Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike make their goals for 2017. In addition to setting their new goals, they also talk about last year’s goals and how they did.
Items mentioned in this episode:
Transcript
Mike [00:00]: In this episode of ‘Startups for the Rest of Us,’ Rob and I are going to be talking about our goals for 2017. This is ‘Startups for the Rest of Us’ episode 318. Welcome to ‘Startups for the Rest of Us,’ the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products whether you’ve built your first product or you’re just thinking about it. I’m Mike.
Rob [00:25]: And I’m Rob.
Mike [00:26]: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Rob?
Rob [00:30]: The word is iTunes reviews. We have 510 worldwide reviews. A recent review is from a username that’s a lot of numbers and letters so I’m not going to pronounce it. But it’s just from a couple days ago. It says, “Great information but why do they talk so fast? Their podcast sounds like it’s being played at 2x speed and it’s annoying.” What do you think, Mike?
Mike [00:49]: I don’t know. I always play it at 2x speed anyways, so.
Rob [00:49]: I’m the one that talks fast. So here’s the thing. I actually do listen to it at 2x speed. We don’t speed the podcast up at all. I think maybe I just talk too fast. Because I don’t feel like you talk nearly as fast as I do.
Mike [01:02]: Yeah probably. It’s weird but I’ll talk to people whose podcasts I listen to and I have listened to their podcasts on 2x speed so when I talk to them I naturally expect it to be at 2x speed.
Rob [01:12]: Oh, I totally agree. So anyways, we love reviews. We don’t love it when you call us annoying. But we would appreciate if you could log into iTunes, click five stars. You don’t actually need to leave feedback or sentences or type anything. Just hitting that five star would be super helpful for us. Keeps us motivated to keep going and helps us get found in iTunes. On another note – quick Drip update – we’re hiring another person to help with – is such a task. It’s really our first non-developer hire. We’re hire someone to help with deliverability and kind of compliance and a bunch of internal stuff that’s currently spread – like I do some of it and Derek does some of it and our support team handles some of it. And it’ll be nice to be able to get that under one roof. So I think we have our number one candidate all chosen and should get that going here within the next couple weeks. How about you? Do you have any updates?
Mike [01:57]: Well, I got an email from Tyler Tringas, who reached out to me because there was a podcast episode we did a few weeks ago where we talked about some of the different books that were out there in the bootstrapped area. And he said it sounded like we were having trouble coming up with books that were kind of written in that space. And he’s got one that he wrote called ‘The Micro-SaaS eBook.’ And it’s actually being released for free from his blog. So if you go to microsaas.co. We’ll link that up in the show notes. But you can get it for free. It’s aimed at first-time SaaS developers. I looked through it. He’s got four chapters out there right now and I think he’s shooting for 12 or 13. But it looks pretty good. It’s definitely a good resource for anyone who has never developed SaaS before. It has some solid advice in there about what sorts of things you should just completely avoid. And it’s based on his experience building a Micro-SaaS of his own on the side where he built it up to, I think, $250K in annual revenue and it was for store mapping. So if you have a bunch of stores that you want people to be able to locate and put that map on your website then he essentially provides the capabilities to integrate that onto your website and allow people to search for the different store locations that you have.
Rob [03:04]: Very cool. So I was thinking today – it was actually over the last few days – you know, coming up in the late let’s say 2008, 2009, 2010 I was just all – and even before that – I was all about being solo. I think I’ve mentioned this maybe briefly before. But I think that working in an office and working on development teams and working for managers and stuff, I just didn’t enjoy it. And so I kind of turned that into this thought of I just want to be solo; and I don’t want to manage anybody; and I don’t want to work with anybody; and I want to be off on my own doing things. And then over the course of time, I found that I just couldn’t do bigger things when I was completely on my own. Even with a team of eight contractors or whatever. And so eventually I wound up hiring folks as HitTail grew and then as we grew Drip. I mean, it’s a really different way to approach building software. But the realization I had today was you know, last week several of my team members were out of town. Anna and Derek specifically were out for several days for Thanksgiving and so was I. I didn’t see them for about a week and then they were gone Monday and Tuesday and I was in the office and realizing like I actually really don’t like doing this solo thing anymore.
[04:05]: It’s been an interesting transition for me of how much my enjoyment of work now is about having teammates; and about doing things with the team; and working with people; and helping them do their best every day and helping them excel. And then they, I think, in turn do the same for me. They kind of motivate me to do it. So, it’s kind of a random realization. But I’ve been thinking, you know, obviously if I think years down the line and I think what am I going to be up to – I don’t honestly know if I want to do another solo thing where it’s just completely me because so much of the fun and actually so much of the biggest epic realizations and the big breakthroughs that we have tend to be when I’m talking and working with another person or two other people and we’re having these in-depth conversations. Kind of like the breakthrough Derek and I had a couple weeks ago. That just wouldn’t have happened on my own. I don’t know. It’s kind of an interesting thought process. What do you think about that?
Mike [04:55]: I wonder if that’s more of a factor of what your historical experience has been when working with other people. I mean, your last job was working for the City of Pasadena, wasn’t it?
Rob [05:06]: I worked there and then I worked for a credit card company in Los Angeles for a couple of years.
Mike [05:10]: Yeah, that sounds fun. No offense there but –
Rob [05:13]: Yeah. For sure.
Mike [05:15]: Looking objectively at both of those and, granted, in at a very, very cursory level it sounds to me like you probably weren’t necessarily working with people who inspired you to do better and were working on things that were extremely interesting. So, I would almost attribute that to where you came from and what your background was. It feels to me like you would have just changed what your viewpoint was based on “Oh, now I’ve got this team, and I’ve liked them, and I hired them, and we fit together well.” Versus, you know, you come out of this environment where you either don’t enjoy the job or the management and you’re just not having a good time. And you’re like, “Oh, I hate people. I want out and I want to go do my own thing.”
Rob [05:54]: Right. I realized that it’s not that I hate working with people. It’s that I hate working with the wrong people.
Mike [05:59]: Yeah.
Rob [06:00]: You know? And finding the right people really changed the game for me.
Mike [06:02]: I was trying to put it in a very polite way.
Rob [06:05]: Yeah. How about you? Anything else you’ve been up to this week?
Mike [06:08]: Well, I ran a last minute cyber Monday sale for my book and sold quite a few copies. I shipped out a lot of the physical copies of the book several days ago. And one of the things I found out was I was looking through the people who bought it because I had to go through and fulfill the orders for the physical copies because I have them printed on demand through CreateSpace. And one of the people who bought it actually lives right in my town. I have to reach out to him at one point.
Rob [06:33]: Yeah, that’s cool.
Mike [06:34]: It was interesting. I was kind of shocked because I was going through and was like, “Oh, I’ve got to send one to -“ wait. He’s like five minutes from my house.
Rob [06:41]: Yeah, totally. Got to get together for lunch.
Mike [06:43]: Yep. The one thing I have started to run into if anyone knows of a print on demand service for printing and sending out books that allows you to just upload a spreadsheet of those – because when a bunch of them come in it’s kind of a pain in the neck to actually go through so if anyone knows of something like that definitely let me know. I sent an email into CreateSpace’s customer support to see if I could just upload a spreadsheet but it’s kind of a pain in the neck.
Rob [07:05]: Yeah. I agree. Or something that integrates with Gumroad. Because I ran into the same issue with – my 10-year-old wrote the ‘Parent’s Guide to Minecraft’ book and whenever a new order comes in one of us has to go and manually enter it into CreateSpace to print it out and it seems like there should just be a better way. Like an API or something.
Mike [07:22]: Yeah. Like I said, I emailed them and asked them if they had any information on how to do that but it would be nice if there were other options out there that just kind of integrated, as you said, directly into Gumroad so that it’s all completely hands-off so I didn’t even have to worry about it.
Rob [07:33]: Right. And to be honest, when copies of my book ‘Start Small, Stay Small’ come through, I actually do have a VA who does that for me. And basically when I get the purchase conformation I forward it over to the VA and say, “Please send this book.” And you know the address is right in there so. It’s human automation. It’s not ideal but it could save you some time if you get 10, 20 orders like that again.
Mike [07:52]: Yep.
Rob [07:53]: So, what are we talking about this week?
Mike [07:54]: Well, we are going to be, I think, revisiting our goals from 2016 and looking to see how we did on them. And then discussing a little bit about our 2017 goals.
Rob [08:02]: Yeah. We’ve done a goals episode, what do you think? Four, five years in a row?
Mike [08:06]: I think so. Something like that.
Rob [08:08]: The podcast started in 2010, if I recall. So I think we’ve done it most of the years. It would actually be interesting to kind of look back at all the goals we’ve had over the years. Do you think it would be happy or like the Boulevard of Broken Dreams to look back over those goals?
Mike [08:21]: It depends on whether it’s you or me looking at them.
Rob [08:25]: Yeah. You want to kick us off with a couple of your goals? Looks like you had four goals from 2016 and I had three.
Mike [08:33]: On that list, there were two kind of major goals and the two other ones were more strategy related in terms of how I was going to accomplish them. I look back at them now and it’s probably a little more difficult to quantify some of these. But the first one was to launch my new product by early next year. My goal was to have early access by April 1st and then email my launch list by July 1st. I was able to get it, I’ll say, the MVP ready by April 1st but it certainly wasn’t ready for prime time. And in fact, it probably took four to five months after that in order for it to get to the point where it was not even minimally useable, but useable enough to start providing value. We’ve spent the last couple of months just trying to clean up a bunch of stuff and make it so that we can iterate faster on different features.
[09:17]: I’ll be honest, I’m kind of disappointed at how long it has taken to get some of these things done. But at the same time, I also feel that, right now, the product is actually in a reasonably good position and it’s looking better. And when I’m talking to people they seem excited by it. I was talking to somebody from Microsoft the other day and they just kind of called me out of the loo and said, “Hey, can we talk about how you’re using this [?]?” And I said, “Sure.” And I got on the phone and was talking to them. I was telling them about what my product does that runs on their platform and he was like, “This isn’t a discussion for now, but I’d love to hear more about it.” So, it’s nice to get that kind of feedback. And I’m getting inquiries from people and walking through what it is that they need and how it can best serve them. But it’s hard because I still get a lot of support requests as well. So, trying to balance between all of the different things and just juggle. That’s been, I’d say, the hardest challenge over the past couple of months.
Rob [10:07]: And so, your goal was to hit early access by April 1 and you kind of got there. We give you maybe an 8 out of 10 on that.
Mike [10:11]: Yeah.
Rob [10:13]: And your plan was to launch to your email list by July 1, which is about three months after that. When did you launch to your email list?
Mike [10:19]: I, honestly, still haven’t done that.
Rob [10:20]: Oh, wow. Okay.
Mike [10:21]: Yeah. I’ve been individually going to people and kind of picking them off of the email list and following up with them based on their interactions with the emails in there. But I haven’t done like a mass email to them to say, “Hey, come sign up.” So, I’ve gone individually to people who seem like they’re more interested than others. But I’m a little hesitant right now. As I said, Microsoft’s coming in. They’re sending in a couple of consultants to take a look at some stuff. But I have some concerns about scalability. And I think that until those are alleviated – Once they are, I’ll feel better about that but I’m a little gun shy about just dropping about 20, 30, 50 mailboxes on the thing.
Rob [10:59]: Oh, geez. That’s a bummer. That’s a real bummer to have that concern at this early stage. I know that you’ve been kind of cherry picking people out and adding a customer here or a customer week or a few customers a month. But I guess I hadn’t realized it was – what am I not paying attention or something – I hadn’t realized that you hadn’t emailed your list. Scalability, yeah, that’s the concern right now. It’s December 1 right now when we’re recording this. What’s it going to take to fix that? Like how long?
Mike [11:23]: I’m meeting with them next week, so I’ll have a better understanding of it after that. I really just want that second set of eyes looking over my shoulder who’s got some experience scaling out stuff like this. That’s really all it is. I mean, could I start adding one a day for the next 30 days? I probably could. Could I add 30 tomorrow? Probably not. It would probably work but, as I said, there’s a lot of hand holding that kind of goes into the product at the moment just to get people on it, get them using it. You probably ran into this early on with Drip where somebody would sign on, you put them in and then it might have been difficult to get them to add in their email addresses or to write the emails that went with it. And, of course, you can help them out with that. You can write them for them or you can offer to port emails over. But you can’t make them do certain things. You know what I mean?
Rob [12:12]: Right. Yep. To be honest, when we were doing it before where we had our onboarding built out like kind of walked them through it like a guided set up or a wizard, I used Boomerang a ton. I would just email somebody and then Boomerang it three or four days later and check in. I was essentially, I kind of had a poor man’s Bluetick. That’s really what you want. You really want a Bluetick that’s basically pinging people. I think you could [dog food?] your own product certainly for this onboarding. But yeah, that was it. It was a lot of questions and it was a lot of “Can I do this for you?” and it was a lot of “What do you think?” and it was just a bunch of hustle; is how I remember. And then once we knew the sticking points and kind of that minimum path to awesome where people got the dopamine rush from it then we built that into code and we built the actual guided setup with the bar across the top and the trial emails that go out to people and let them know what’s next.
Mike [13:00]: Yeah. Some of that stuff like the onboarding issues that people have run into, those are some of the things that we’ve focused on. So one thing, for example, when an email gets bounced if they send it to an invalid email address, it comes back. And the software previously didn’t know how to handle that. It just kind of ignored it. And it depended on whether or not it came back directly from the server or if it came back delayed in some way, shape or form way after it was sent. Depending on which situation it was in, it might do one thing, it might do another. At this point, it now handles that and it also marks those emails as bounced inside the application. But previously it didn’t do that. So you had not way of telling based on contact in the system how the system treated it. You also didn’t have a way to pause people; you didn’t have a way to just mark it as completed; you didn’t have a way to mark somebody as, “Hey, don’t ever contact this person again.”
[13:48]: There’s a lot of these – I don’t want to call them edge cases – but situations that come up where people are using the software and then they say, “Oh, I would like to be able to do this. Or mark somebody in this way. Or if an email gets bounced, I want to tag them automatically.” And some of that goes in to actual automation and some of it’s just how do you have field in here that captures this piece of information and is that something that lots of people want. So, those are the things I’m still kind of working through. But I am kind of moving in the direction of a public launch. The website itself, I got that ready, I think last week. And there’s still a lot of work to do on it but I, at least, got a new design and some webpages out there and I’m working on putting a full blown signup process in place for that.
Rob [14:29]: Right. And you don’t even need that to launch though, right?
Mike [14:31]: I don’t need that to put somebody onboard. I can manually walk them through but I want to get it to the point where I don’t have to manually do it. That’s really the –
Rob [14:40]: Oh, that’s true. Because when you send them the email, you want them to be able to go and signup on their own.
Mike [14:43]: Exactly. Exactly.
Rob [14:44]: Okay. Yeah. Got it.
Mike [14:45]: I can get somebody on Skype Call and walk them through it but I don’t want to have to do that long-term.
Rob [14:51]: And by the way, you and I have both used the phrase “an email.” What we really mean is “a launch sequence.” You’re not going to send them an email, “Hey, come and sign up.” You’re going to build some anticipation and you’re going to tantalize them and give them a little screenshot, screen cast action. Then you’re going to, boom, drop the hammer on them. Here’s the big discount. Time limited for that – right? It’s the standard?
Mike [15:09]: Um-hmm.
Rob [15:10]: Okay. Just making sure. I would hate to see you make that mistake. I know you –
Mike [15:14]: No, I’m definitely not doing that.
Rob [15:17]: Here you go. Our app is up. Probably once a quarter I just get from some random start-up that I must have signed up here about a year ago and I get this random thing, “Hey, Blaze app has” – I’m just making a name up – “blah-blah app has launched. Come sign up.” And it’s like “A” I don’t even remember what you do. “B” one email’s not going to get me to do it. “C” you didn’t build any anticipation. Just kind of making all the rookie mistakes and, I mean, you can obviously 10x your signups if you do it over a sequence and you build some anticipation.
Mike [15:47]: Yeah. One of the things I’m looking at doing as kind of a marketing tactic for this is setting up stuff inside of Bluetick to more or less just demonstrate how it works. As opposed to having somebody come to the website and go through a tour, say “Hey, why don’t you come over here, enter in your email address and you’ll see exactly how this works. This is what’s going to happen. This is what would look like if one of your customers or one of your prospects was on the other end.” And then just be very blunt and open and honest with them and say, “Look, I’m marketing to you. This is all automated but you wouldn’t know that probably unless I told you. And this is how you can make it look for the people that you are pursuing as leads.”
[16:25]: I did some of that when I was onboarding people and it worked really well. I had the little disclaimer at the bottom, “Hey, by the way, this is completely automated. I’m not touching anything here. And if you don’t respond then you’re going to get another email and here’s the time you’re going to get it.” It would be great to be able to have those things injected in there and use that as more of a demonstration of exactly how it works and what it’s going to look like from the other side. Because that’s one of the concerns that I hear from people is, “How is this going to look to my customers? How do I make sure that it looks like it is personalized and it has that warm fuzzy feeling as opposed to this was some bulk, automated, cold email?” Or what have you. That’s the thing. They want that illusion of personal touch and –
Rob [17:07]: Sure.
Mike [17:08]: – there’s some things that they don’t get that from.
Rob [17:10]: Got it. So when they enter their email and they click submit, they’re actually going to receive an email that says, “Hey, this is a sample.” Or were you going to just show them like a screenshot of a sample?
Mike [17:19]: My intent is to build out, essentially, a series of emails and workflows inside of Bluetick that will walk them through. And if they take certain actions, it will do different things. And at the bottom of the emails I would basically just say, “P.S., if you do this, this is going to happen. If you do this other thing, then that’s going to happen. If you don’t do anything, then this is what will be next.”
Rob [17:38]: Got it. But will they be receiving actual emails in their real inbox –
Mike [17:41]: Yes.
Rob [17:42]: – with this? Yeah. See, I think that’s super cool. I was going to say if not, you should do that. Because that’s the true demo of it is for them to really see what the customer sees.
Mike [17:48]: Exactly.
Rob [17:49]: That’s cool. So we’re 21 minutes in and we’re one bullet of 14. Let’s move on. This may be a little bit of a longer episode. My first goal for 2016 – so the one that I set a year ago – was to 2.5x Drip’s revenue. And at the time that I set this goal we were on pace at our current growth rate to hit 1.8x. I actually think we will hit – it’s going to be very, very close to hitting 2.5x. A lot of that help was Leadpages – the acquisition and then their marketing team. Something interesting that they did is when Leadpages acquired us and then did the $1 plan and then the free plan, is they actually nuked about $22,000, $23,000 in MRR. That actually set us way back on this goal. And this was just a personal goal that I had set up for myself. Leadpages goals for Drip are totally different. So that actually set us back and then we’ve since, of course, caught back up to it. So, anyways. Yeah, 2.5x I think we’ll either hit it or we’ll be really close. Something like 2.4. And given the level of revenue that Drip was at a year ago, this is not too bad. Not too shabby. How about you? What’s your next one?
Mike [18:54]: My next one was to rerun some of my, what I called ‘life experiments’ because back in 2015 I hadn’t done so well on them. And this year I’d say I probably did about the same as I did last year where they ran for a while, I was doing a bunch of different things and then things got busy with Bluetick and I kind of took my eye off of that stuff. So early on in the year it was good and then mid to late year I just didn’t do so much. So I kind of focused on Bluetick more than let’s say going to the gym and going to random events and stuff. There’s like a Renaissance fair that is south of Boston that I wanted to get to this year that I just didn’t get to. And then there is a gaming meetup nearby that I’ve been going to meets every week but I don’t go every week. It’s nice to get out and do things like that and just kind of meet new people. You work from home all the time and you don’t get out much so there’s not a whole lot of social interaction. So it’s nice to get out of the house and do other things. I really just want to kind of open my horizons to other stuff, to new things and get me out of my day-to-day.
Rob [19:54]: That’s what you mean by ‘life experiments?” Like the meetup and the Renaissance fair?
Mike [19:58]: Life experiments is more like trying new things and doing things that I wouldn’t normally do is more it than anything else.
Rob [20:04]: All right. My second goal for the previous year was to support Sherry with her ‘ZenFounder’ book. I was planning to be second author on a book that she had outlined and was planning to write. Kind of like a founder of mental health. Like how to stay sane while starting up type of thing. That’s still on the docket. To be honest, the Drip acquisition just decimated any time that I had to be able to contribute to that. And then the relocation and kind of the chaos that that created – planning for a move; planning to sell a house; shut down Sherry’s private practice; pull the kids out of school; find a new place to live; get the mover. Just everything that goes along with that was literally hundreds of person hours and it was all the nights and weekend time that Sherry probably would have spent writing the book. So this did not happen in any way, shape or form – and in fact, I don’t even know – I think she has maybe less than a chapter kind of drafted up. I think this will be on her docket here in the next year. I wouldn’t be surprised if she gets it all or mostly done in 2017.
Mike [21:03]: The third goal on my list was to be a lot more deliberate about where I spent my time. So to kind of draw delineations between work time and family time and then me time. And my intent was to work less and enjoy my off time a little bit more and generally be healthier. That went well for the first few months. And then after I got to that pre-launch beta period for Bluetick, things went downhill for probably four or five months. And then I think things are getting back on track at this point. So the last month or two I’ve been going to bed earlier, turning off all electronics and stuff like that. And just kind of taking it easy in the evenings. So, I don’t know. I’m not sure how to rate this one. Probably 6 or 7 out of 10 as opposed to anything else.
Rob [21:41]: Cool. And my third and final goal for the previous year was to make three to five angel investments in Bootstrapper. These are post-traction B2B SaaS apps. So in essence kind of going after the folks who are building real businesses rather than raising crazy rounds for B2C stuff. And I definitely made two investments and there was a third that is still in the works basically. And they’re having actually – I’ve committed to it but they’re having a delay in getting some paperwork together. So, I’ll say that I’ve mostly made this goal. In retrospect, five is just a little ambitious for me given how little time I have to devote to this and just how few really – I don’t know. I’m trying to say investment worthy companies that there are and that kind of came across my desk at a valuation that made sense. Since I am somewhat a small time angel investor, I’m not going to invest in rounds when people have valuations of $7 million or something. It just doesn’t make sense for me to write a check. It just doesn’t make economic sense. So for a deal to really be a fit for me and my skill-set where I can provide value, which is why I’m investing in things. Not just to get a return or to have a dog in the race, but I want to actually be able to contribute and offer advice, insight and opinions. It’s kind of niched down in terms of opportunities that I think are really a fit for me. I’m going to be moving forward keeping it kind of a more modest goal.
Mike [23:01]: My fourth goal was to be more complete with my planning. And the intent there was to create full plans rather than partial ones because I have a tendency sometimes to have things more in my head as opposed to written down on paper. I’ll scope out the first set of things really well and then after that I won’t drill down and write down a lot of the details until I get near the end of something. And then I kind of thrash a little bit. I did reasonably well with this. I would say that I definitely got to a point with Bluetick last year where things kind of went off the rails for a while and things are, as I said, kind of getting back in the right direction at this point. A lot of the plans that I came up with are starting to look like I can actually go back and pursue them. But some of the plans that I did put together, they basically just got delayed is really what it came down to. I do have a full blown marketing plan for Bluetick set out and I have a road map for the Product for Features and stuff. But even with that product road map things get moved around a lot which I’m not really comfortable with but, at the same time, customers are asking for stuff so I kind of have to slot in what they need versus what I think that the product needs just because they’re using it, they’re running into issues and it’s like those things need to be fixed.
Rob [24:11]: Yeah. And there’s a balance here between having a longer term plan of like, “Over the next 12 months I want to do this to revenue and here’s the general idea of how I’m going to get there” I think is one thing. And even having that in writing is probably good like “here are the tactics I’m going try. Here are the growth sprints or whatever.” I feel like planning product road maps is really difficult. Like we move ours around quite frequently based on customer request; based on response to the market; based on the realization we have of like “Oh my gosh, we shouldn’t have been doing this the whole time. We really need to get that in sooner.” Based on performance; based on someone trying to send spam through your system. There’s all these things that make you respond so my thing has always – we tend to roadmap about 60 to 90 days out. And I think if you’ve planned that out really well and have it written in order 60 to 90 days, I think that’s plenty of time. As early as you are where you’re still getting customers in who are going to find deal breakers for them. I’ll be honest, when we were at your point we were literally planning maybe a week out, sometimes two.
Mike [25:08]: Okay good. That makes me feel so much better because it was like I’m not anywhere close to 60 days.
Rob [25:13]: No, but we’re such a more mature product, you know. And we have more developers and you just have to do things a certain way. But you’re trying to just hammer out little things to keep your people around. And I think that when people have deal breakers and they’re like, “I can’t use your software until it has this,” we would drop everything and just do that. We would build that to get that next customer. It was like, “What can I build to get the next customer in the door.” So, all that to say, yeah, there’s a balance here. I think that having some long term plans but being really flexible with certain other ones at a different phase of your business I think is important. All right, 2017 goals. Looks like you have four, I have three. You want to kick us off with your first?
Mike [25:47]: Sure. So the first one is to log at least 100 days of exercises coming here. And under the umbrella of exercise I’m including both going to the gym and doing things around the house that are more physical exertion related. If I’m going out in the yard and clearing a bunch of brush and stuff like that. Moving rocks and stuff around. I kind of log that as a checkmark under the box of exercise for the day. Obviously, if I just walk up the stairs and back down or something like that I’m not going to count it. Because there’s certain things that you can do around the house that really should count as getting out of your chair and doing a little bit more than you probably would on a regular day.
Rob [26:23]: Is that why “exercise” is in quotes in the outline?
Mike [26:26]: Yes.
Rob [26:27]: Is that your case of exercising? That’s funny.
Mike [26:29]: Thanks for calling me out on that.
Rob [26:32]: Totally. My first goal is – it’s an interesting one. And it’s one that I’ve kind of struggled with and really had to think about. But you know I went on my retreat where I got strep throat a couple of weeks ago. And one thing I realized is that I really don’t want to start anything new in 2017. I don’t know if I can unequivocally say that I will not for the next 12 months start anything new but that’s kind of how it feels right now where basically you and I have the podcast, we run three MicroConfs now – two in Vegas, one in Europe – I have a podcast with Sherry and I’m still all in running Drip. And I’m still at the point where I’m kind of recovering from this year. Even the past couple years of just pushing hard, growing Drip and then the acquisition and kind of all the chaos and stress that created. And so, as I sit here today, I don’t really have the desire to do anything new. I’m talking like stuff that I might do and say, “Hey, launch a new app. Hey, write a book, start a new podcast.”
[27:25]: Whatever I might do with free time. It’s an interesting non-goal almost. It’s something that I want to – I don’t know that I’ve ever done this. You know what, last time I did this was in 2010 when our second son was born and I really kind of worked kind of the four-hour work week. I was working about maybe 10 to 12, 10 to 16 hours a week. That was when I had that whole portfolio of Micropreneur businesses – DotNetInvoice and stuff. It was right before HitTail. And that was a great time and I eventually got really bored and felt like what am I doing with my life. And that’s when I geared up and acquired HitTail and kind of 10x’d all my previous efforts. I think the one exception to this non-goal may be that if Sherry decides to really write the ZenFounder book, I want to do that with her. But I wouldn’t be, you know, the driving force. I would be probably adding my voice to it and helping her think through some stuff.
Mike [28:12]: I think there’s something to be said for intentionally doing nothing, so to speak. There’s times when you’ll go through like a rough patch or things are just really, really busy and you kind of need a break at that point. And you’ve been heads down on Drip for so long that running a startup is not necessarily the easiest thing in the world to do. It takes a lot of time, dedication and focus and it becomes something that you’re so focused on and you’re devoting so much of your energy to that there comes a point where you just kind of need a break I think. So it sounds to me like you’re probably close to that point or, you know, and it’s not to say that you’re just going to walk away and just go off and do something else as opposed to Leadpages. But coasting is not a bad thing.
Rob [28:54]: Yeah.
Mike [28:55]: You know you can’t always have a goal every single week. It’s hard to maintain that level of exertion for years on end. You can do it for a little while but you can’t do it forever.
Rob [29:05]: Yeah and it’s interesting. You use the word “coasting” and I guess I feel like I don’t think of it as much as coasting as just not starting anything new. I still want to be all in on the stuff that we’re doing, you know. I don’t want to coast on MicroConf; I don’t want to coast on the podcasts; and I don’t want to coast on Drip. I just don’t want to add anything new. Because it’s the new stuff, right. Like you’re going through right now. Just the tremendous amount of energy that that takes to get something from a standing stop to any type of worthwhile point, it’s a lot of effort. I genuinely do see this as a temporary thing. I do not think I’m done for life. But it’s almost like if you’ve ever burned out, it just takes a while to recover from that. I don’t know if I burned out or not. I just know that looking back on this year- there was obviously a lot of good that came out of it – but it was a very exhausting year. I’m looking ahead and think about just kind of being all in on what I have and not adding anything to that plate, it feels like a good thing to strive for.
Mike [29:59]: My next goal for 2017 is to make Bluetick profitable. And by profitable I also mean including my time.
Rob [30:05]: Woo hoo! So not ramen profitable?
Mike [30:06]: Yes, not ramen profitable. Something that if there was nothing else that I could make a fulltime living doing it. And I think that there’s definitely some challenges with this. I’m sure we’ll talk about them at length in some other episode, I don’t think we should do it here because we’ve talked at length about it very early on just the challenges of this past year. But I feel like it’s in a good spot at the moment. And even with some of the concerns I have about scalability, I still feel like a lot of the stuff is well written enough that it can be broken out and it can be made to work better without nearly as much effort as it took to get there. So we can talk about that some other episode. I’m sure we will. But that’s kind of my goal for the next year is to make sure that it is a profitable product moving forward.
Rob [30:48]: That’s a good goal, man. To me this is the number one thing that you could be focused on all year. And I think it’s really measurable. I think it could be a really good win for you. So, glad you have that in here. My second goal is to do between one and three angel investments this year. I’ve really enjoyed this process of getting to know founders and of, like I said, being able to offer advice and to be able to contribute financially and help their business get to the next level. I would think that even without trying too hard, I’ll probably just stumble upon one over the next year and I think top end might be three angel investments. And this is a way for me to feel like I’m really still in the game with these startups because I am invested and I’m seeing the monthly revenue growth and I’m seeing the struggles they’re going through but I don’t have to go through them first hand. And I can still do a 30-minute call or an hour call and I feel like dispense, “Here’s what I’d do in this situation.” But I don’t have to then go do it. This is probably my way of really staying in the thick of things without perhaps really staying in the thick of things.
Mike [31:53]: It gives you a layer of abstraction between you and the actual problems. My third goal is to blog publicly at least every two weeks. So that comes out to 26 total blog posts over the next year or so. But I’ve got a lot of ideas that I’ve written down that I just haven’t sat down and allocated the time to write those things out. But there’s still a lot of things that are just kind of jumbled up in my head so I kind of want to get those out. Somebody asked me before if I was going to write another book and I don’t see that in the near future. But I definitely see that, for me at least, writing about or documenting some of the things that I’ve been running into helps me get it, not just out of my system, but helps me think through it a little bit better and gives me a little bit more objectivity. I kind of want to make an effort to set aside the time to make that a priority and, not so much to get it out there so that people can read it, but more to get it out of my head and become more objective about certain things.
Rob [32:46]: This one’s interesting. I like the ambition of it. Are you like me where a blog post for you is like maybe between two and eight hours depending on how much time you invest in it?
Mike [32:57]: It could be. I actually thought a little bit more about this and – I didn’t write it down on the notes here – but my thought process behind this was to allocate between one and two hours per week to writing. And if it’s done at that point then it gets published and if it’s not done it still gets published. I’m really going to be working with hard deadlines in terms of the time that I’m allocating to it. So, it’s not going to be stuff that’s highly polished; it’s not going to be stuff that is extremely well thought through but it helps me get things out of my head. Because I write on a regular basis anyway, I just don’t publish it. So I think that by doing that it will give me that outlet to just put it out there and give people an opportunity to comment on it or talk about it or give it as points that could go up in discussions or what have you. I see it as just a way to get that stuff out of my head really, like I said. I’m doing a lot of that stuff now anyway, I’m just not publishing it. That’s not helpful for other people and that’s one of those things that I like doing is I like helping other people. And because the stuff that I write for the most part now isn’t published, it doesn’t do that.
Rob [34:04]: Yeah. I like the one to two-hour timeline for you. Or kind of a time box because otherwise I think – I do believe your focus should be Bluetick. And that if this goal distracts you from that that I should not basically. I think if you can set yourself a two-hour time limit every two weeks that’s perfectly reasonably.
Mike [34:22]: Yeah. And I think some of the topics are going to be related to things that I’m running into for Bluetick as well. I have some experiments that I want to run in terms of pricing plans and that will probably be turned into a blog post about what I’m doing and why. And other people might find it useful. They might say, “Yeah, that sounds great but it wouldn’t work for us and here’s why.” And that’s fine. But the idea is more for me to think about those things a little bit more objectively and by putting that tight time box on it then it forces me to finish in that time. Because you said that it could take you anywhere from four to eight hours to write a blog post. I could easily do the same thing because there’s not real end date for writing a blog post. It may take you an hour, it may take you 25 but if you don’t put that cap on it, it could easily go forever.
Rob [35:08]: My third and final goal for the next year is to exercise two days per week. I have typically been exercising about one day a week, one and half days a week. Kind of finding it hard to really carve out the time. But since moving to Minneapolis I have found since we live right next to a lake that it is so much easier to just get out for 20 minutes and just run. In our neighborhood back in Fresno, it just wasn’t really feasible. There were no sidewalks and there were all these busy streets and it just didn’t make a lot of sense. So I found this a lot easier. I think the challenge will be in the winter. I’ve run a few days when it’s in the 20’s and the low 30’s. I have kind of the proper gear for that at this point I think. So we’ll see if I’m disciplined enough to really carve out the time. But I’ve just found that the more I do that kind of the better I feel overall. It’s funny, I looked at this goal, you know, two days a week is about 104 days of exercise a year and you basically have a very similar goal of 100 days. So, I think both of us are looking to stay in shape now that we’re as old as we are, huh?
Mike [36:07]: Yeah. I mean, you look at the raw number of 100 and it’s like, wow, that’s a lot. When you break it down like you just said, two days a week is actually not that much when you look at it across the entire year.
Rob [36:19]: No, it’s not. And to be honest, I would love for it to be three days. I’d love for it to be every other day. But those just aren’t realities for me these days given what’s going on. So I don’t think this is overly ambitious. I think it’s very realistic. But certainly an ambitious one would be a three day a week exercise plan. And for my fourth – it’s somewhat of an honorable mention because I just can’t be as specific as I would like to be on the podcast – but I have goals for Drip basically. And these days there are some secret revenue goals, although I’m not as in charge of that as I used to be given that Leadpages handles the marketing so well. I have more product goals about giving certain features out and just making it basically the best marketing automation tool available. I’m not going to sit here and lay out the roadmap of everything we’re going to build but I definitely have some very specific things that in the next 12 months if we don’t build I will be displeased. Maybe by the time we get back here next year, I should be able to point backwards and say, “Hey, that’s when we launched this, this and that. Those are the three components that I was trying to get out.” I apologize for the vagueness in advance. But in retrospect, I’ll be able to talk a little more about it.
Mike [37:24]: Awesome. Well, I think that about wraps us up. I’m sure we’ll be revisiting some of these throughout the year. And it probably makes sense to take a look at these in April or May or so and just make sure that we’re at least on target for some of these. And if we’re not we can start revisiting that.
Rob [37:38]: I agree. And as a listener, if you have a question for us, call our voicemail number at 888-801-9690 or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from ‘We’re Outta Control’ by MoOt used under creative comments. Subscribe to us in iTunes by searching for “startups” and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
Episode 317 | Our Predictions for 2017
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike make their predictions for 2017. They also look back on the previous year’s predictions and evaluate whether or not they were correct.
Items mentioned in this episode:
Transcript
Rob: [00:01] In this episode of Startups for the Rest of Us, Mike and I talk about our predictions for 2017. This is Startups for the Rest of Us episode 317. […] Welcome to Startups for the Rest of Us, a podcast that helps developers, designers, and entrepreneurs be awesome in building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob.
Mike [00:26]: And I’m Mike.
Rob [00:27]: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Mike?
Mike [00:33]: Well, my wife and I rescued a cat this week. There was a cat that was coming up the driveway and our kids were looking at it. It was very friendly and it seemed, obviously, like a stray of some kind, but it got close to us and it was kind of rubbing against my son, and he was patting and he’s like, “Can we feed it?” and of course because you don’t really want to go feeding random stray cats, because they’ll never leave. But this one was like scrawny as all hell. It was probably only about four or five pounds when we found it, and it was full-grown, so it was just obviously in need of some love and care. But it was somebody’s cat. I don’t know whose it was, but we think that somebody just dropped it off. We took it to the vet and had them check it and see if there was like a chip in it, and there was nothing. Posted on Facebook groups and tried to find its owner and haven’t been able to find it, but over the course of about four days, it ate probably close to four pounds of food, which is just an ungodly amount of food for a cat that was that size. So we’ve decided in the end to keep it. So we’ve taken it to the vet, had its shots, and it’s been hanging around in the basement for the past week or so.
Rob [01:35]: Oh geez. Are you prepared for the responsibility? I guess cats are a lot less responsibility than dogs, but have you had a pet in the past?
Mike [01:42]: Well, we already have one cat, so right at the moment, that’s why this one’s in the basement. We’re keeping them separate for the time being, because our other cat is not, I’ll say, very friendly. I’m not exactly a cat person; I’m more of a dog person to begin with, but our upstairs cat is just, you know, she wants to be left alone, left to herself. She just wants to sit in a corner. She’s more a cat that’s like, “Pet me. Stop.” It just does not want to be involved in any way, shape, or form, unless it’s dinner time. So we’re keeping them away. This upstairs cat is definitely not particularly happy that there’s something in the basement, although, I don’t think she really understands what is down there, but she does not like going near the door anymore. She used to go down there all the time and now she’s won’t go near the door. So it’s probably going to be like a month or two before we can integrate them together. But we’ll see how it goes. The kids are in love with the new cat and like playing with it, and we’ve been locking one of them in a bedroom and then just letting the downstairs one come upstairs and hang out a little bit. But we’ll see how it goes.
Rob [02:42]: Sounds good. I wanted to bring up a subject we talked about last week, which was Wistia pricing plans. And when we were on the show, I’d said that Sproutvideo was cheaper. I think it has a –whatever it is – a $15 plan or a $25 plan. And I mentioned that Wistia is basically starts at $100 and I think you said that they had a $25 plan. But since then I went there – because I was talking to someone else a day or two later and we went and looked and it was like, they have a free plan that’s super limited. You get three videos. So it really is hyper-limited. And in essence, they start at 100 bucks at this point. Just to clarify.
Mike [03:18]: They used to, and it’s funny because I’m on their $25 plan. So I used to be on a $100 plan with them, and then they moved a lot of their pricing plans around and it made more sense for me just to switch down to their $25 plan. And then since then, they’ve gotten rid of that and now they only offer the $100 plan again.
Rob [03:35]: And so they start around $100 and then Sprout does have a $20, basically a $25 plan that is, again, it’s a bootstrapper plan is how I think about it, because it doesn’t have all the features that Wistia does but it is a perfectly competent platform and you can capture emails and do stuff – just not as much fancy stuff as you can with Wistia. Other thing for me is, first time ever this week going to Disney World. Actually taking the kids there as a surprise. I’m pretty excited to get down there and see what’s up. I’ve been to Disneyland a few times but I heard that it’s quite different. It’s a different scale. Have you been there? Have you been to Disney World?
Mike [04:10]: I have. I’ve been there I think twice. So we went down there with the kids both times and we took my mother-in-law once as well, just because she could help out with the kids. But it sprawls. There’s a lot to Disney World. Do you know where you’re going, or?
Rob [04:23]: Yeah. We’re staying in one of the resort hotels and then we have basically three days and we go to three different parks. So we’re not doing Epcot; we’re doing all the other three parks. The thing I’ve been really impressed with, with Disney is the level of technology that they’re using. So I’ve received basically a print on demand booklet that says, All-in family vacations, has the Incredibles on the front. You flip it over and it’s like your itinerary is all custom-printed inside, it looks really sharp. Then they send you the wrist bands and those must be NFC or something, because they say that’s your FastPass, that’s your key to your door of your hotel room. That’s your meal ticket. It’s like everything. And each of them is monogrammed. It’s etched with the name of the person. It’s really, really pretty impressive. And then I’ve been selecting FastPass stuff online in advance and I’ve been able to move that around and it’s super flexible and I’m impressed with the level of sophistication and really feeling like we’re not just going somewhere and going to spend days standing in line, but actually able to plan this thing and feel good that things are taken care of.
Mike [05:22]: When we went to Disney World, we went to a couple of the different parks. We went to Epcot and we went to the regular Magic Kingdom and there was – there was also, I think it’s Animal Kingdom?
Rob [05:31]: There’s a wildlife, yeah.
Mike [05:33]: So we went to those, but we ended up spacing it out a little bit. So we were there for about a week, I think, and we went to a different park every other day, and what we found out was that the kids were just wiped out by the end of each day. So the next day it was like a recovery day, and we would just stay at the hotel or go someplace else and not let them be as overwhelmed. And then the following day we would go to one of the parks. And we found out that that worked well. But they were younger then. So your kids are older than they were, so I think that they’ll probably be fine.
Rob [06:01]: We’ll see. I’m sure we’ll all be exhausted by the time it’s done, but we basically have three full days down there and then the two book end days are our travel days. So it’s nice to do it. And we’re actually recording a couple of weeks in advance, so this is over Thanksgiving, which is why we decided to do it now.
So let’s dive in to our predictions. In a true Startups for the Rest of Us tradition, we like to look back at the predictions we made last December. We made predictions for 2016. We each have four. We’re going to look at those, evaluate whether we think they became true, whether we think we were correct with them, and then we’ll wrap up the show with our predictions for the coming year. So you want to kick us off with your first prediction that you made last December for 2016?
Mike [06:41]: Sure. So the first one I made was that lots of churning would happen in the wearables’ category. And I had said that I didn’t think that I saw most of these going anywhere and that it’d be a few years before any of these became really big. And one of the things that I had mentioned specifically was that I didn’t think that the Apple Watch was ever going to be a big thing like the iPhone or the iPod. And I would say that this probably turned out to be true. I look at the landscape and I don’t see anything that came out where everyone was like, “Oh, I have to have that,” or, “I really want that.” And even Apple this past year came out with the Watch 2, and there wasn’t really a lot of hubbub about that from the community or from the people who were out there investing in those types of technologies. They looked at it and they said, “Yeah, that’s okay. It’s a nice incremental improvement, but the first one was not so overly impressive that it really made a big difference in my life.” I even saw some people who they said that they regretted getting it. And I think that there’s a lot of those different wearables, especially when you see things like the things coming out from Fitbit and various other companies. There’s just not a lot to them. They augment what’s going on already, but they don’t necessarily change how you live your life, or what sorts of things you do.
So again, I think that this came true or it just was status quo I’ll say more than anything else. But I think it’s going to be a while before the wearables category really starts to take off, because it’s going to be a while before people figure out what is it that the consumers really want or would really alter their lives or make them better. And I don’t think it’s really obvious what those things are. I think there’s a lot of opportunity, I just don’t think that there’s – there’s not that killer feature yet that people are like, “Oh, I absolutely have to have that.”
Rob [08:17]: My first prediction for 2016 was that single-round bootstrapping, also known as fundstrapping will become a common, viable option. And I would say that it has become more of a viable option. I’m not so sure it’s common. I had imagined more people taking this road. Although it is more viable, it is more popular, and I’m seeing more people seek this road as they hear about it, right, as we talk with the Jordan Gall or Justin McGill who have really done the fundstrapping model. Or when I had Bryce from India VC on the show a few episodes, that seemed to really resonate with people on the thought of being able to raise around, to get there faster, and to be able to basically quit your job from day one but not be beholden to VCs and not be beholden to this implied series A. I think it’s really appealing to people and it has a lot of the pluses of bootstrapping with some of the benefits of basically raising funding. And it’s a mix. So I think this is a partially accurate assessment. I think maybe I’m ahead of the game, but I do continue to believe in this model and I think it’s going to become even more popular over the next year or two, especially as a lot of the startups space and specifically the SaaS space continues to be really competitive.
Mike [09:27]: My second prediction was that we’re going to see a lot more bootstrappers in our circles concentrating less on making money and more on doing what they’re enjoying doing, and more or less living their lives in their own terms – less consumerism and less accumulating of stuff and more doing what they enjoy. And I don’t know, I think this one’s hard to gauge. I definitely wouldn’t say that this was an obviously accurate statement, but at the same time, I wouldn’t say that it was obviously proven to be false either. It’s somewhere in between, but it’s hard to measure that as well.
Rob [09:54]: I think we need to make more concrete predictions, because some of these are hard to gauge, you know?
Mike [09:59]: Yeah.
Rob [10:00]: So my second one was Twitter will become less relevant over the next year, returning to its roots, it’ll be journalists and technorati and it will be ripe for an acquisition. And this, of all the predictions I’ve made, perhaps over the past several years, this one I think was dead-on. And this was not – it’s obvious now that this is happening, but this was not on people’s radar a year ago. Twitter was still growing and people were on it and stuff. So I remember making this and thinking, “Boy, I’m kind of going out on a limb with this one.” And I’d say this is really accurate as we’ve heard lately with acquisition talks and failed acquisitions rumored, all types of stuff. So what do you think?
Mike [10:40]: I’ll admit. I thought that you were definitely going out on a limb on that one, but I’ve noticed that even I’ve stopped using Twitter nearly as much in the past 12 months as I have in the previous couple of years. So it’s interesting to see that. It’s not something I would have expected, but anecdotally from my own experience, I’ve used Twitter a heck of a lot less this past year than I have in the previous couple of years.
Rob [11:00]: And you’re not alone. You said growth is basically mostly flat-lined and the revenue is not growing as fast as people want. It’s still growing but the stock market doesn’t love the growth and then, like I said, there have been acquisition rumors that have fallen through. So I think I nailed it on this one.
Mike [11:18]: My third prediction was that there’d be fewer IPOs and more acquisitions in the tech space. And I also felt like there’d be more stagnation from the unicorn companies. And if you look at some of the classic unicorn companies like Airbnb and Dropbox, they still obviously exist and there’s nothing wrong with them – at least it doesn’t seem to be in terms of their business model – but they don’t appear to be doing anything radically different and they’re definitely not on the same growth trajectories that they used to be. It seems like they’re still growing but not nearly at the rates that they were before. And I’m not seeing anything new from them. I am seeing that they’re going through and acquiring certain technologies or other companies that will help augment their services, but there’s nothing so dramatically new there. I also haven’t seen very many tech IPOs this past year, but there have been acquisitions as well. So those acquisitions have continued to happen. Drip is an example of one of those things. You didn’t go IPO with that, but I don’t think you ever really had intended to do that either, but there was that acquisition and then there’s other companies out there that have been acquired in the past 12 months as well and it’s – I would say that this is probably more accurate than not. But again, like you said earlier, it’s hard to quantify because we haven’t really put any sort of benchmarks on these.
Rob [12:30]: My third prediction for 2016 was that public markets would continue to value companies lower than their private valuations. And what was going on at the time was that folks were raising these funding rounds from venture capitalists and the good companies were getting these really high valuations and then they would go public, and their per share price would actually be lower than their most recent round. It was like going public was a down round. And from what I’ve seen this year, it has continued to be that. I think there was a big hit. You know remember, we made these in November, December last year and there was a massive hit, especially to SaaS, to B2B and SaaS valuations last January, where I think SaaS valuations were right around seven times annual revenue and they were cut to about 3.3 within a two-week span in January. Now they’ve since recovered and they’re up in the – let’s say between four and six range, depending. But there has continued to be – I’d say this has continued to be accurate. This is something that was already playing out in 2016. I wouldn’t even venture to say what’s going to happen in 2017. It depends a lot on what the public markets do. But it’s an interesting twist in that if you looked 5 or 10 years ago, and especially even 15 years ago, during the .com boom, the public valuers were always higher than private, because that was the scale up, is that you’d raised your series A, your B, maybe a C – and then you go public and you’d get this big bump whereas people who were, you know, even as of last year, people who were in on the last round of investment were basically losing money when the IPO happened. So it was this interesting frothy market.
Mike [14:02]: So my fourth and final prediction last year was that drone technology was going to take a serious step forward based on the FAA regulations for registering drones over eight ounces. And I look at the technology itself and it feels to me like things have come a long way. Now I don’t know really whether that was driven specifically by those new regulations, but if you go look at toy magazines for example, or websites where they have drones as like a peripheral thing, not necessarily – you don’t want to go to a drone website where all they sell is drones, because obviously that’s – it influences in the wrong way. But if you look at things like, for example, a Target newsletter or a weekly flyer or something like that, you will see small drones in there that you really didn’t before, and they’ll have several different variations of them. So I do think that the technology has taken some serious steps forward – whether it’s directly influenced by those regulations, I don’t know for sure. My suspicion would be yes, but it’s hard to say definitively that that was exactly the reason. But I would say that this was relatively accurate.
Rob [15:00]: My fourth and final prediction for last year was that virtual reality would be a hit with the early adopters set in 2016. And I would say this is not accurate. I think it’s still too early. I just think we haven’t hit that. Even with early adopters, I know there’s a lot of headsets coming out and there’s AR fighting VR, and it’s a really interesting space to watch. But it still feels like early days and I definitely wouldn’t call it a hit yet. I wonder if in the next – it’s kind of hit eventually, right? So in the next 12 to 18 months I think things will go. But definitely didn’t happen as quickly as I had imagined.
Mike [15:40]: So those are our 2016 predictions. Why don’t we go into our 2017 predictions? Rob, why don’t you kick us off?
Rob [15:46]: So my first prediction for 2017 is that there will be another high-profile acquisition in the bootstrapped space. And by another, I mean, Drip being one that happened this year that is an example of our little community that started with a few bloggers and you and I talking on a mic and then getting 100 people together in a room in Vegas in 2011 has really grown, and not only in size but just in the apps we’re building and the impact we’re having both on our lives individually, on each other with all the masterminds that come out of the community that we built, as well as the apps that are coming out of it. And they’re becoming higher and higher profile, and so I’m going out on a limb and I’m saying that there’s going to be another – when I say high profile, I don’t mean a technology sale of a web app for a 3.5 times annual net. I mean another one that’s a big funded company or a larger company buying someone that we know – that we know by name in the Microconf circles, in our podcast circles, and folks who we’ve talked about in the past on the show. And I don’t know of anything that’s coming specifically or I don’t know specifically who it’ll be, but I have a few ideas and it’s just some potentials.
Mike [16:52]: Bottom line you’re saying you’re not cheating with insider information.
Rob [16:55]: Exactly. That’s what I’m trying to clarify here. This really is a prediction and not just me gossiping about rumors that I’ve heard or anything.
Mike [17:03]: Sure.
Rob [17:04]: How about you?
Mike [17:04]: Well, my prediction for 2017 is that health insurance rates are going to become a much bigger issue for self-funded companies. And I’ve heard talks quite a bit about this over the past – I don’t know, maybe three to six months I’d say – where people are starting to ask more questions from the bootstrapped community. And I think that this coming year it’s going to become a much bigger topic, just because the way the election went and there’s all these questions and uncertainty moving forward. And the reality is that if you look at the health insurance rates for a self-funded company if you’re self-funded, you’re running the business, and you’re the only employee, for example, you have very little data to go on in terms of what other people are paying for health insurance and what’s common and what’s not. So there’s all this obscurity around what should you be paying for your health insurance and what is normal? And I think that as people get more comfortable asking those types of questions, that’s going to come up – and I think it’s going to become a much bigger issue in our circles for people – not just in what it is that they’re paying but who they’re using and what’s common, what’s normal, and quite frankly – do they even need it? Are there other ways that you can go about solving this particular type of problem for yourself and for your family that may not necessarily be options for – I don’t want to say mainstream people, but for people who are W2 employed for like a large company. Are there other options that people in our circles are going to come up with that are helpful and useful in that specific situation that would not be generally applicable outside of that situation?
Rob [18:35]: And I would say this is already an issue today. So you’re saying it’s going to get worse?
Mike [18:41]: I’m saying that it’s going to get worse and it’s going to get talked about. I think that previously –I’ve seen a few talks about it here and there, and I’ve seen some conversations happening here and there, but I think that those types of conversations are going to become more mainstream in our circles, just because the sheer cost associated with paying for your own health insurance is starting to rise dramatically – and I’ve noticed this myself with my own insurance, where from one year to the next I might be paying $3-400 a month in addition to what I was paying before, which that can be easily 30-40%. And you look at that and you say, “Well, okay, what other options do I have here?” What I’ve seen is that some of the insurance companies, they’ll just jack up to your prices until they get to a point where you’ve decided that it’s no longer worth it for you to have insurance through that company, and then you’ll go to some other company. And I think what they’re doing is they’re essentially price testing on their own customers to see who’s going to tolerate those price increases and who’s not, and using the knowledge of their current customers to help them basically extract more money out of their customer base. And if a bunch of them cancel, so be it. If they don’t, well, that’s fine, they’ll get the extra money, and then they’ll kind of adjust that. But because not everybody’s health insurance renews on the same month of the year, they’re able to do that on a monthly basis – and essentially I feel like they’re price testing that month in and month out and adjusting their prices over the course of the year.
Rob [20:07]: And this is mostly a US only prediction, because a lot of the countries in the world take care of their folks and don’t let the insurance companies do what they do here. So my second prediction is that startup crowdfunding in the JOBS Act here in the states which allows non-accredited investors to invest through sites like Indiegogo, and they just launched this week – they’re crowdfunding. I’ve gone back and forth on this but I think I’m pretty confident that it’s going to fizzle out. It’s not going to have legs like Kickstarter and product crowdfunding has, where you do something and you get a product in the end. I think that people like to think about this idea of putting $100 into a bunch of different startups, and that that’s fun and exciting, and I think there’ll be buzz about it, but I don’t think it’s going to take off in any meaningful way. I think that like the good startups, and the best that are raising money are not maybe going to go to crowdfunding. That they have either the connections or they have the traction to get known angel investors and people on angel.co and institutional investors and that kind of thing, and that startup crowdfunding will probably be filled with a lot of noise. There’ll be some signal there but it’ll be people who basically can’t raise or aren’t able to raise through their network, and so it’s naturally – again, this is just my prediction – naturally going to be the lower end and the startups that are less likely to be successful.
Mike [21:29]: My second prediction is that the bar for building a SaaS is going to continue to become harder to reach. And I feel like there’s almost this tipping point that’s starting to happen, where companies are – instead of taking that approach where they go out and they do the customer development and do a lot of the upfront work that has traditionally been done to identify the market and the different channels you can use, and customer validation and all that, I feel like that is still a viable channel, but I think that people are going to start moving more towards the model of building a service around that offering first and offering more of a comprehensive, complete solution for people that’s all manual driven, driven by people on the backend, and then once they’ve figured out the market, transition into building software to kind of SaaSify the whole thing so that they can go mass market with it.
I’m starting to see this in a couple of different places, but I don’t think that it’s really become mainstream yet, but I think that this year we’re going to start to see a lot more of that because the risks associated with building a services company, I think, are dramatically lower than they are for building a SaaS where you’ve got this long development cycle upfront and then you start putting customers in it. And the funding that is required to do that type of thing is substantially more than if you were to build a services company where you’re charging people 500, 1000, 2000 dollars out of the gate, per customer – and yes, you’ve got a lot more cost behind it, but you’ve also got the ability to put in five customers, and that’s 10k in revenue – whereas if you have a SaaS offering and you put in 10 customers, you’re probably only getting like 5 or 600 dollars a month. And the revenue that is different between them is just – it’s dramatic. You can build a services based company like that very quickly, because you’ve got the revenue coming in. And well it’s very easy to make adjustments to the processes that people go through, but it’s much more difficult and much more time consuming to change a software package when you don’t have enough volume going through it to be able to justify or be able to clearly say, “Look, this particular piece,” or, “This feature needs to be changed,” or, “This feature needs to implemented.” You can change the processes much, much faster than you can change software, and I think that people are going to start to go in that direction and it’s partially due to the fact that that bar that people have as an expectation for how good a piece of software is when they first sign-on to it is so much higher now than it was two, three, five years ago.
Rob [23:50:]: So I actually think this is really already going on. This is the concept behind Brian Casel’s talk at Microconf here last year about productizing services. What are you saying that’s going to be different than what’s already gone on?
Mike [24:03]: What I’m saying is that we’re going to start to see a lot more of this type of approach, where people build – so like take for example, Brian Casel where he was talking about Audience Ops – and I think there’s a difference between just building a services-based company versus building a services-based company and then leveraging that into a SaaS product that you build as a follow-on for like the lower-end market that you’re not addressing because you don’t have the manpower and they’re not willing to pay that level. And I guess if you were going to point directly to Brian with Audience Ops, they’re coming out with the Audience Ops calendar. And that’s out on their website; you can go take a look at it, but they are moving in the direction where they have this Audience Ops process that they’re putting in place and they’ll do it for you as a service, but based on all the things that they’ve learned, they’ve said, “Okay, well, if we’re going to build a product out of this, how do we go about doing it and what needs to go into it?” They’ve already done all the customer development. They’ve learned all the different things that need to go into it, now they’re distilling it down into a software package that they can sell. That’s the model that I see coming to the forefront, where people will build the services company first and then build the product afterwards – as opposed to doing it the other way around or just going strictly on the software-only model.
Rob [25:12]: My third prediction for 2017 is that we’re going to see a correction in the US stock market and I think it’s going to be 20% or perhaps more. I’m not commenting on the broader economy. I don’t necessarily think that there’s going to be any type of recession or anything, but the stock market is averse to uncertainty, and that’s when the stock market does crazy things – goes up really fast or down really fast. And I think that if anything, our president elect, Trump, is someone who inspires uncertainty. I think some of the things that he’ll wind up doing over the coming year will probably have a negative impact on the stock market, and I also think that obviously it’s pretty obvious that interest rates are going to be coming up after historic lows and that always sends the stock market down as people come in and now put money into T-bills and other things that are going to pay higher interest rates. So I’m not one to have bearish predictions in general; I tend to like to have a positive outlook on things, but I for one I’m keeping my eye on the stock market and the economy as a whole, and thinking that we’re due for some type of correction, I think, that most people who follow the market would agree, that we’re probably pretty over-valued right now and that something needs to give there.
Mike [26:18]: My third prediction actually relates to that a little bit. And it’s not so much directly related to the stock market correction so much as it is about the uncertainty of the future. And I think that what we’re going to see, as a result of that, is that some of the more small-scale businesses or small-scale entrepreneurship is going to pick up steam, and I think related to that we’re also going to see a lot more of the small- scale entrepreneurial meet-ups around the world.
I think still Tiny Conf this past year is split out into three different locations. There’s the – there used to be just East and now there’s East and West and then there was the East, West and now there’s Europe. I think that we’re also going to start to see various meet-ups that are completely unrelated to those around the world as well. I’ve seen some start popping up over in Germany and in London, and I feel like this is the year where we’re going to start to see those types of things advertised a little bit more, and become much more common. Even two, three, four years ago, around here – like I only live an hour outside of Boston and I’m just not – I haven’t been seeing those types of things. And now I’m starting to see them. I’m starting to see them pop up even around where I live, which it’s interesting to see that because, yes, I live near Worcester which is I think it’s the second largest city in Massachusetts, but historically, there has not been a lot of activity around this particular space and I think that with the uncertainty that’s coming up, with the president elect, Trump, and all the other things, the interest rates going up, I feel like companies may very well start cutting back a little bit, and when those types of things happen, if companies start letting people go, there’s one of two things that usually happens with people that either leave their jobs – whether it’s voluntarily or not – they tend to either go back to college or they start their own business. And I feel like a lot more people are going to end up going out and starting their own businesses, because to them they’ve been working at those companies for a while, yes it’s been great but there’s starting to be a downturn and they say, “Hey, you know what? I’m a little bit too old to go back to school. I don’t want to. I’ve been down that road before. Let me go out and start my own thing, because I have the awareness or the knowledge of the different markets and confidence to go out and try my own thing.”
Rob [28:23]: As I said in the very first original micropreneur.com, reports that people could download – it was that Lead Magnet or opt-in reward – there has never been a better time in history to start a software company. And I think that’s continued. I wrote that in 2008 or 2009, and I still believe that today. My fourth and final prediction for 2017 is that the first package will be legally delivered with an unmanned drone. This will be somewhere in the world that I don’t think it’ll be in the US, due to the regulation, but I think some country in the world will not care and that a consumer package is what I mean, is someone paying for something. I know there’s already a disaster of the leaf drones where they maybe get medicine to places where the roads have been decimated by a flood or an earthquake or something, and that’s already going on. And in times of emergency, people are allowing that to happen. But I’m imagining someone either paying for something like from an Amazon or walmart.com or food – ordering food and having that delivered.
Mike [29:23]: I was just thinking tacos.
Rob [29:25]: Tacos is really good. And the reason I said legally is that there’s already been – there was a story two weeks ago in New Zealand where somebody took a drone, programmed it, and wrote and put a note on it and like a $10 bill and it flew down to this sausage store or like a butcher, I guess, butcher shop of some kind and it said, “Please, give me one pound of sausage.” And they put the change in an envelope and attached the sausage to the drone and then it flew back to the guy. And I think the cops sighted him. You’re not supposed to fly unmanned drones over people, you’re not supposed to fly them out of line of sight, and so it was there. So that’s why I’m saying the first packets actually legally delivered with an unmanned drone. And I do mean a consumer or a purchased product.
Mike [30:11]: I could definitely see this happening. I’m kind of with you. I’m not sure whether it would be inside the United States or not. My suspicion is not, but I could potentially see where they allow it in a particular test scenario or something along those lines. And so are you thinking that this would be something that is outside of a test scenario or outside of like tightly controlled circumstances?
Rob [30:32]: Yeah. I think that it’s going to be tightly controlled for the first year or two, period. I think that they’re going to basically program a drone to go do something and they’re not going to monitor it super closely, but that it’s going to be unmanned and not piloted. That it’s going to be programmed to do that.
Mike [30:48]: I don’t mean tightly controlled as in them not really paying attention to it, I mean tightly controlled as in, oh, they’ve got a government auditor on site watching the whole thing from beginning to end just to make sure that it works and nothing major goes wrong, and if it does then somebody can ask questions of that person. I mean more of a, they look at the laws that says that they can do it and then they just go do it. Does that make sense?
Rob [31:11]: Yeah, it does. I don’t know that it matters, whether there’s an auditor on site or whether – I don’t know. I think that if something’s delivered legally with an unmanned drone, whether the government is really active in that and it’s part of a pilot project, I think that fits the description of what I’m looking for. I think it’s similar. We can make another prediction about unmanned vehicles, right, about basically self-driving cars. I know they’ve – at least one state, maybe two, have kind of legalized them for test purposes, but I’m curious to see if we’ll start seeing any unmanned trucks or unmanned cars really starting to take shape here in 2017. I don’t have a prediction about it, but it’s definitely something we’re going to see unfolding here pretty soon.
Mike [31:53]: I think eventually, yes, but for the time being, I don’t know about that. I could see it being done on highways for like long haul stuff – I don’t know about inside of a city where you’ve got lots of things going on. I think that people would be a lot more hesitant about. But driving across the country a couple of thousand miles, I could definitely see stuff like that happening.
Rob [32:12]: Long haul trucking and stuff?
Mike [32:13]: Yeah.
Rob [32:14]: They’re saying that’s going to be disrupted pretty early.
Mike [32:15]: Well, if you have a question for us, you can call it in to our voicemail number at 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us on iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
