. And so I actually did enjoy it but the problem was had jumped out of an airplane. And like Reid Hoffman said, we were putting the parachute together. We were building it as we were falling to the ground. And in that case, you don’t want to also be teaching the person next to you how to build a parachute. You just don’t really have the time. And so if I were to do it all over again, I would probably try to find people who already knew how to run fast so I could teach them how to run fast better. 

My next topic is having access to information versus the motivation to learn a topic. I think this was a guest on maybe This Week in Startups or it might’ve been the All In Podcast, I am just pretty sure Jason Calacanis was on it. But it was a guest and they were talking about learning to code and how everyone’s going to be able to code because of ChatGPT and developers won’t be needed anymore. And I just don’t believe that’s the case at all. I mean, we’ve seen the same thing with no-code. It’s like you can build some stuff, but we still need developers to build things. And I think for the foreseeable future, when I look out 5 years or 10 years, we will always need builders and makers and I think even beyond that, but of course it’s hard to predict 15, 20 years of what’s going to happen. But the idea here is that learning to code, the hard part used to be it was hard to find information. 

So when I was eight years old, my parents got me an Apple IIe, me and my brother, and there was one book we got with it and it was called How to Speak Basic to My Apple. And I had learned to speak basic to the Apple because I read through that book and it was painful. You typed in the programs, they called them back then and you made syntax errors and you learned from it. And that’s how I learned to code. And if I had lost that book or the book actually got beat up and lost some pages, it was very hard to find other resources to teach you how to code. But now it’s everywhere. It’s all over. I mean, you can go on a YouTube channel or you can go to any of these teaching platforms like Udemy and Skillshare and you can go to boot.dev, you can go anywhere and you can learn to code for free or for a very low cost, really high quality curriculum. 

So why hasn’t everyone learned to code? It’s because it’s not about access to information, it’s about the motivation and desire to learn it. And I’m not saying this to imply that, oh, people who don’t learn to code are somehow lesser or they’re not as smart, it is nothing about that. Or they’re unmotivated, nothing like that. I’m just saying each of us has a proclivity towards doing certain things and my mind has always worked mathematically. I love to read. I love to write. I’ve loved math and programming. And other people, they are built differently and can they learn to code? Of course. But do they really want to if you force them to learn the code? My kids are this great example actually where I’m like, no, learn to code. Really, you should learn to code. And here you can make video games and neither of them want to do it, and they just don’t have the desire or the motivation. 

And we can also say, what about no-code right? Well, no-code you can definitely get more done without grinding. You basically have kind of a prefab house where the walls are all built and the windows are all built and you’re just kind of pushing them in versus when you’re writing code, you’re crafting your own nails and you’re building your own hammer, and then you’re using that to nail in the nails. And when I asked myself, do I think AI is going to make coding so much easier that you don’t have to be motivated to learn? I just don’t think that will happen. I think we will rely on developers who can learn more easily because there’s content out there because AI can teach them. But to maintain the code and to tweak any of the code and to build something really elegant and maintainable, I guess to say that word again, that’s a skill. 

And some folks will want to do that. Some folks will have the motivation and the desire to do that and others will not. So really what I’m saying here is democratization of information or of training across any discipline, whether it’s code or anything else, does not imply that everyone in the world will soon be doing that. And when I hear folks saying it’s usually the hot take on social media, everyone’s going to learn to code. There will be no jobs, no-code’s going to do it. AI’s going to do it, I just don’t buy it. 

My next topic stems around a quote from John Romero who is the co-creator of id Software and co-creator of Doom and Quake, several other games. The best audiobook that you can listen to him or I guess there’s a physical copy of that somewhere I’m sure, there’s dead tree versions is called Masters of Doom, and I would highly recommend it. I think it’s certainly my top five audiobooks of all time and maybe my top three, just an amazing, amazing story. But John Romero also has an autobiography called Doom Guy. And while I like that one less, it’s still cool if you want to dive into the lore. But one quote that John Romero said in chapter 27 of Doom Guy is he said, “I always make my first level last.” I really like the sentiment of that. Basically he learns the aesthetic of the game, the feel of the game over time and it develops. And he wants to put his best foot forward by the time he’s getting towards the end of developing or designing the game, he has that all in his head and he knows what it feels like. 

He knows what the gestalt is, and he can put his best foot forward in that first level. Instead of you imagine building it first and it no longer aligning with things middle of the way down the line. Or you’re kind of rusty, you’re kind of getting the creeks out, and you don’t want that to be your first level because you want the first level to be a banger. And when I heard that, I thought instantly, yeah, this is why we always created our onboarding last when we build SaaS apps is like, I’m going to build the app. What does it need to do? Here are the pages. Even if it’s a very simple MVP or it’s a 1.0. And then we would think, what steps do people need to take to get on board and to get some value? It is a minimum path to awesome within this app. And that’s when we would then go back and architect the onboarding. 

And it’s the same sentiment here is we already knew how everything worked. We knew the gestalt to the product, the core of it, and we wanted to put our best foot forward. We had worked out the kinks and we wanted to put the tour, whatever we were building, kind of a walkthrough, a thing that prodded you to keep going and get your JavaScript installed and get your first email built and all that. And it really made sense once we had a full picture in our heads of the entire layout of what people needed to do. Now, the interesting thing is I was trying to equate this to marketing too, of like, ooh, write your marketing copy last. Build the app, you’re going to launch it, write the headline after that. I think that’s interesting, I think possibly. 

The other thing though that I think is really clever and it’s something I’ve done several times, which is we’re going to launch a product. I’m actually going to write the marketing copy first. I’m going to write the headline. I’m going to write all the features, and I’m going to bake that down into a long-form sales page. And write it first then go build that product. And that product might be code or it might be a MicroConf offering like Mastermind Matching or what have you. Then usually I will come back and revise that marketing copy. So in essence, am I writing the marketing copy last? Maybe not technically, but I’m definitely using the knowledge as I’ve worked the kinks out as I fully understand now the gestalt of the product we’re going to launch and I come back and optimize and refine that marketing and the sales copy. 

Similar to even sales language and sales conversations. If you’re going to be doing demos, obviously you’re going to develop those towards the end of the product development because you have to learn from that. And of course there’s a lot of iteration that has to happen there as well. That’s all we have the time for today. Thank you so much for joining me. If we are not connected on X, Twitter, find me. I’m @Rob Walling. And if you haven’t checked out The SaaS Playbook, head to SaaSplaybook.com. Thanks again for joining me. This is Rob Walling signing off from episode 726.

Rob Walling:
You’re listening to Startups For the Rest of Us. I am your host, Rob Walling, and in this week’s episode, I bring Ruben Gamez back on the show to answer Intermediate and advanced listener questions. I made a call for questions on the show and on X/Twitter a few weeks back and asked for questions that weren’t aimed at beginners, at people validating and pre validating and trying to find ideas, and received great questions about how to think through freemium, when should you start to really, really care about brand, revisiting your sales and marketing funnels, SEO in the age of AI, and I couldn’t think of a better person to bring on the show to hammer through these than Ruben Gamez, founder of SignWell. He’s a super knowledgeable, super successful, bootstrapped, and now mostly bootstrapped founder, and I think this episode turned out great. We dug deep into the questions that we answer today. 

Before we dive in to those questions, I have been hard at work on a video course called the SaaS Launchpad. It’s everything I know today about the early stages. So in contrast to the listener questions we’re going to answer today, this is about coming up with ideas, how to pre validate, how to validate, how to build a launch list, and all types of things that you’ll experience in the early stage. And this video course is going to go live here in the next couple of months, but if you want to get on the list and be the first to hear about it, as well as receive a bonus if you buy the course early, you can head to SaaSLaunchpad.co. 

I’m actually really stoked about this course, it’s everything I know about how to get those things done. And I’ve teased on the podcast a few times that I have a mostly written book on this topic, and basically have sidelined that. And I took all that content and turned it into this video course where I felt it is much more easily consumed and I think it will be more effective for folks. So SaaSLaunchpad.co, if you’re interested. And with that, let’s dive into listener questions. 

Ruben Gamez, welcome back to the show.  

Ruben Gamez:
Thanks for inviting me.  

Rob Walling:
Always great to have you, man. Really good listener questions today. I keep calling them … I’m trying to figure out the name. These are intermediate or later stage questions, because it’s not about idea validation and building an MVP. And the reason I wanted to have you on is there’s a bunch of questions I feel like are right in your wheelhouse, things like freemium, SEO. I don’t know, there’s a few others, so it’s a really good docket today. And our first question is from MicroConf attendee and man about Twitter, Val Sopi.  

Val Sopi:
Hey, Rob. Val Sopi here, founder of Blogstatic. Thanks so much for everything you do for us bootstrappers with your podcast, the MicroConf Conference, and now TinySeed. My question is about freemiums, as Blogstatic is a B2P product and I’m looking for ways to grow faster. After listening to episode 717 with Marie Martens of Tally and how they’ve succeeded with their freemium approach, I started to think about how freemium could work for Blogstatic. 

My biggest concern is fighting spam, as Blogstatic is a front-facing app and not something companies use internally. This means I have to comply with my hosting provider’s rules and having content on my service that doesn’t comply could get me in trouble. Yes, I can use AI, but I currently don’t have the time to re-engineer the sign-up flow as I’m fully focused on sales and outreach. 

The goal is to have a generous free plan, so it’s not just a gimmick, with premium features requiring an upgrade. By now I know which features trigger an upgrade, so I think I can create a useful free plan that doesn’t hinder growth. The purpose of this would not be to convert more free users, as they don’t convert as much, but to use the freemium model so more people talk about Blogstatic and it becomes known as the go-to solution for blogs. 

With all that said, my specific question is this, should I do it? And if so, what’s the best way to tackle this? The only way it would make sense is if it helps Blogstatic grow 10X from here, which means $200,000 ARR. Otherwise, it would be an added burden for me and the business. And when I say 10X growth, I don’t mean the freemium alone doing that, but hoping at least it would assist the other outreach efforts I’m currently undertaking such as social, SEO, paid ads, and direct outreach. 

It’s worth mentioning that Blogstatic is already a super low cost product starting at $19 per year, with a fully featured plan at $49 per year, which most customers buy. At the time of this recording, there are 430 active paid accounts bringing about $20,000 in ARR almost two years in come October. Year-over-year growth is at 200%. Visits to trial are 10%, and trial to pay are whopping 26%. Year-over-year retention is not that great at only 56%. Thanks again, Rob, and I look forward to hearing your thoughts on this.  

Rob Walling:
For those listening, Blogstatic is everything you need to run a professional blog, no code, fully customizable, SEO ready, this is his H1 and H2 obviously fast loading, fully featured, and as he said in the voicemail, it is a very low-priced tool. What do you think?  

Ruben Gamez:
I think we mostly think about this in the same way. Usually if you’re bootstrapping, it’s a tough way to go. I almost default to no freemium unless there’s an opportunity here. So I think … I was recently talking to a friend about this. There’s a side to where your business needs to be the right type of business where freemium can work, and the space, and we’ve talked a little bit about this before, to where if you have a high support app or a high cost app to serve customers, then it’s going to be really tough to do freemium. 

If you have an app to where it has some viral component or not even that, beyond that, if people using it in some way, shape or form make it better or easier for you to convert other people, whether they expose other people to the product or they create content and that content can get you more traffic or whatever it is, there’s something there that Brian Balfour talks a lot about growth loops, it creates a growth loop there. Then that has potential. It has to be big enough, the space needs to be usually big enough, if you’re doing true freemium. 

One of the things that I think a lot of people overlook when it comes to evaluating freemium is whether there’s an opportunity in the space for it. Meaning if everyone in the space or a lot of people in the space are offering freemium already and you’re just going to be one of those, then what makes yours different? What makes yours special? Why are people going to talk about it or promote it or anything, especially if you’re new coming in. So I think that’s one of the underrated things that people don’t look at. If no one is offering freemium and then you see at the low end there’s an opportunity there and there’s some sort of almost demand, then that’s potential, I think, in that situation. 

The other thing is not just creating freemium, you have to promote it too. You have to do something. It’s not just create the free plan and then you put it out there and that’s it, you’re done. It’s not going to get picked up because of it, just because you have something that’s free. So there are multiple things in here that I’d take a look at.  

Rob Walling:
Cool. So you’ve set the stage of freemium, and what I like is you have these criteria and it’s like if most or all of these are not present, it’s probably not worth it. Like you said, you default, I know, with bootstrappers because freemium kicks revenue down the line, and when you’re bootstrapping, revenue is just so critical because you need it to survive, you need it to market. If you had buckets of money in the bank, you raise half a million, $5 million, whatever, you can kick revenue down the line because you have that bucket of money. But when you’re bootstrapping, it’s riskier. 

And I like that you pointed out it’s not just “Go freemium,” and it just markets itself. Even we were talking about how Marie from Tally was on the show a couple of months ago, and how they had a free plan, but she sent thousands of DMs, cold DMs and warm DMs to get people to use it. How did you … I guess your freemium with SignWell, the marketing of it is the SEO engine you’ve built.  

Ruben Gamez:
Yeah, that’s a big part of it, but we’ve also been deliberate with certain segments that we have to where we’ve actually gone into communities and promoted the freemium plan and actually in some cases given a different version of the free plan to where we’re giving away more because we know it works in those communities and it just helps overall. 

So you have to be deliberate about it, you can also just run the math and know, okay, if you’re planning on saying that, “Because we have this powered buy or we have some other thing that’s going to expose people to our product and that’ll help create some of the word of mouth, some visits that will eventually convert,” things like that, then you could just run the math and see, “How many of these websites do we need? How many of those pages need to be out there?” and then “What, roughly speaking, will be the conversion rate? And then from those, how many of those will be free?” And you start to see that you need really big numbers, a lot of times, to make freemium work. It gets tricky in that when you just run the math.  

Rob Walling:
Absolutely. And you have big numbers, Tally had big numbers. It was 100 … I forget. It was a lot. And then the conversion rate was low. And same with Dropbox. Anybody who’s ever talked about this, it’s like 2% every year convert to paid and 3% … It’s some number I typically hear in that range, I’m sure it can be higher or lower. 

But something that Val’s asking about is he’s saying, “I’m not really looking to convert the free users. I’m trying to do this so word spreads so that more people talk about it so that it becomes the de facto.” I’m not sure how I feel about that. What do you think about it?  

Ruben Gamez:
So we did a little bit of that. I’m okay with that approach as long as you understand what you’re looking for. So you can’t say, “Well, in a year we’ll know whether this is working or not.” That’s just way too long. But there are things, especially a lot of times people just look at MRR or the number of people who converted to a paid plan or whatever, something that’s more of almost a lagging indicator in a lot of ways. And you can look at things that are early predictors of whether this is working. 

So one of the things that we looked at a lot the earlier days, for freemium, was our branded searches, “Are those increasing?” And even basics. The basics of, “Are people using the free plan?” If they’re not using the free plan, then it doesn’t matter how many sign-ups you’re getting, if the usage on it is low, if the repeat usage on it is low, then it’s probably not going to work. If you’re seeing … Even if you just have a form, on your sign-up form, if you have a field that says, “How did you hear about us?” and you start to collect a little bit of that and you’re like, “Oh, okay, we’re starting to see it pick up.” 

So something that I saw a long time ago that I really liked from Sean Ellis back in the day, remember when he bought KISS Insights from Heaton? And he renamed it Qualaroo. And it was already freemium, and I had a conversation with Sean at the time because we were from time to time talking about freemium, and he told me that he didn’t think the freemium was aggressive enough, so he wanted to test that. So then he took three months, and I really liked his approach. He said, “The next three months, I’m just going to open it up heavy.” He did that and then he just looked at not the conversion numbers or anything, but at other signals that told him that this is starting to work. Not that it worked, but, “This is actually starting to have the impact that I think.” And he didn’t see the impact that he wanted, and then after three months, he just went the other way. He stopped freemium completely and raised prices, just as I said, the other direction.  

Rob Walling:
I like what you’re saying here, which is, “Hey, you can’t wait a year to see if it’s going to work. You have to have these early signals, and do you know what signals you’re looking for?” Right?  

Ruben Gamez:
Exactly.  

Rob Walling:
And in Val’s case, I think something that’s … I’m a little worried about, is he said, “My goal is to have a generous free plan so it’s not just a gimmick, where any premium features require an upgrade.” So how much is this going to cannibalize … His existing revenue is not a ton. I think he said it’s $20,000 ARR, but if that cuts your MRR in half, this is what we’re talking about, it’s a struggle, with bootstrapping, if you need that revenue. 

What do you think? Separate from freemium, I don’t know, Val. Val and I, I met him at MicroConf Europe in Lisbon, so I feel like I’m talking to him directly, but what do you think of him just 5X-ing his pricing? Because right now it’s $20 a year, $50 a year, $100 a year. And I want to see $100, $250 and $500, or even $100, $500 and $1000, and just figuring out what you have to add to make that work. Just make the pricing change, see what happens to the business. Doesn’t sound like it’s growing like wildfire as it is. I know Val’s working on it, but will anyone sign up? 

If it cuts it to zero for a month or for two weeks, it’s like, “Okay, I did the experiment,” but then also, “What can I build to make this worth it?” And what other options are people using? Do I have to be this cheap because it’s a commodity space and there’s a bunch of other options and I really need some differentiator? But I almost personally … if he wants to kickstart growth, I think of going in that direction rather than freemium. What do you think?  

Ruben Gamez:
Right. If we’re talking about speeding up how quickly he’s growing, then we just know that companies that basically charge more money tend to grow the fastest. And you’ve mentioned this about TinySeed companies and the patterns that we’ve seen in the recent survey about SaaS as well, and just from founders that I know, the ones that charge more tend to grow much faster. So I do like that. But I think you’re right. It’s really easy just to say, “Well just raise prices,” and sometimes that works because so many founders under-price. But if you entered the market as a certain type of product and cost savings is a big part of it, or it being cheaper, it might not be that straightforward to just raise prices because we have a little bit of this problem as far as if we decided to kill freemium and raise our prices, there are a lot of references over on the internet and a lot of different places that basically push us as a really great free e-sign tool, a good alternative at 20% the price of DocuSign or whatever. 

So if we were to do that with SignWell, we’d have to account for that and have a strategy for it. I like how you paired, yes, raising prices, but also changing the product, maybe changing some of the positioning and accounting for some of that stuff, like the expectations of the existing traffic that you have coming in. And it’s easy to say, “Well, the price increases didn’t work,” and it might just be because the people who are coming into your website are expecting something and you’re not matching up with that. And that doesn’t mean you shouldn’t do it. It just means that if you’re going to do it, you’re also going to want to have a way to bring in the people that have the right types of expectation on the pricing side.  

Rob Walling:
Yeah, I think that makes a lot of sense. So to answer his ultimate question, if you were in his shoes, would you try freemium the way he’s proposing it?  

Ruben Gamez:
I would look to see if there was opportunity to feed the freemium engine. If I saw an opportunity and a way to get big numbers, then I would experiment three or six months like Sean did, and really look for some of those signals and then be decisive. If I’m not liking what I’m seeing, shut that down and then go in the other direction that we were just talking about and know that yes, if we position our product to where people that are coming in are expecting really low-priced products, then I’ll raise prices, but it’s also probably going to take time to correct that.  

Rob Walling:
And you were saying if there was a big volume of potential top of funnel, typically SEO, right?  

Ruben Gamez:
Right. Yep.  

Rob Walling:
You heard it here first, folks. That is Ruben’s recommendation for Val Sopi. So I think if you were to ask me, because you just know so much more about freemium than I do, having been doing it for the past several years. I have secondhand exposure to it through you and other TinySeed companies that do it, and other TinySeed companies that have shut it down because it’s not working or have had to adjust it. And my gut … I think I already made my recommendation. If I were in his shoes, I would do the price increase. And as you said, it comes with positioning. There’s a bunch of stuff that comes with that. It’s not just as simple as, “Oh, raise your prices,” and it fixes it magically. But that would be my own personal leaning. So thanks for that question, Val. Hope it was helpful. 

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Next question is from Josh Ho, he’s jlogic on Twitter/X. And I had asked a question. This is … I have a couple dozen really good mid-level, more advanced questions. And Josh responded to that and he says, “When do you start to really, really, really care about brand?” And I like this question because 12, 15 years ago, I would’ve said, “If I’m doing SaaS, I don’t really need to worry about brand because I build a tool that gets in the way of traffic of people who need the tool. And if the tool does the thing they need, like the long tail keyword tool or the invoicing tool or whatever, I have SEO, I have ads, I have whatever else, and that’s it. No one’s buying it because of my brand.” 

That was when I was a young wide-eyed early stage … it was someone who had a bunch of little six-figure businesses, some five-figure, and I didn’t really need brand. And then I started realizing, “Oh, Startups For the Rest of Us is a brand, MicroConf is a brand, Drip became a brand, TinySeed obviously is a brand. There’s the books, SaaS Playbook becomes a brand.” And I realized the power of that. And branding always turned me off because every book you read about branding, every example, it’s Colgate toothpaste and it’s Intuit. And I was just like, “Well, I’m not that. I don’t give a (beep) about this.” 

But what I’ve realized is that, even people in our space, is the bootstrappers that get to that, I don’t know where, sometimes it’s mid to high six-figures, sometimes it’s at low millions or whatever. But you do start to get a concept you introduced me to where Jason Lemkin calls it a mini brand, where you’re not a brand like Target or Colgate, I guess, but people know your name and people are talking about you on the internet, on Reddit, on Quora, in private Slack groups. 

And the moment that your product is being referenced by name, that’s when you start having a brand, because what are they saying about you? That is your brand. I like to think of brand being what people say about you when you’re not in the room. And by you, I mean your product. Like you were saying earlier, SignWell, in some forums, in certain spaces, it’s, “Oh, it’s a really great alternative and it’s a fifth of the price.” Well, that’s part of the brand. And whether you controlled that and did it intentionally or not, that just becomes part of the brand. 

So with that preamble, what are your thoughts on when should you really, really, really start caring about brand?  

Ruben Gamez:
Yeah, this super interesting topic, I think a lot of it depends on how you interpret the question and how you even interpret brand, really. I would normally … in the way that a lot of people talk about brand and interpreting the question to mean, “When do you spend a significant amount of money, time, energy on things that are not meant to directly convert customers?” I would in the past, a lot of times just say, “When you have no idea on how to spend your money.” More of a hot take, when you don’t know what you’re doing.  

Rob Walling:
Zing.  

Ruben Gamez:
Yeah. I like the examples that you brought up with TinySeed and MicroConf and things like that. I think those are way more practical, and I would really ask you, because I think of these as very significant brands, the brands in the spaces in which they’re operating in, but you didn’t do this with VC funding or anything like that. So from a very practical point of view, how much time, energy, and money did you spend on activities that had to do with the brand versus other things that got you in front of audiences, got you customers or the people that you were intending to get?  

Rob Walling:
It’s an interesting question because since it’s not SaaS … If I was running a SaaS company, you are focused on generating leads, closing deals, marketing funnels, and this and that. So the majority of your time, for me, it was always product or marketing, sales. MicroConf is a brand because we have 724 episodes of this podcast. And if you say, “Oh, it only took me an hour per episode,” so that’s 724 hours over the last 10 years. It’s been a lot more than that. I think it’s like building the audience built the brand, and this is what I recommend people don’t do. If you’re going to build a SaaS company, don’t build an audience, build your network and build marketing channels, not a brand.  

Ruben Gamez:
In a very similar way, I’ve talked about it before as far as brand, you build the brand as you build the business, as you build your customer base, as you get your email list and all this stuff, your brand is built. But that’s a very different thing than what some people refer to or think about when they’re thinking about investing in the brand.  

Rob Walling:
Like hiring an expensive designer and redoing the positioning and the copy and-  

Ruben Gamez:
And spending a whole bunch of time on that sort of thing.  

Rob Walling:
… media company, “I’m going to start a YouTube channel and a podcast because that’s what brands do,” that type of stuff? That’s not a good use of your time in the early days, there’s no chance. So I like what you just said. You build the business and the business builds the brand, and that is exactly what happened with MicroConf and with Drip and, well, TinySeed was able to piggyback on my existing brands, but think about each of these. MicroConf, the entire focus … MicroConf was just a landing page. Take a step back. You said earlier, is it brand building or is it direct response in it, direct conversion? Those are the two types of marketing most people throw around. 

MicroConf started as a landing page. I have a screenshot of this black background. Dark mode before dark mode was a thing, because it was 14 years ago, and it had some headshots of Heaton Shaw and Noah Kagan and myself and Mike Tabor, and it was an email capture form. And it said, “Come to this play in Vegas on this date,” that’s all it was. It was direct response. And then we tried to sell tickets to that email list and tried to sell enough tickets that we could then afford to pay for the venue. There was no brand building and in fact there was no logo. The MicroConf was some font and we just typed “Microconf” on a thing. 

We sold tickets to the event first. To me, that’s building the business. We ran an event, we showed up, we executed, we operated. None of that was brand building. You know what built the brand the most? Was running a really (bleep) good event. And we got lucky with that. We didn’t know what we were doing, but we just put … You remember. You remember how stressed I was, and I was putting … I was like, “This has to be the best event I’ve ever attended.” So I was stressed about it and it turns out it was a really good event. And I think that alone, that created word of mouth and that created the brand of, “Oh, Microconf is a new thing and it’s different than anything else.” 

So what does that mean for SaaS founders? What does that mean for them?  

Ruben Gamez:
Yeah. Well, I think there are a couple of times when you start to invest more in things that are less related to directly building the business and directly converting customers and things like that. And you might spend in areas to where it’s thought of as brand building or enhancing the brand or whatever. If you’re in a really commoditized space and brand is how you get customers, that is it. Or as you get more and more established with the brand, you went back and you redesigned things and all … Right? Once-  

Rob Walling:
Oh, yeah. Like MicroConf, all that stuff. But that was when we were doing almost a million dollars in revenue through the business and had tens of thousands of people on an email list. And to your point, we built the business and then went back and designed a logo. The videographer every year would say, “Oh, can you send me your logo so I can put it in the videos?” And we were like, “We don’t have a logo.” It is weird in retrospect. I probably should have gotten a logo design before-  

Ruben Gamez:
A little bit earlier than that?  

Rob Walling:
Six years, seven years in. But to our point, you can build a business. We didn’t spend time building Drip’s brand. We didn’t spend time. We had a Derek who’s a full stack developer who designed the first logo, and I did hire a designer to put the colors together, but it was nothing … It was just, “Let’s make it look neat. Let’s make it look nice and attractive and make the UX great.” And my whole goal was to get people into it because I guess reinforcing once again that … What I found is the more customers we had, the wider our brand got by default. Because again, I define it as, “Hey, people talking about you when you’re not in the room.” That’s not the definitive version of brand, but it’s a big part of it, I think. And the more people who used it who said, “Oh, this is so much better than the other tools,” “Oh and it’s less expensive and it’s better? Whoa!” That became part of the brand. 

Is that how you think about it too with SignWell? Because obviously you have tens of thousands of users.  

Ruben Gamez:
Yes, that’s exactly how I think about it. Building the brand is just getting known in a space, and the amount of time that we put into the brand is not that much, really. It’s really mostly because there’s just so much room. If you’re in a space where you have a lot of room to grow still in the market, there’s so many other things that we could spend that time, money, and energy on than brand, still. And I think a lot of SaaS products are in that space. 

Even Josh, he’s got a significant business, he’s super sharp, he’s in a space to where he’s at a good level of revenue and growth and all that, but there’s probably still a lot of space ahead of them to go. So the thing that we do, it’s always about, how are we best going to use the resources that we have, the money, time and energy? And mostly for most companies, it just makes more sense to invest on growing the business and building the brand that way, I feel like.  

Rob Walling:
I would agree, especially with SaaS. I can make not even a counter argument, but an auxiliary to that, of, but if you’re building a conference or a creator-type business where you’re creating video and you’re more, “We really are information marketer,” and you are more of a Rob Walling or a MicroConf or a TinySeed, none of those are SaaS companies, I would say the brand can be important. I think it’s more important, probably, for those, because people have to know and trust you to buy in, but SaaS is a tool solving a problem. And yes, brand can have an impact on that, but as you said, where do you rank that in terms of priority? And usually it’s going to be pretty low for me until I really feel the need. I think people use it as an excuse to start a “media company,” because brand is fun. I like printing T-shirts with my logo and witty slogans, and I want to be … It’s fun, but that doesn’t move the needle.  

Ruben Gamez:
And it’s not measurable, it’s not a lot of times. So it’s easy for people to spend time there and effort and just be like, “Oh, I’m doing something, you can’t measure everything.” They tend to have this attitude of, “It’s all or nothing,” but it’s not really all or nothing. And just because you’re building the business doesn’t mean you’re completely ignoring the brand, right?  

Rob Walling:
Right. And that’s the thing. And I’m the person who, the moment I start a new thing, I print T-shirts with logos on them, but I will 100% say to anyone I’m talking to, “This is not the best use of this energy right now, but it’s a luxury that I have and a thing I want to do”. And to me it’s like eating ice cream, and I’m going to eat ice cream sometimes. It is not necessarily that … I should eat spinach all the time, but sometimes I’m going to eat ice cream. To me, some branding is really fun for me. And I do remember, I will say when we launched TinySeed, the first website, not … there was a landing page that I threw together in a couple of weeks, but the first website, I invested some money into it because I wanted it to be really, really sharp. I want it to look really good and feel very professional and right in line. 

Now is your visual identity your brand? No, but it is a component of that. It’s a component of how people view it. Anything I would launch these days, I would want to look really, really good. And again, it’s not identical with brand, but the brand of the SaaS Playbook, the yellow cover with that design, it stands out. So I don’t want people to listen to this thinking that you and I don’t care about brand or think brand is unimportant because we both know that it is, but it’s that caution of, “Don’t get too stuck in it. Don’t do it too early.” It’s not the best use of most entrepreneurs’ time. So thanks for that question, Josh. Hope it was helpful. 

Next question is from Lane at Boot.dev. He is wagslane on X/Twitter. He says, “Which parts of your sales and marketing funnels do you revisit most often, and on what frequencies? For example, only myself and one other team member work on marketing stuff and we can only get around to landing pages, drip campaigns, onboarding, sequence copy, et cetera, every so often.” How do you think about this?  

Ruben Gamez:
So I guess I think about it in a different way. If I’m thinking about growth, I don’t tend to think about, “Okay, what are the parts of my sales funnels and marketing funnels, and is it time to revisit those?” I think about it more in terms of, “What type of growth are we looking to get? What are the bottlenecks? Where are the opportunities for that growth?” and then focus in those areas. So that could mean that there are certain parts of funnel that we just don’t look at very often or almost ever, because they’re not the bottleneck, they’re working really well in other areas. Again, it’s really about efficiently using the limited time and money that we have. And usually that means just going after the biggest opportunities and focusing there.  

Rob Walling:
I think of it the same way you do. I remember I would launch … We’re going to launch SaaS app and I’m like, “I’m going to do some stuff manually and then I know I need at least an email sequence for onboarding and I need a landing page and some copy,” and I would just crank out in a day all of that stuff. And it was very much V0.9. It was not great, but it was 75% of what it needed to be, and we would launch with that. Then I would at some point make the time to circle back. I would either see conversions were really low or I would see a flag in my funnel where I’m like, “I’m off here, so what’s happening?” And I would go back and I’d reinvest in it. But then I remember leaving the onboarding sequence alone for a year or 18 months, the email onboarding, and I’m sure it could … needed an update. I’m sure it was crafty by the time I got back to it, but it wasn’t the most pressing thing. It wasn’t a bottleneck. 

And conversion from onboarding and trial to paid were also high for us, that I just didn’t circle back to it even though it wasn’t the best and it got outdated and all this. So I think you and I think about it the same way where I’m trying to do the most pressing thing and rather than it being, “Oh, in a perfect world every three months I would revisit all this stuff and I would optimize it.” I don’t know that that’s the best way to do it, or at least in the way I work on things. I’m always thinking, “What’s the biggest bottleneck? What’s the most broken or will provide the most results?” And sometimes that’s revamping an old thing and sometimes it’s doing a new thing. Often it feels like it’s doing a new thing if I think it can work.  

Ruben Gamez:
Yeah. Especially the earlier you are, and the more you have to increase numbers, usually it’s not about optimizing existing things, it’s about just getting more into the funnel and often that means doing new stuff.  

Rob Walling:
So thanks for that question, Lane. I feel pretty good about that answer. We’ll move on to the next question from Anders.  

Anders:
Hi, Rob. My name is Anders and I’m the co-founder of ShopLevers, a data analysis and aggregation tool for business coaches who work with auto repair shop owners. Until now, we’ve grown primarily through outbound efforts and word of mouth. We are looking to expand our offering beyond coaches and sell directly to shop owners. As that market is much larger, I’ve thought about basing the top of my funnel around SEO and content. I don’t have much experience in digital marketing and I found myself hesitant to get started. It seems like AI could be changing the playbook that has worked well for others. Am I overthinking this? Do you foresee a moment in the not too distant future where people abandon their search habits? Are you adjusting any of your own marketing strategies for this new reality? Thanks for all you do, listening to your podcast is a highlight of my week.  

Rob Walling:
So this is another question where I really wanted to get your take on it. How are you thinking about it? Because you are one of the founders in the world I know who knows the most about SEO and who also has a lot to lose if SEO goes away, because it’s such a big component of SignWell’s success. So how are you thinking about this?  

Ruben Gamez:
It’s funny, I don’t think we’ve ever really talked about it, so I’m interested to hear your take as well. So I think in the near term future, yeah, it’s worth doing. SEO takes time, so it’ll take a few months, but I don’t see this going away in a few months, so there’s no real danger there. 

I think there was something that I saw recently on Twitter, this founder of an SEO agency that … I think Will Reynolds is his name. And he talked about … he said something like, he won’t write content nowadays. He won’t write content. And I think this is a little extreme, but the thinking is interesting and I think it’s in the right direction in some cases as far as where to put your time and energy when it comes to SEO and how to think about the future. 

It’s going to have an impact, it already is starting to have an impact, but the way that he put it was, if AI can write it, he won’t write it, basically is what he said. Which is, if you think about that, there are already a lot of things that you could just type in, “Write me this,” into an AI and it can create an article that just … the feel might be a little bit like, “Oh, this is written by AI,” in some cases or whatever, but it’s essentially the same information. It’s very close to what a lot of people are already putting out there. 

So if that’s the majority of your content, or somebody else, Ian Howells as well, he does a lot of stuff in the SEO space, Traffic Think Tank, he’s one of the founders there. I like the way that he’s put it in the past and it’s just more of the same, which is, if you can just hire writers, like an agency, like a generic writer, an SEO writer, a writer to create and just list out a bunch of topics and then have them without knowing anything about your space or without knowing anything about your business, just create those articles, shoot them out really quick, then you don’t really have anything that’s defensible or really that valuable there. 

The more you can move away from just content like that and tools, that’s why engineering as marketing, you still have to promote it, you still have to build tools, but things that people are searching for that are not just basic, especially “How to this,” or whatever, more and more of that stuff’s going to be answered by AI. It doesn’t mean you shouldn’t do it initially, just know maybe you invest less time on that sort of stuff if there’s an opportunity there and you can rank and you can get traffic in the near future, but then devote more of your time towards other more unique content or tools or resources.  

Rob Walling:
Yeah. I like that advice a lot. And I agree with you. In the near term, AI is not going to kill SEO, but if we look out years, is it going to have a major impact? It’s obviously going to have an impact. 

There’s another potential impact of AI on SEO, and it’s the thought that Google, when you go type a search term into it now, above the fold is an AI answer. There are not 10 blue links anymore. It’s a big wall of text for most things, then it’s all you’re sponsored … your AdWords, and then it’s organic. And I wonder if Anders is not referencing that, of, what if all the 10 blue links, what if you went to Google homepage and you type in a search and all it is an AI answer? There are no 10 blue links anymore, they’re completely gone.  

Ruben Gamez:
I think for some terms, it’s already … there are few terms that are basically like that already.  

Rob Walling:
So what does that do, then? So how do you survive in that case if you’re so reliant on being one of those links that people click through? My impression was that, how does Google create the answers? Well, they do it by scanning the top 10 blue links, probably. They do the whole internet, but you get the idea, and they’re giving answers from that material, but then you don’t get the click through. So is it stealing clicks from your site that could potentially convert? What do you think about it?  

Ruben Gamez:
I think this has already been going on. Really, they’ve had that. It wasn’t AI, but they’ve basically given you the answers, and they had-  

Rob Walling:
The zero click box at the top, right?  

Ruben Gamez:
Right. So for some content, that game’s been over for a while, for certain types of content. More and more, there are just a higher percentage of zero click searches that have been happening. 

But there are other types of content where that’s not enough. Just going back to where you focus your time, and I’m going to focus more of my time on those types of things. And that’s if we’re talking about things that people are searching for. So you still have paid, you can do AdWords still, and they need to make money. So in the short term, at least in the next couple of years, I don’t think they’re going to just instantly … they need a replacement for that. In some way, shape or form, they’re making a ton of money off of a lot of companies and people, and what would they be as a business if they just got rid of that? They give that ability for people to get in front of searchers by paying.  

Rob Walling:
Right, 78% of Google’s revenue is AdWords. That’s the whole company, basically. To your point that they’ll … So you were saying that SEO is going to change, but people will still search for stuff. This is what I was saying the other day. They’ll still search, so there’s still ads. You know what else? People are also going to search … they’re either going to search on Reddit or get redirected to Reddit. They’re going to search on Quora if that’s even still a thing. I always mention it, but it’s less important these days. They’re going to search in whatever private Slack groups, so that’s where word of mouth is a little more important. They’re going to find stuff in Stack Overflow or Stack Exchange type sites. 

It’s spreading, it’s getting towards maybe not so concentrated in Google. I know that when I search a lot of stuff that I search, the top result are Reddit threads, especially when I’m looking for … if I’m not using AI and I’m looking for answers around any type of hobby thing that I do, like tabletop games, Dungeons & Dragons, playing the guitar and that kind of stuff, Reddit’s up there. And there are Reddit ads and there are … whatever, there’s a bunch of approaches. 

So I think that piggybacks maybe on what you’re saying in that SEO is going to change, but there are still … it’s not like it’s going to go away overnight and AdWords, specifically, is still going to be around for quite some time and that there are other options there for you.  

Ruben Gamez:
Yeah. And showing up in those places, finding a way to show up in all those places that you mentioned is a good approach. Even if you’re creating … a lot of people treat SEO as like, “I have to create all the content myself, and I have to rank that content.” But a lot of times you get really good results by showing up in content, in places, communities, forums, other articles, whatever, that you didn’t create. And I think the more you can do that, the more likely it is also that you’ll show up in some of the AI-written answers because they’re picking it up from more references they see. You’re obviously meaningful in some way, so you’re worth mentioning as well.  

Rob Walling:
Right. If I would’ve typed, “Best email marketing tool for realtors,” and there’s probably going to be a bunch of top 5, top 10, top 20 posts, or it’ll be a Reddit thread or a Quora thread of what’s the best. And it’s like, “Well, how do I get in those?” That’s exactly what I was going to say, was AI is scraping those and using them for answers. So if you go to ChatGPT or Google’s equivalent, is it Gemini? Is that what Google’s-  

Ruben Gamez:
Gemini, yep.  

Rob Walling:
… AI thing is? And Baird is someone else’s? I haven’t kept up-  

Ruben Gamez:
Plexity, just the other day I looked up and in the last 30 days, we’ve gotten … not a ton, it was 40 or something like that, unique visitors from Perplexity, which was interesting.  

Rob Walling:
So that’s it, it’s what we’re saying. It’s crawling those, and then if I go into ChatGPT or any of these tools and say, “What is the best email service provider for realtors?” that’s where they’re getting the info. So it’s changing, and that means for incumbents who are getting a lot of traffic from it, they might see their business slowly get squeezed out. And for upstarts, there’s probably opportunity here because it’s shifting. When you have this type of paradigm shift, this is when you can figure out, you can be at the bleeding edge of it, of, “Well, how do you get mentioned in all these AI answers?”  

Ruben Gamez:
Yeah. I think it’s also harder to make SEO, and this game has also been over for a little while, making it the only way in which you grow your business. Not just your primary, it should be thought of more as supplementary. So in the affiliate space, they’re freaking out right now because a lot of sites have been hit and are doing poorly because they don’t really have a business model. There are no products. So it’s funny in a way, they’re going about it almost in the reverse way. They’re like, “Okay, now we have these sites that are content, they’re getting traffic. We need a product on here so that Google likes it so that it’s not just a content site or whatever.” 

So they’re trying to come up with products, but in what we do inherently, we sell products, and we have content tools or resources or whatever that help us get traffic. So we already have that problem solved, but it speaks to just that thinking about, it’s more of a supplementary thing and it’s not a bad idea to diversify a little bit. Not a ton, because in reality it’s going to be one channel or two channels that are going to work really best for you, and you can’t spread yourself out too thin. But it does pay to invest some time and money into something else and experiment with other stuff.  

Rob Walling:
So thanks for that question, Anders. I hope our answer was helpful. Ruben Gamez, it is always the utmost of pleasure to have you here on the show. If folks want to keep up with you on X/Twitter, you are earthlingworks, and of course SignWell if they want to use the best electronic signature app on the internet. Thanks again for joining me, man.  

Ruben Gamez:
Thank you.  

Rob Walling:
Thanks again to Ruben for joining me on the show today. I hope you enjoyed this episode. If you have a beginner, an intermediate, or an advanced question for me or for a guest, send it in to questions@startupsfortherestofus.com, or click Ask a Question at the top of our website. Thank you for joining me this week and every week. This is Rob Walling signing off from episode 725.