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In this episode of Startups For The Rest Of Us, Rob and Mike talk about how to dissect your business competitors. Gaining insight can help with validating an ideas and understanding the landscape. The guys give you 8 ways to better understand your competitors.
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Mike: In this episode of Startups for the Rest of Us, Rob and I talk about how to dissect your business competitors. This is Startups for the Rest of Us episode 404. Is this podcast not found?
Rob: What?
Mike: Is that what this episode is?
Rob: Why?
Mike: I don’t know. Because it’s episode 404. Come on! Give me the nerd joke.
Rob: Oh, sorry. I totally missed the prompt.
Mike: Come on man. Alright. Theme music.
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 just thinking about it. I’m Mike.
Rob: And I’m the guy that doesn’t know what 404 means.
Mike: And we’re here to share our experiences to help you avoid the same mistakes that we’ve made. How are you doing this week, Rob?
Rob: I’m doing pretty good, actually. Aside from missing that bump set that you just gave me at the top of the intro there, we have wrapped up our move. Sherry and I bought a house in Minneapolis, we decided to stick around for a few years. We’ve been renting for two years. Have I gone on my rant about how buying a home is like not a good financial decision? Have I done that?
Mike: You have not done that but I have seen various people say that.
Rob: Yeah. I won’t do that here. I’ll spare everyone, maybe in an after show at some point I’ll dig into that. But I realized that sometimes you make decisions that are not the best financial but you make it more for your life, your lifestyle, or your family, or really, we wanted more control of exactly where we lived. We wanted to live right around this lake in Minneapolis called Lake Calhoun. There are just very, very few rentals here, we have lived in one for two years. It was kind of a crappy house, it was fine but the landlord didn’t do much upkeep on it, I’ll put it that way.
Really, we just wanted more control. Also, didn’t want to ever be like, “Hey, we sold the house. You guys have to move in 30 days.” you know that type of thing because we know that would have happened at the worst possible time. It wouldn’t happen when I’m totally off and not working. It would happen right in the middle of me starting a new startup or something.
Anyway, it’s all I have to say, we bought a house, we’re just one block away from where we lived before. Got the keys on a Friday, packed or showed up on Sunday, moved or showed up on Monday.
Of all the moves we’ve done, it was by far the most seamless and least stressful. It really helped neither Sherri and I really worked very much last week, and so we’re almost unpacked. We’re also motivated by our packers. They gave us two prices; one was to pack into cardboard boxes where you have all the waste and you have to get rid of it or to pack in these plastic reusable tubs that they take back and you basically just rent it for the move. The fact that you only have them for a few weeks, it was just motivational like, get those things returned and get the whole house unpacked quickly.
Mike: That’s cool. I’ve always had to move myself. I haven’t moved in more than 10 years at this point. It’s been close to 13. I don’t look forward to ever moving again. It’s one of those things where—I know at some point we’ll probably have to—but I just don’t feel like it at the moment.
Rob: It’s not fun. It’s a short-term pain for what could be a long-term gain. In our case, now that we’re in this house that’s larger, closer to the lake, we like it more, it’s newer, just all of these things. It was totally worth it but yeah, coming up to it I was just filled with anxiety, “Oh, god. This is going to be such a terrible experience,” because so many of them have been in the past. We used to move ourselves. When Sherri got the job in Fresno, they paid to move us across the country, and then obviously, Leadpages, they offered for anybody on the Drip team to move here.
Now that we’ve done it a few times and paid someone to do it, it would be hard to go back especially we have three kids. There’s a lot of moving parts in it, I can imagine. Even packing our stuff at this point will take a couple of weeks. It’s not ideal. We could obviously do it if we need to, we’ve done it before, but it really does help to reduce the stress of the move knowing that in one day they’re going to come and it was three guys showed up and in seven hours they’ve packed our whole house. It’s crazy how fast they are.
Mike: Well, because they don’t care because none of the stuff is theirs. It’s easier for them to just throw out stuff in a box because they’re not like, “Oh, I’m going to reminisce about this for a few minutes or talk to so and so, have a conversation about it.” because you’re going to procrastinate to some extent because you don’t want to move because it sucks.
Rob: Totally.
Mike: They’re just going to go in, get the stuff done, get it taken cared of. They also don’t necessarily need to worry as much about like, “Oh, this item here, I want that in the new living room,” versus right now it’s in the dining room, they just throw it in a box.
Rob: Right, they just throw it in the box. To tell you the truth, the other things that made it really less stressful than it used to be—aside from the Minneapolis move—we were in Fresno for seven years, I believe. Something that’s different now is we got in this house and it’s like, “Oh, the doorbell doesn’t work. Well, I’m going to need to go get a doorbell. I need this halogen lamp that burned out in here and I’m certain it’s some specialty halogen lamp so I don’t have that. This towel rack is broken.” there’s just a bunch of stuff.
In general, the house is in great shape but there’s little things, those little things tend to bother me. I don’t have to drive all over town doing that. I jump on Amazon, I order it. I probably spent $300 in the last week on little knick-knacks and parts and things that used to be a 3-hour drive all around town to find all these things. Now, it shows up in 48 hours. It really kind of reduces the time commitment of this move because I’m able to add on an ongoing basis. Then, of course, I would have driven around, I would’ve found the halogen, come home, put it in, and the next day notice something else, so then I would’ve driven around again. It reduces the need to waste time which I think is good.
The other thing—and then I’ll stop talking about the move—is changing addresses is way easier than it used to be. Eight, ten years ago, I used to call everybody. I would have this huge list of our credit card companies and all the stuff, and I would call the 800 numbers, you wait on hold, you change the address. Now, I just went through LastPass and I looked through all of our accounts. We also have a list, there’s a few alumni associations or whatever that I don’t have accounts for but it was so much faster. It probably took me 90 minutes. I was able to do it without talking to anybody on the phone, I was listening to some music, and just hammering through different tabs in Chrome to be able to change them all. I don’t know, I think life’s a little better than it used to be.
Mike: Cool.
Rob: How about you? What’s going on?
Mike: Not a lot. Just kind of keeping track of the MicroConf Europe tickets, they’re going on sale. We’ve released those to FounderCafe members and then we went out to a second round for the previous attendees for MicroConf. I think by the time this episode goes live, the next round of tickets is just going to be available. This episode go live on Tuesday and then the following is when it will go out to the early bird list. If you’re interested in meeting up with us in Croatia and 120-150 other entrepreneurs, go over to microconfeurope.com, sign-up for the mailing list. As long as you do that on Tuesday before the email goes out on Wednesday, you should be able to get into that. We’ll send out the links and you’ll be good to go.
Rob: Sounds good. It’s going to be a good time. What are we talking about today?
Mike: Today, we’re going to be talking about how to dissect your business competitors. I’ve done this—I’ll say somewhat ad hoc—over the years where I’ve been talking to somebody and the conversation would come up about who their competitors are and how big they are and how well they’re doing.
There’s some several rules of thumb that I learned from the VP of Marketing at Pedestal Software back 12-15 years ago. He basically laid out, he’s like, “Oh, well, this is how I go about doing it.” so we just got to talking and he talked about revenue, how you look at the number of employees, and all these different things. I’ve kind of had these things in my head for a while. What I did was I’ve put them down into a list and walked thru how you can go through and analyze how big a competitor is, and how much, I’ll say, strength or resources they have to bring to bear on a particular problem in their space or to turn around and crush you.
If you’re looking at a market and you’re trying to figure out, should I even go in here or not? Is there a valid business here just knowing that there is another business in that space is a good data point but knowing the specifics and being able to drill into those, it’s good to know how it is that they make their money, and how you can do it as well. Because what you don’t want to do is you don’t want to go into a market and decide to do things in a completely different way without any justification. If something is already working well, especially if it’s an entrenched competitor, they’ve been there for a while, and the industry is already used to operating in that way, then you can come in and do kind of the same thing but you have to know what the lay of the land is, how things are currently working in order to be able to make it successful for yourself.
Rob: Why is it important to do this? What are the benefits that you get from learning all these information that we’re going to talk about a competitor?
Mike: This is a way to basically go partly through the validation process. If you already have a product for example, and you want to know like, “Are there other people in an adjacent market that I could serve?” Looking at one of your competitors who already serves that market would be a good way for you to decide whether or not you should go into that. If so, how you would position yourself in the market to them. Obviously, there is low-end, there’s mid-tier, and then there’s higher-end like enterprise level sales, there’s B2B, B2C—all these different things that you can talk about or look at in terms of the business—just knowing where all of the different pieces are is going to help you figure out where to position yourself. It’s partly about market validation but it’s also about being able to position yourself in the market and explain to people why it is that they should buy from you.
Rob: Yep, that makes a lot of sense. I also think it can help you perhaps know the […] economics or the profitability potential of the business. Because if you find out the revenue is $5 million and they have 10 employees, that’s probably a very, very profitable business and easy to run. You can think to yourself, “Oh, I can do it with only 10 employees.” or, “I should keep my headcount down if I’m going to be a similar business model.” Versus if they’re at $5 million and they have 100 or 200 employees it’s like, “It’s a very labor-intensive company. Do I even want to get into this business? Or, “Are they just hiring out ahead of growth?” and you can listen to that.
If they’ve raised funding, you know how much they raised, and you know they’re at x million in revenue and these many employees, you can back-of-the-napkin calculate their burn rate, and you can back-of-the-napkin calculate when they need to start raising another round or if they’re going to run out of funding or that kind of stuff. I think the more of these things that you learn—and we’re going to talk about revenue and target customer type and other things—it just helps you get that mental map of the landscape. You don’t just do this for one competitor, you do it for four or five of your closest competitors, and you put it all up on a whiteboard or in a doc and you start to get this understanding of the landscape and how they think about things. Let’s dive into the first one.
Mike: The first one is trying to figure out how much revenue they make. There’s a couple of back-of-the-envelope calculations you can do for this and it does depend greatly on the industry. For example, with a software type business, most of those types of businesses tend to make somewhere between $150,000 and $200,000, that’s kind of like the, I’ll say, the average range but there are certainly exceptions to that. If you look around, there are companies like Apple, and I think, Balsamiq and several others that have been public about what some of their numbers. But you can get up above $200,000 in revenue per full-time employee. You have to remember that’s revenue, not profit and that’s per full-time employee.
Usually, you can do a back-of-the-envelope calculation to figure out how much money a business is making based on the number of employees they have. If it’s a software company, they probably make somewhere between $150,000 and $200,000 per employee. You say, “Okay, well, just quick math on that, $1.5 to $2 million.” That’s not exact, obviously. There’s a range there and it could also be much lower. They could be making $100,000 per employee or they could be making $250,000 or $300,000 per employee. That also depends a lot on whether or not they’re funded. We’ll talk about some of those things but just a raw calculation, that gets you in the ballpark but, it’s by no means, exact. You have to make sure you bear that in mind. It is not exact at all.
In terms of the industry, it can vary greatly from there. I have a friend who’s in the oil industry and we got to talking about this exact same topic. I kind of gave him that ballpark estimate and he’s like, “You’re off by a factor of 10.” I was like, “Well, why is that?” He’s like, “Because in the oil industry, we sell based on margins and we have to sell a lot more. Our margins are much lower. Basically, you have to multiply by 10 in order to get the revenue.” and then their profit is basically what they support their employees on. It was 9x off.
Rob: Right. Because their profit margins are so slim that they have to make a way more revenue. That’s the thing, we should probably stick to online businesses when talking about this, bringing up the oil example is fine but we should clarify that we’re really talking about startups. Even physical e-commerce is tough because I know someone who runs a $2 million or $3 million e-commerce business but the net margin on that is 10-15%. You can imagine, they couldn’t support 30 employees on that because you just don’t make enough. I think we’re talking more about software companies.
Mike: Yep, I agree. I brought up the oil example just to point out that when you get into physical goods, like with software, your profit margins tend to be 90% or upwards of 90% but with something like selling oil, for example, you sell oil at $2 per gallon, your actual profit on that is only ¢10 or ¢20. That ¢10 or ¢20 is what comes back into your business and you can use that to support your employees. That’s why my back-of-the-envelope calculation was so far off by a magnitude of 10 when I was talking to that guy who’s an executive in the oil company.
Just keep in mind, physical production costs really eat into that, and your revenue will be substantially higher or their revenue will be substantially higher because of that but it doesn’t necessarily translate to profit and […].
Rob: Yeah. This is the formula, the 100k-200k per employee that I use in my head just when I ballpark things. As you said, there can be outliers. You can have some startups will be five people and they’re doing $5 million or $10 million, and they’re super profitable. Then others that have raised funding are the exact opposite. They’re doing 200k in ARR–Annual Recurring Revenue and they have 20 employees because they’ve staffed up. It can be skewed but this is for a—when I think of it—it’s like a bootstrapped and profitable or even funded but kind of well-run and capital efficient company, I think this is a reasonable number. If someone is growing really fast, this number can get skewed in one direction or another. As you said in the outline here, you have early-stage or pre-employees where it’s just founders, it’s pretty much guesswork. Unless, you hear them comment in a podcast, or in a blog post, or they posted it live on Baremetrics or something, it’s just pure guesswork at that point.
Mike: The second thing to look at is their target customer type. To do this, you can look at their pricing and specifically who they are targeting. By who they are targeting, there’s two different classifications. Generally, it’s either B2B or B2C, and within B2B, there’s several different levels; there’s the high-end enterprise, there’s the small-medium business market, and then there’s the professionals, so freelancers, various small agencies, or partnerships–things like that. I would throw prosumers in there as well. Those are people who are professional freelancers but maybe they do it on the side or it’s something that they are interested in but they don’t necessarily gain their full time living from it.
Then B2C, it’s something like a mass market where you’re trying to sell one of every single thing to every person on the planet. Then there’s well-off individuals or trying to sell the families or pro-hobbyists sort of prosumers. Those are the two general classifications; B2B and B2C and then within each of those you have to also be aware of what type of customer they’re selling to. That’s mostly a function of price but again, it depends on what it is they’re selling, whether it’s a software, or digital asset, or a physical product.
Rob: I think pricing is a big indicator here and then just with their marketing–look at their headlines, look at their copy, look at their colors and their design. I was thinking, what’s a mobile phone company that really caters to the youth these days? They’re going to have a different logo. Is Boost Mobile still around or am I totally dating myself?
Mike: I don’t know. I don’t think so. I think they’re part of, I don’t know, the one with the purple logo.
Rob: Yeah, exactly. This is great radio here. Sorry folks. Some brand like that that’s targeting kids in college is going to have a very different language and very different logo than salesforce.com–that’s B2B enterprise, all that stuff. You can get a feel from that if they’re positioning themselves well and then price, of course, is a big deal.
When I was first trying to figure out pricing for Drip and I was really agonizing over it. I went out to all the competitors that I knew about and I put it all in a single doc of what everyone’s pricing was. All the grids and I was just trying to analyze it. It really helped me get a feel for where we should land that as a new startup that’s launching. Of course, pricing is tough, it’s always a lot of guesswork but it gave me a really clear picture of again, the landscape.
What was interesting is that I returned back to that doc every six months or so, and so many of the prices were just dramatically different. The people had different tier levels, some had raised prices, some had lowered prices, some had raised them on the low-end, lowered them on a high-end. It was really interesting to watch that over time. I updated it a few times and did a snapshot over time but it is fascinating if you watch competitors and make it, every 60 days or every 3 or 4 months, go into this group and whether you have a VA do it or do it yourself, then just take another snapshot of their pricing and you can watch how stuff shifts over time in a space.
Mike: The next thing to look at is what their sales and acquisition channels are. There’s a few different categories. Obviously, there’s online which includes either website, their content marketing, advertising, email list, etc, and then there’s offline channels which are much, much more difficult to find and analyze the effectiveness of. The things like trade shows, physical mailings, relationships and partnerships that they’re leveraging, if they have a brick and mortar store, there’s obviously heavy infrastructure cost and logistical cost of just getting products to those.
Again, we’re probably going to lean away from the physical product side of things but you can imagine that with offline channel such as a trade show, how do you know how many customers they’re getting in contact with, or what their cost to acquire those customers. You can guess based on what it costs to attend the trade show. You could go to some of them, like a competitor, let’s say they go to trade show x and you go to trade show x and say, “Hey, can I see your sponsorship rate card?” You look through that, figure out what sponsorship level they went in on and then figure out how many people they probably sent. If you are at the trade show then it makes obviously, that easier because you can just go up to those people and ask them questions. But you can get a sense of what their marketing budget is like based on some of the different things that they do.
Obviously, trade shows are easier to calculate but if they’re doing physical mailings, it’s really hard to get any insight there because you don’t know how they’re getting their list, what they’re paying for it, or the effectiveness of it. All that stuff is going to be, very much siloed inside their company. It’s going to be much harder for you to figure out, not just how much money they’re spending on it, but whether or not it’s effective.
Rob: You know, one way to also get an idea is to use an online tool to look at your competitors’ keywords that they rank for, to look at ads they’ve run or are running. There are tools like Spyfu and ahrefs.com which you can type in a competitor website and it’ll give you a good idea of what they rank for, and what the terms are, and how much traffic potentially. It’s all estimates but it gives you some idea.
Then, just to get an idea of their top-level traffic like, “How many uniques do we think they get?” I used to go to compete.com but that shut down and so now, I’ve really been using rank2traffic.com. There is another one—I can’t think off the top of my head—but what I did is I searched for compete.com competitors or replacements and there’s actually a Quora thread where folks named a bunch of them and I tried 10 of them, and Rank2Traffic and another one was I felt like had at least the best guesses.
Again, these can be off by a factor of two or three in either direction. It is a bummer but at least it gives you some idea. Sometimes you’ll put in a competitor and it’ll just say, “Not enough traffic to list here.” It’s like, “Oh, they’re probably getting less than 5000 uniques.” That’s not a major channel for them most likely.
Mike: The next thing to look at is the type of products they’re offering. We’re going to neglect the physical product side of the equation and focus on digital products. But even within digital products, you’ve got things like software, you’ve got courses, all sorts of things that fall under that digital category. There’s going to be support costs differences for them, and engineering, and research and development costs that are radically different.
If you have a course, for example, the support cost on that is way, way less than they are for a software product. Just because with software products, you have to train and educate people versus a course that is the whole goal of it.
In addition with most software products, you’re going to have to offer some sort of ongoing support. If it’s a SaaS application, that is a monthly ongoing support that you’re offering but with training courses, if there’s a bug or a problem in it, you typically fix it and roll out the new version to everybody and that’s it. You don’t have to continually update it–at least in terms of fixing things inside that. It doesn’t mean you can’t offer a new version of it or an updated version for 2018 versus 2016 but the length of the time that you’re going to be spending doing support and offering any sort of warranties or bug fixes or anything like that is dramatically lower for a course than it is for a SaaS product.
Rob: Another thing that you can look at is the length of time they’ve been in business. Older businesses do tend to be more stable without massive revenue fluctuations, they also tend to be in the software space slower. They’re slower to release features. There’s a lot of opportunity when competing against older businesses that have gotten kind of big and bloated.
Newer businesses can obviously have a lot more revenue swings or faster revenue growth in terms of percentage wise, but they can be harder competitors for you to compete against because a lot of times, if you’re just a team of one, two, three people, your advantage is that you can move quickly and you can take refugees from those older, larger companies. I think there’s a lot of opportunity. It was the playbook of Drip–that we were the young upstart, and we were smaller but we were shipping features so much faster than a lot of our competitors. It was kind of easy pickings against companies that had been around for 10 years and had a bunch of legacy.
That’s the thing with oil companies, or paper manufacturing–kind of typical brick and mortar businesses. If you’re 50 years old or 100 years old, you have a brand name, you can be entrenched in a space but if you’re a software company that’s 10 or 15 years old, you are very likely to have a ton of legacy code, and your software is very likely to not be as good as software that was built today. It is this kind of inverse thing where, older companies will have a lot of revenue, and they have a lot of momentum and they’ll have a lot of brand, there tends to be a pretty good factor to get in there as an upstart and make some traction.
Mike: Just to kind of tackle on or clarify a little bit of what Rob is saying because I don’t want people to misunderstand him based on exactly what he said. But when he said that the new businesses tend to have a better code, it’s not like the ones and zeroes are any better, it’s really just that they have basically, honed in on exactly what it is the customer wants in terms of the minimum stuff that needs to be built versus the businesses that have been around for a long time.
It’s just so much harder for them to make a change even if it would be better for their customers because they have to take into consideration the existing customer base. If they make a large change to the frontend of their product and they suddenly alienate 30,000 customers, it’s really bad for them. That’s just going to make massive problems for them and support headaches. They’re going to choose to not make those changes even though they could and they have the resources to.
Rob: Yeah, that’s right. There’s legacy customer stuff. That’s what you’re talking about if you can’t make a change, and then there’s legacy code stuff. When I think of how much better software development practices have gotten over the past 15 years with extensive unit testing, the frontend integration testing, and the agile development methodologies–the software I was writing and working on 15 years ago was harder to maintain. Maybe that’s not across the board and maybe that’s not for everyone, but that software, we could not ship features nearly as fast because the software didn’t have unit tests and it was more crafty–it was all these things. These days I believe the practices, they’ve gotten better. I think software these days is easier to work on assuming that you have knowledgeable people who are using the right engineering practices and aren’t just hackers throwing stuff at the wall on a weekend or something.
Mike: The next thing you look at is the company leadership and how that is structured. If they’re self-funded, the founders tend to be in those company leadership positions. If it’s angel or VC funded, the founders may be there still in the executive capacity or they may have put into more of a director role and they brought in professional CTOs or CEOs, for example. It depends on how far along they are.
If it’s a established business that’s been around for 10, 15, 20 years then who knows what that looks like but it also gives you an indication of what things are going to change in the future. They just brought in a new CEO or they just got a round of funding, for example, that dramatically changes what the future vision for the company is going to look like.
Those are just, again, just data points that you can look at but it helps you to understand how quickly is this company going to change direction and are they likely to change direction? If the company’s been doing their business exactly the same way for the past five years, chances are good they’re probably going to do that for at least the next year or two but there’s no guarantee.
Rob: You can go to Crunchbase for this. You can signup for Google alerts on the company names. I think that’s a good idea anyways. One thing I’ll caution as we’re talking through this is, I have been in environments where people were way too fixated on what are competitors are doing. “Oh, they just shipped this thing. Oh, they just raised this round of funding.” I was like, “This stuff is good to know but this is not make or break. You should be focusing way more on your customers than on your competitors.” With that said, everything we’re talking about here is still good to know, to have an idea of the landscape, and to revisit it every—I would say in a startup environment—probably every month to three months if you’re in the early stage. But this is not something that everyday you should just be thinking about and trying to look and watch competitors and watch what they do because it just matters so much less. Unless you’re in a neck and neck race with your competitor, it’s just not a good thing to be overly fixated on what other people are doing.
I think another thing to look at is red flags or exceptions. These indicate potential problems or major changes that could be good or bad that a competitor is doing. If you hear about layoffs they’re doing, if there’s a quick change of leadership where the CEO was perhaps, asked to leave–anytime there’s a change of leadership you always wonder what happened; if they raised funding recently, they have new product announcements, all kinds of stuff. This is where you can again, monitor the email list, there’s people talking about any industry. If you’re in marketing automation and then there’s three or four people who are kind of the industry experts that you can be on their list or you can like I said, subscribe to Crunchbase updates or do Google alerts just to hear about what your competitors are up to.
Mike: The last thing you can look at to dissect your business competitors is to pose as a customer and try and find out how they treat their customers. There’s obviously some ethical questions that you have to answer for yourself here in terms of how far you’re going to go. Obviously, you can sign-up for a competitor’s products, you could just get on their mailing list, you could call or email their support and directly ask questions.
Posing as a customer gets a little dicey of course in terms of ethics and how far you want to go with that but each person has their own, I’ll say, line in the sand for that. Personally, I don’t think that I would go too far with that. I might look at their email list. What I don’t know is I would sign-up for a trial if I wasn’t actually interested in it though. But all of these gives you an idea of how they treat their customers and whether or not there are ways that you can position yourself to customers that are unhappy with their product or their service in order to make yourself more attractive to those customers that are leaving.
Rob: To recap, we had eight way to dissect your business competitors.the first was, look at their revenue. Second was target customer type. Third was sales and acquisition channels. Fourth was software versus courses. Fifth was length of time in business. Next was company leadership, then red flags and exceptions. Eight one was posing as a customer.
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Our theme music is an excerpt from We’re Out of 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. We’ll see you next time.
Rob: What?
Mike: Is that what this episode is?
Rob: Why?
Mike: I don’t know. Because it’s episode 404. Come on! Give me the nerd joke.
Rob: Oh, sorry. I totally missed the prompt.
Mike: Come on man. Alright. Theme music.
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 just thinking about it. I’m Mike.
Rob: And I’m the guy that doesn’t know what 404 means.
Mike: And we’re here to share our experiences to help you avoid the same mistakes that we’ve made. How are you doing this week, Rob?
Rob: I’m doing pretty good, actually. Aside from missing that bump set that you just gave me at the top of the intro there, we have wrapped up our move. Sherry and I bought a house in Minneapolis, we decided to stick around for a few years. We’ve been renting for two years. Have I gone on my rant about how buying a home is like not a good financial decision? Have I done that?
Mike: You have not done that but I have seen various people say that.
Rob: Yeah. I won’t do that here. I’ll spare everyone, maybe in an after show at some point I’ll dig into that. But I realized that sometimes you make decisions that are not the best financial but you make it more for your life, your lifestyle, or your family, or really, we wanted more control of exactly where we lived. We wanted to live right around this lake in Minneapolis called Lake Calhoun. There are just very, very few rentals here, we have lived in one for two years. It was kind of a crappy house, it was fine but the landlord didn’t do much upkeep on it, I’ll put it that way.
Really, we just wanted more control. Also, didn’t want to ever be like, “Hey, we sold the house. You guys have to move in 30 days.” you know that type of thing because we know that would have happened at the worst possible time. It wouldn’t happen when I’m totally off and not working. It would happen right in the middle of me starting a new startup or something.
Anyway, it’s all I have to say, we bought a house, we’re just one block away from where we lived before. Got the keys on a Friday, packed or showed up on Sunday, moved or showed up on Monday.
Of all the moves we’ve done, it was by far the most seamless and least stressful. It really helped neither Sherri and I really worked very much last week, and so we’re almost unpacked. We’re also motivated by our packers. They gave us two prices; one was to pack into cardboard boxes where you have all the waste and you have to get rid of it or to pack in these plastic reusable tubs that they take back and you basically just rent it for the move. The fact that you only have them for a few weeks, it was just motivational like, get those things returned and get the whole house unpacked quickly.
Mike: That’s cool. I’ve always had to move myself. I haven’t moved in more than 10 years at this point. It’s been close to 13. I don’t look forward to ever moving again. It’s one of those things where—I know at some point we’ll probably have to—but I just don’t feel like it at the moment.
Rob: It’s not fun. It’s a short-term pain for what could be a long-term gain. In our case, now that we’re in this house that’s larger, closer to the lake, we like it more, it’s newer, just all of these things. It was totally worth it but yeah, coming up to it I was just filled with anxiety, “Oh, god. This is going to be such a terrible experience,” because so many of them have been in the past. We used to move ourselves. When Sherri got the job in Fresno, they paid to move us across the country, and then obviously, Leadpages, they offered for anybody on the Drip team to move here.
Now that we’ve done it a few times and paid someone to do it, it would be hard to go back especially we have three kids. There’s a lot of moving parts in it, I can imagine. Even packing our stuff at this point will take a couple of weeks. It’s not ideal. We could obviously do it if we need to, we’ve done it before, but it really does help to reduce the stress of the move knowing that in one day they’re going to come and it was three guys showed up and in seven hours they’ve packed our whole house. It’s crazy how fast they are.
Mike: Well, because they don’t care because none of the stuff is theirs. It’s easier for them to just throw out stuff in a box because they’re not like, “Oh, I’m going to reminisce about this for a few minutes or talk to so and so, have a conversation about it.” because you’re going to procrastinate to some extent because you don’t want to move because it sucks.
Rob: Totally.
Mike: They’re just going to go in, get the stuff done, get it taken cared of. They also don’t necessarily need to worry as much about like, “Oh, this item here, I want that in the new living room,” versus right now it’s in the dining room, they just throw it in a box.
Rob: Right, they just throw it in the box. To tell you the truth, the other things that made it really less stressful than it used to be—aside from the Minneapolis move—we were in Fresno for seven years, I believe. Something that’s different now is we got in this house and it’s like, “Oh, the doorbell doesn’t work. Well, I’m going to need to go get a doorbell. I need this halogen lamp that burned out in here and I’m certain it’s some specialty halogen lamp so I don’t have that. This towel rack is broken.” there’s just a bunch of stuff.
In general, the house is in great shape but there’s little things, those little things tend to bother me. I don’t have to drive all over town doing that. I jump on Amazon, I order it. I probably spent $300 in the last week on little knick-knacks and parts and things that used to be a 3-hour drive all around town to find all these things. Now, it shows up in 48 hours. It really kind of reduces the time commitment of this move because I’m able to add on an ongoing basis. Then, of course, I would have driven around, I would’ve found the halogen, come home, put it in, and the next day notice something else, so then I would’ve driven around again. It reduces the need to waste time which I think is good.
The other thing—and then I’ll stop talking about the move—is changing addresses is way easier than it used to be. Eight, ten years ago, I used to call everybody. I would have this huge list of our credit card companies and all the stuff, and I would call the 800 numbers, you wait on hold, you change the address. Now, I just went through LastPass and I looked through all of our accounts. We also have a list, there’s a few alumni associations or whatever that I don’t have accounts for but it was so much faster. It probably took me 90 minutes. I was able to do it without talking to anybody on the phone, I was listening to some music, and just hammering through different tabs in Chrome to be able to change them all. I don’t know, I think life’s a little better than it used to be.
Mike: Cool.
Rob: How about you? What’s going on?
Mike: Not a lot. Just kind of keeping track of the MicroConf Europe tickets, they’re going on sale. We’ve released those to FounderCafe members and then we went out to a second round for the previous attendees for MicroConf. I think by the time this episode goes live, the next round of tickets is just going to be available. This episode go live on Tuesday and then the following is when it will go out to the early bird list. If you’re interested in meeting up with us in Croatia and 120-150 other entrepreneurs, go over to microconfeurope.com, sign-up for the mailing list. As long as you do that on Tuesday before the email goes out on Wednesday, you should be able to get into that. We’ll send out the links and you’ll be good to go.
Rob: Sounds good. It’s going to be a good time. What are we talking about today?
Mike: Today, we’re going to be talking about how to dissect your business competitors. I’ve done this—I’ll say somewhat ad hoc—over the years where I’ve been talking to somebody and the conversation would come up about who their competitors are and how big they are and how well they’re doing.
There’s some several rules of thumb that I learned from the VP of Marketing at Pedestal Software back 12-15 years ago. He basically laid out, he’s like, “Oh, well, this is how I go about doing it.” so we just got to talking and he talked about revenue, how you look at the number of employees, and all these different things. I’ve kind of had these things in my head for a while. What I did was I’ve put them down into a list and walked thru how you can go through and analyze how big a competitor is, and how much, I’ll say, strength or resources they have to bring to bear on a particular problem in their space or to turn around and crush you.
If you’re looking at a market and you’re trying to figure out, should I even go in here or not? Is there a valid business here just knowing that there is another business in that space is a good data point but knowing the specifics and being able to drill into those, it’s good to know how it is that they make their money, and how you can do it as well. Because what you don’t want to do is you don’t want to go into a market and decide to do things in a completely different way without any justification. If something is already working well, especially if it’s an entrenched competitor, they’ve been there for a while, and the industry is already used to operating in that way, then you can come in and do kind of the same thing but you have to know what the lay of the land is, how things are currently working in order to be able to make it successful for yourself.
Rob: Why is it important to do this? What are the benefits that you get from learning all these information that we’re going to talk about a competitor?
Mike: This is a way to basically go partly through the validation process. If you already have a product for example, and you want to know like, “Are there other people in an adjacent market that I could serve?” Looking at one of your competitors who already serves that market would be a good way for you to decide whether or not you should go into that. If so, how you would position yourself in the market to them. Obviously, there is low-end, there’s mid-tier, and then there’s higher-end like enterprise level sales, there’s B2B, B2C—all these different things that you can talk about or look at in terms of the business—just knowing where all of the different pieces are is going to help you figure out where to position yourself. It’s partly about market validation but it’s also about being able to position yourself in the market and explain to people why it is that they should buy from you.
Rob: Yep, that makes a lot of sense. I also think it can help you perhaps know the […] economics or the profitability potential of the business. Because if you find out the revenue is $5 million and they have 10 employees, that’s probably a very, very profitable business and easy to run. You can think to yourself, “Oh, I can do it with only 10 employees.” or, “I should keep my headcount down if I’m going to be a similar business model.” Versus if they’re at $5 million and they have 100 or 200 employees it’s like, “It’s a very labor-intensive company. Do I even want to get into this business? Or, “Are they just hiring out ahead of growth?” and you can listen to that.
If they’ve raised funding, you know how much they raised, and you know they’re at x million in revenue and these many employees, you can back-of-the-napkin calculate their burn rate, and you can back-of-the-napkin calculate when they need to start raising another round or if they’re going to run out of funding or that kind of stuff. I think the more of these things that you learn—and we’re going to talk about revenue and target customer type and other things—it just helps you get that mental map of the landscape. You don’t just do this for one competitor, you do it for four or five of your closest competitors, and you put it all up on a whiteboard or in a doc and you start to get this understanding of the landscape and how they think about things. Let’s dive into the first one.
Mike: The first one is trying to figure out how much revenue they make. There’s a couple of back-of-the-envelope calculations you can do for this and it does depend greatly on the industry. For example, with a software type business, most of those types of businesses tend to make somewhere between $150,000 and $200,000, that’s kind of like the, I’ll say, the average range but there are certainly exceptions to that. If you look around, there are companies like Apple, and I think, Balsamiq and several others that have been public about what some of their numbers. But you can get up above $200,000 in revenue per full-time employee. You have to remember that’s revenue, not profit and that’s per full-time employee.
Usually, you can do a back-of-the-envelope calculation to figure out how much money a business is making based on the number of employees they have. If it’s a software company, they probably make somewhere between $150,000 and $200,000 per employee. You say, “Okay, well, just quick math on that, $1.5 to $2 million.” That’s not exact, obviously. There’s a range there and it could also be much lower. They could be making $100,000 per employee or they could be making $250,000 or $300,000 per employee. That also depends a lot on whether or not they’re funded. We’ll talk about some of those things but just a raw calculation, that gets you in the ballpark but, it’s by no means, exact. You have to make sure you bear that in mind. It is not exact at all.
In terms of the industry, it can vary greatly from there. I have a friend who’s in the oil industry and we got to talking about this exact same topic. I kind of gave him that ballpark estimate and he’s like, “You’re off by a factor of 10.” I was like, “Well, why is that?” He’s like, “Because in the oil industry, we sell based on margins and we have to sell a lot more. Our margins are much lower. Basically, you have to multiply by 10 in order to get the revenue.” and then their profit is basically what they support their employees on. It was 9x off.
Rob: Right. Because their profit margins are so slim that they have to make a way more revenue. That’s the thing, we should probably stick to online businesses when talking about this, bringing up the oil example is fine but we should clarify that we’re really talking about startups. Even physical e-commerce is tough because I know someone who runs a $2 million or $3 million e-commerce business but the net margin on that is 10-15%. You can imagine, they couldn’t support 30 employees on that because you just don’t make enough. I think we’re talking more about software companies.
Mike: Yep, I agree. I brought up the oil example just to point out that when you get into physical goods, like with software, your profit margins tend to be 90% or upwards of 90% but with something like selling oil, for example, you sell oil at $2 per gallon, your actual profit on that is only ¢10 or ¢20. That ¢10 or ¢20 is what comes back into your business and you can use that to support your employees. That’s why my back-of-the-envelope calculation was so far off by a magnitude of 10 when I was talking to that guy who’s an executive in the oil company.
Just keep in mind, physical production costs really eat into that, and your revenue will be substantially higher or their revenue will be substantially higher because of that but it doesn’t necessarily translate to profit and […].
Rob: Yeah. This is the formula, the 100k-200k per employee that I use in my head just when I ballpark things. As you said, there can be outliers. You can have some startups will be five people and they’re doing $5 million or $10 million, and they’re super profitable. Then others that have raised funding are the exact opposite. They’re doing 200k in ARR–Annual Recurring Revenue and they have 20 employees because they’ve staffed up. It can be skewed but this is for a—when I think of it—it’s like a bootstrapped and profitable or even funded but kind of well-run and capital efficient company, I think this is a reasonable number. If someone is growing really fast, this number can get skewed in one direction or another. As you said in the outline here, you have early-stage or pre-employees where it’s just founders, it’s pretty much guesswork. Unless, you hear them comment in a podcast, or in a blog post, or they posted it live on Baremetrics or something, it’s just pure guesswork at that point.
Mike: The second thing to look at is their target customer type. To do this, you can look at their pricing and specifically who they are targeting. By who they are targeting, there’s two different classifications. Generally, it’s either B2B or B2C, and within B2B, there’s several different levels; there’s the high-end enterprise, there’s the small-medium business market, and then there’s the professionals, so freelancers, various small agencies, or partnerships–things like that. I would throw prosumers in there as well. Those are people who are professional freelancers but maybe they do it on the side or it’s something that they are interested in but they don’t necessarily gain their full time living from it.
Then B2C, it’s something like a mass market where you’re trying to sell one of every single thing to every person on the planet. Then there’s well-off individuals or trying to sell the families or pro-hobbyists sort of prosumers. Those are the two general classifications; B2B and B2C and then within each of those you have to also be aware of what type of customer they’re selling to. That’s mostly a function of price but again, it depends on what it is they’re selling, whether it’s a software, or digital asset, or a physical product.
Rob: I think pricing is a big indicator here and then just with their marketing–look at their headlines, look at their copy, look at their colors and their design. I was thinking, what’s a mobile phone company that really caters to the youth these days? They’re going to have a different logo. Is Boost Mobile still around or am I totally dating myself?
Mike: I don’t know. I don’t think so. I think they’re part of, I don’t know, the one with the purple logo.
Rob: Yeah, exactly. This is great radio here. Sorry folks. Some brand like that that’s targeting kids in college is going to have a very different language and very different logo than salesforce.com–that’s B2B enterprise, all that stuff. You can get a feel from that if they’re positioning themselves well and then price, of course, is a big deal.
When I was first trying to figure out pricing for Drip and I was really agonizing over it. I went out to all the competitors that I knew about and I put it all in a single doc of what everyone’s pricing was. All the grids and I was just trying to analyze it. It really helped me get a feel for where we should land that as a new startup that’s launching. Of course, pricing is tough, it’s always a lot of guesswork but it gave me a really clear picture of again, the landscape.
What was interesting is that I returned back to that doc every six months or so, and so many of the prices were just dramatically different. The people had different tier levels, some had raised prices, some had lowered prices, some had raised them on the low-end, lowered them on a high-end. It was really interesting to watch that over time. I updated it a few times and did a snapshot over time but it is fascinating if you watch competitors and make it, every 60 days or every 3 or 4 months, go into this group and whether you have a VA do it or do it yourself, then just take another snapshot of their pricing and you can watch how stuff shifts over time in a space.
Mike: The next thing to look at is what their sales and acquisition channels are. There’s a few different categories. Obviously, there’s online which includes either website, their content marketing, advertising, email list, etc, and then there’s offline channels which are much, much more difficult to find and analyze the effectiveness of. The things like trade shows, physical mailings, relationships and partnerships that they’re leveraging, if they have a brick and mortar store, there’s obviously heavy infrastructure cost and logistical cost of just getting products to those.
Again, we’re probably going to lean away from the physical product side of things but you can imagine that with offline channel such as a trade show, how do you know how many customers they’re getting in contact with, or what their cost to acquire those customers. You can guess based on what it costs to attend the trade show. You could go to some of them, like a competitor, let’s say they go to trade show x and you go to trade show x and say, “Hey, can I see your sponsorship rate card?” You look through that, figure out what sponsorship level they went in on and then figure out how many people they probably sent. If you are at the trade show then it makes obviously, that easier because you can just go up to those people and ask them questions. But you can get a sense of what their marketing budget is like based on some of the different things that they do.
Obviously, trade shows are easier to calculate but if they’re doing physical mailings, it’s really hard to get any insight there because you don’t know how they’re getting their list, what they’re paying for it, or the effectiveness of it. All that stuff is going to be, very much siloed inside their company. It’s going to be much harder for you to figure out, not just how much money they’re spending on it, but whether or not it’s effective.
Rob: You know, one way to also get an idea is to use an online tool to look at your competitors’ keywords that they rank for, to look at ads they’ve run or are running. There are tools like Spyfu and ahrefs.com which you can type in a competitor website and it’ll give you a good idea of what they rank for, and what the terms are, and how much traffic potentially. It’s all estimates but it gives you some idea.
Then, just to get an idea of their top-level traffic like, “How many uniques do we think they get?” I used to go to compete.com but that shut down and so now, I’ve really been using rank2traffic.com. There is another one—I can’t think off the top of my head—but what I did is I searched for compete.com competitors or replacements and there’s actually a Quora thread where folks named a bunch of them and I tried 10 of them, and Rank2Traffic and another one was I felt like had at least the best guesses.
Again, these can be off by a factor of two or three in either direction. It is a bummer but at least it gives you some idea. Sometimes you’ll put in a competitor and it’ll just say, “Not enough traffic to list here.” It’s like, “Oh, they’re probably getting less than 5000 uniques.” That’s not a major channel for them most likely.
Mike: The next thing to look at is the type of products they’re offering. We’re going to neglect the physical product side of the equation and focus on digital products. But even within digital products, you’ve got things like software, you’ve got courses, all sorts of things that fall under that digital category. There’s going to be support costs differences for them, and engineering, and research and development costs that are radically different.
If you have a course, for example, the support cost on that is way, way less than they are for a software product. Just because with software products, you have to train and educate people versus a course that is the whole goal of it.
In addition with most software products, you’re going to have to offer some sort of ongoing support. If it’s a SaaS application, that is a monthly ongoing support that you’re offering but with training courses, if there’s a bug or a problem in it, you typically fix it and roll out the new version to everybody and that’s it. You don’t have to continually update it–at least in terms of fixing things inside that. It doesn’t mean you can’t offer a new version of it or an updated version for 2018 versus 2016 but the length of the time that you’re going to be spending doing support and offering any sort of warranties or bug fixes or anything like that is dramatically lower for a course than it is for a SaaS product.
Rob: Another thing that you can look at is the length of time they’ve been in business. Older businesses do tend to be more stable without massive revenue fluctuations, they also tend to be in the software space slower. They’re slower to release features. There’s a lot of opportunity when competing against older businesses that have gotten kind of big and bloated.
Newer businesses can obviously have a lot more revenue swings or faster revenue growth in terms of percentage wise, but they can be harder competitors for you to compete against because a lot of times, if you’re just a team of one, two, three people, your advantage is that you can move quickly and you can take refugees from those older, larger companies. I think there’s a lot of opportunity. It was the playbook of Drip–that we were the young upstart, and we were smaller but we were shipping features so much faster than a lot of our competitors. It was kind of easy pickings against companies that had been around for 10 years and had a bunch of legacy.
That’s the thing with oil companies, or paper manufacturing–kind of typical brick and mortar businesses. If you’re 50 years old or 100 years old, you have a brand name, you can be entrenched in a space but if you’re a software company that’s 10 or 15 years old, you are very likely to have a ton of legacy code, and your software is very likely to not be as good as software that was built today. It is this kind of inverse thing where, older companies will have a lot of revenue, and they have a lot of momentum and they’ll have a lot of brand, there tends to be a pretty good factor to get in there as an upstart and make some traction.
Mike: Just to kind of tackle on or clarify a little bit of what Rob is saying because I don’t want people to misunderstand him based on exactly what he said. But when he said that the new businesses tend to have a better code, it’s not like the ones and zeroes are any better, it’s really just that they have basically, honed in on exactly what it is the customer wants in terms of the minimum stuff that needs to be built versus the businesses that have been around for a long time.
It’s just so much harder for them to make a change even if it would be better for their customers because they have to take into consideration the existing customer base. If they make a large change to the frontend of their product and they suddenly alienate 30,000 customers, it’s really bad for them. That’s just going to make massive problems for them and support headaches. They’re going to choose to not make those changes even though they could and they have the resources to.
Rob: Yeah, that’s right. There’s legacy customer stuff. That’s what you’re talking about if you can’t make a change, and then there’s legacy code stuff. When I think of how much better software development practices have gotten over the past 15 years with extensive unit testing, the frontend integration testing, and the agile development methodologies–the software I was writing and working on 15 years ago was harder to maintain. Maybe that’s not across the board and maybe that’s not for everyone, but that software, we could not ship features nearly as fast because the software didn’t have unit tests and it was more crafty–it was all these things. These days I believe the practices, they’ve gotten better. I think software these days is easier to work on assuming that you have knowledgeable people who are using the right engineering practices and aren’t just hackers throwing stuff at the wall on a weekend or something.
Mike: The next thing you look at is the company leadership and how that is structured. If they’re self-funded, the founders tend to be in those company leadership positions. If it’s angel or VC funded, the founders may be there still in the executive capacity or they may have put into more of a director role and they brought in professional CTOs or CEOs, for example. It depends on how far along they are.
If it’s a established business that’s been around for 10, 15, 20 years then who knows what that looks like but it also gives you an indication of what things are going to change in the future. They just brought in a new CEO or they just got a round of funding, for example, that dramatically changes what the future vision for the company is going to look like.
Those are just, again, just data points that you can look at but it helps you to understand how quickly is this company going to change direction and are they likely to change direction? If the company’s been doing their business exactly the same way for the past five years, chances are good they’re probably going to do that for at least the next year or two but there’s no guarantee.
Rob: You can go to Crunchbase for this. You can signup for Google alerts on the company names. I think that’s a good idea anyways. One thing I’ll caution as we’re talking through this is, I have been in environments where people were way too fixated on what are competitors are doing. “Oh, they just shipped this thing. Oh, they just raised this round of funding.” I was like, “This stuff is good to know but this is not make or break. You should be focusing way more on your customers than on your competitors.” With that said, everything we’re talking about here is still good to know, to have an idea of the landscape, and to revisit it every—I would say in a startup environment—probably every month to three months if you’re in the early stage. But this is not something that everyday you should just be thinking about and trying to look and watch competitors and watch what they do because it just matters so much less. Unless you’re in a neck and neck race with your competitor, it’s just not a good thing to be overly fixated on what other people are doing.
I think another thing to look at is red flags or exceptions. These indicate potential problems or major changes that could be good or bad that a competitor is doing. If you hear about layoffs they’re doing, if there’s a quick change of leadership where the CEO was perhaps, asked to leave–anytime there’s a change of leadership you always wonder what happened; if they raised funding recently, they have new product announcements, all kinds of stuff. This is where you can again, monitor the email list, there’s people talking about any industry. If you’re in marketing automation and then there’s three or four people who are kind of the industry experts that you can be on their list or you can like I said, subscribe to Crunchbase updates or do Google alerts just to hear about what your competitors are up to.
Mike: The last thing you can look at to dissect your business competitors is to pose as a customer and try and find out how they treat their customers. There’s obviously some ethical questions that you have to answer for yourself here in terms of how far you’re going to go. Obviously, you can sign-up for a competitor’s products, you could just get on their mailing list, you could call or email their support and directly ask questions.
Posing as a customer gets a little dicey of course in terms of ethics and how far you want to go with that but each person has their own, I’ll say, line in the sand for that. Personally, I don’t think that I would go too far with that. I might look at their email list. What I don’t know is I would sign-up for a trial if I wasn’t actually interested in it though. But all of these gives you an idea of how they treat their customers and whether or not there are ways that you can position yourself to customers that are unhappy with their product or their service in order to make yourself more attractive to those customers that are leaving.
Rob: To recap, we had eight way to dissect your business competitors.the first was, look at their revenue. Second was target customer type. Third was sales and acquisition channels. Fourth was software versus courses. Fifth was length of time in business. Next was company leadership, then red flags and exceptions. Eight one was posing as a customer.
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Episode 403 | Should You Love What You’re Working On?
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike ask the question: should you love what you’re working on? The guys talk about this topic in the idea of balancing interests and opportunity. They also ask themselves the question and how it pertains to their lives and businesses.
Items mentioned in this episode:
Rob: In this episode of Startups For The Rest Of Us, Mike and I talk about whether you should love what you’re working on. This is Startups For The Rest Of Us episode 403.
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 built your first product or just thinking about it. I’m Rob.
Mike: And I’m Mike.
Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. Where this week, sir?
Mike: I started a local D&D meetup group.
Rob: That is so cool.
Mike: A friend of mine and I’ve played with our kids. I’ve got two sons and he has a son and two daughters. One of his daughters played a little bit with us. She was like, “Yeah, this isn’t for me. I hate this. I don’t want to deal with boys.” I think that’s certainly what is was. But the other three, him, and I play. We wanted to start up a group where we’re actually playing with adults because kids can be a little bit difficult to keep on track sometimes.
He knew a couple of people then I started a meetup.com group to try and find at least one more player. There’s five of us now and we’ve met for the first time earlier this week. Started up a game, we expect it to go for a couple of months, we’ll just meet up every week, and see how things go.
Rob: That’s fun. Did you say you just meetup.com?
Mike: Yup.
Rob: Awesome and you’re playing fifth edition?
Mike: Yeah, the latest version. I think two or three other people who we’re playing with haven’t played in 20 or 30 years. Then they went to college, had kids, and got out of bit for a while. Now they’re coming back and so far it’s been good. We only had one session, which was about three hours long, but we spent some time before that at a different time creating characters. It’s good so far.
Rob: Were they marveling at the ascending armor classes and there’s no THAC0. I don’t know if you played second edition, but did they have to read the player’s handbook or you just brought them up to speed verbally?
Mike: Yeah, I caught them up to speed. I was like, “Here’s the differences from when,” because I asked them which versions they played. So up to second edition they have the THAC0 and then in the third edition they switched over to the d20. I just explained those things.
Then one person, he still plays a lot of version 3.5. He’s never played 4 or 5 before. I looked it up and found a place—I think it’s Reddit—where they basically laid out, “Hey, here are the differences between version 3.5 and version 5.
Rob: There’s a lot more similarities than I thought. I know 5 is more stripped down. There’s less feats and there’s a bunch of stuff there. The prestige classes I think are maybe those are only in 4. I never played 3.5 or 4, but I’m pretty familiar with them at this point.
I know there’s always controversy around it, but I played basic, I played expert, then I played first edition. Then I just got familiar with second edition, which is where they introduced THAC0. Pretty sure first edition it was all table-based, is my memory, and then stopped, got into sports, music, and stuff, and then just came back into it as my son got old enough to play.
I remember my nostalgia is for basically probably first edition, maybe basic but the rules are so jenky there that I couldn’t go back to it, but I remember Googling, I’m coming back to D&D. Should I try fifth edition or should I go back to first edition?
There’s all these discussions about it and the general consensus was, especially for bringing new players who’ve never played anything before, bring them to fifth edition. It’s a pretty nice rule set. It’s honed and refined. It’s like a piece of software that’s gotten better. I think there was bloat, perhaps.
People could argue as you got 3.5 and 4. Mostly 4, I think people had some issues with, but then 5 was almost like a partial rewrite or something, or someone refactored a lot of code, added some unit test. It’s a terrible analogy, I don’t want to get into this, but I really get them. When I dove into 5, I was like, “This is a really fun game to play.” It’s so much less about the mechanics of the game, which was my memory of the first edition. All these tables I was looking up and all that stuff. It’s so much less about that. It’s more about getting into the characters, the combat, the adventure, and the fun of it. It was cool. I taught my son I think when he was seven or eight, and he picked up the mechanics pretty quickly.
Mike: I really liked what they did with the fifth edition as well. It’s just so much more streamlined and it’s simpler without being simplistic. That’s probably the best way I would describe it. And you’re right. There’s a lot less reliance on tables and the one thing that I really liked that I’ve read about, which is the difference between 3.5 and 5 is that in older editions, there was a lot of reliance on stacking things to get more powerful.
You’d stack your armor and various other things. In this, you don’t have really have to do that and for the most part it’s just like, “Oh, you have advantage and you get to roll 220 set of die and take the best one.” That’s great except when, as an example I was explaining to these guys like, “Hey, this is what it looks like,” and I rolled 220 and I rolled a one and a two.
Rob: For us, we’re recording a little bit in advance but if all goes well, we have closed on our new house in Minneapolis and frankly, all of our stuff will have been moved because the move is scheduled for just a couple of days after. We’ll be in the process of unpacking boxes and probably hanging things on walls. I’m really looking forward to having that process, the chaos ending because already, I’m sitting at our old house and there’s things off the walls and there’s a few things in boxes.
Everyone is a little bit disjointed. You get that feeling of like, “We’re in process, where was that one thing, I can’t find it,” or it’s even just a visual cue. There’s just some chaos around me and there’s this unsettled feeling I feel like with every family member being in a place that feels like our house but it’s a little different because there’s nothing on the walls as an example. I’m looking forward to feeling better about that.
Mike: Like an Airbnb where everybody moved out and you just walked in.
Rob: Yeah but even worse than that is, it’s our house that’s familiar. Everything’s packed up and stuff. It will be good, but it’s definitely move up for us in terms of the house is bigger and nicer, and we can do things. I’m already looking at what smart home things I’m going to install because we have several Amazon Echos and there’s all the controlling you can do.
Even starting simple stuff like light switches and getting more advanced with security stuff, operating garage door openers, and that stuff. So I’m kind of nerding out on that a little bit. Something I haven’t able to do because all that stuff, I’m not going to invest time in that in a rental, and it really hasn’t come big time into fruition. It’s been a couple of years since I’ve owned a house now, so I’m excited at the potential of geeking out with some of that.
Mike: On my end, the only other thing I have as today, I recently fixed a Javascript bug that would sometimes prevent people from logging into Bluetick. But not all the time and I could never replicate it which sucked.
Rob: Now that sucks.
Mike: It had to do with angular promises with the Javascript and one would trigger and it says, “Oh, go ahead and log in,” then it goes to grab all the data and it doesn’t have the local token saved. It was just a matter of it didn’t fully save it before it had actually tried to reach out and grab all the data that it literally just authorized itself to get.
Anyway, just because there was the race condition, like it worked fine for just about everybody and then there were, I think, it either certain browser combinations, or I couldn’t even nail it down to, say it was just this operating system and this particular situation. If the latency tended to be high enough, then it tended to not work.
Rob: That’s tough, Javascript stuff. Still, a client said Javascript is still so hard. I shouldn’t say so hard. It still has those edge case things where the browsers handle it differently and if can’t reproduce it, how do you fix that stuff? Every once in a while, that’s the thing. Again, if you have 10 users, it’s unlikely that someone happen but when you get 10,000, 30,000 people using your app, bizarre edge cases come up and you just some oftentimes are completely unable to reproduce it. If you can’t reproduce it, you pretty hard to fix it.
Mike: In this case, I went down the path of looking. In Chrome, there’s this ability to say, “Oh, use a different emulator if this was running on a 3G connection or something like that, or even slower.” Even though I still could not replicate it, I’m pretty sure that it had to do with certain types of browser combinations and what other plugins you have loaded. Based on those things, it would either trigger the race condition or it wouldn’t. Sometimes it would work. Actually, the vast, vast majority of the time, it would work fine and then just these little occasions where certain things would be screwed up and it just wouldn’t.
Rob: So cool. Today, we’re going to kind of, I don’t know if it’s a thought experiment as much as it’s a discussion of this topic that come up now and again. I’ll say, not even an inflection point but at a point where I’m thinking about, “Hey, what could happen next for me? What’s going to come next?” I know there are a lot of people are thinking at a given time length, “Hey, what project am I going to work on?” and, “What type of niche should I go after?”
There’s always this balance between balancing your interest in something and the opportunity that it has. I think the question we want to explore today is, do you need to love what it is you’re working on and what that looks like? You can take a business that sells beach towels online, and you could say, “Well, beach towels are awesome and I’m really into them and I collect them and I’m super interested in it.” Or you could say, “Well, I’m not interested in beach towels, but I am interested in ecommerce and ecommerce really excites me.” So you have that interest. Or you could say, “Well, I’m not that interested in ecommerce but I am interested in just running a business, and this is one that I can do in my spare time.” So you have interest there, or it’s kind of a continuum. Or further up, you could say, “I’m not even interested in running a business, but I just want the freedom that it provides.”
One of those four places on the continuum I think is what we’re going to look at today and balancing on one end, there is interest and then on the other end of that spectrum, there’s opportunity. I think potentially if you can get them to overlap, maybe it’s less about two ends of a spectrum and more about, it’s a Venn diagram where you have circles. The circle could be, these are all my interests and that includes role-playing games and it includes stock market investing and it includes Legos and I don’t know, other things that someone might like. Running a business might also be one of those.
An opportunity could be things that overlap with those, like, “Hey, there’s a real good opportunity starting at Lego RPG site that no one’s done and you can make much money at it.” That’s not true because you probably wouldn’t make any money. I know there’s a bunch of opportunities like selling dog food online or starting a business you have no interest in and you got to figure out and evaluate for yourself which of these are you going to go after? How are you going to balance those, I think is a better way to put it.
Mike: You mentioned Venn diagram in there. I think the one misleading thing about using the phrase Venn diagram is most people think of it as this mechanism for overlapping either two or three things, but when you start adding more than three things in, it’s almost like more of a three-dimensional model at that point. It’s still a Venn diagram, but it’s just really much more difficult to visualize because some of those things just don’t overlap at all or they only overlap with everything but it’s also difficult to put them in if it’s actually like a 3D model.
Rob: I think that’s a good point and a Venn diagram or a continuum, a single line, an axis was one thing on one end and one thing on another. These are just really abstractions. It’s ways that we can describe things and at certain points abstractions always break down. I think that is something to keep in mind as we talk this through.
There’s a lot of folks and there’s a lot of conversations that I’ve seen around this idea of should you follow your passion or should you just go after the opportunity. People try to make it binary and they say, “Well, if you just follow your passion, you’ll get there.” Or you purely have to go after opportunity and I believe the conclusion that we’re probably going to get to is that it’s a blend of those. It’s figuring out what you can be passionate or interested in, but also blend out with something that held some opportunity.
To start to think about it, there’s this question that I want to throw out, what drives you? You can answer that in the abstract or you can take a personality test. Have you ever taken the enneagram?
Mike: I don’t think I have, no.
Rob: We’ll link it up in the show notes. You can take it for free online and it’s like the, what is it the Myers-Briggs where psychologists like Sherry says, “You know there’s some value there, but it’s really not scientifically a research.” Perhaps as a psychologist, I would take it with a grain of salt versus a true psychologist-administered test. But there is still some value to these things. I even think StrengthsFinder 2.0 I think is good. It gave me some insight and a little more insight into who I am even if that’s not the most academically rigorous test of anyone.
The reason I bring up the enneagram is you basically take this test online. I think it takes about 20 minutes and then it gives you a couple of numbers, it’s one through nine, and each number corresponds to a personality type. Number three is an example, a lot of folks that I have met in business wind up with this and this is the achiever. There’s always pros and cons and it says the success-oriented pragmatic type, adaptive, excelling, driven, and image-conscious.
I think some startup founders are driven by the achievement. They just want to achieve whether they’re trying to fight this voice in their head. It’s the voice of their father, or the voice of someone who told them they can never succeed, or maybe it’s just a drive they have to make money, maybe it’s just a drive to show everyone or show themselves that they can do it.
But there’s something about just doing it for the achievement’s sake. They don’t necessarily, in my experience, care about the process of getting there, about what they create along the way, or about they could achieve in a business that sells cell phones, or is a GPS startup, or is selling whatever, beach towels online, but if they built an eight-figure business in any of those, they would feel they have achieved something and they’d be happy.
Versus, I believe it’s number six, and I think that’s me. It’s the loyalist. It says the committed, security-oriented type, engaging, responsive, anxious, and suspicious. A big part of the loyalist, when you read through the description is, there’s this sense of creating and needing to create something, put it into the world, to own this creation, to advance it, and to make it interesting.
What was funny is interacting with some folks once Drip was acquired, interacting at leadpages. Several of us took this test and it was pretty obvious there were folks who, it didn’t matter to them what business we were in. They just wanted to go big. Going big for the sake of going big was awesome to them.
For me, it was like, “No, I’m actually here to build stuff.” I’m a banker and I am the guy who writes books, I’m the guy who creates podcast, and create software, and builds interesting things, and hopefully, that’s why I want the money is so that is can go work on these interesting things. It’s to have the freedom to go do interesting things. Not just achieving for the sake of achievement.
Mike: You definitely fit that loyalist. You’re definitely a suspicious and shady-looking guy.
Rob: Hey it is, huh? That’s the thing. When you read any of these, there’s always some negative and it’s like, “Oh, am I really?” And it’s like, “Yeah, I probably am.” I’m probably am all those things. But engaging and responsible certainly fits as well.
The reason I bring the enneagram up is that you can take any number of test, but it’s interesting to spend 20 minutes and get some insight, to read the descriptions and think, “Am I here to achieve?” Because if you are, then your need to love the business or the specific niche, or whatever it is that you’re working on, is probably going to be a lot less than someone who needs to love what it is that they’re working on, and to be enthusiastic about it.
Number seven is an enthusiast. There’s others of these numbers that really point more towards like, “Yeah, you need to love what you do or else you’re going to bail on it.” I think it’s interesting whether you take this or you just think about it to yourself. Certain people know that there’s no chance that they’re not going to be happy working on something that they’re not super interested in everyday.
Mike: I think in general when you take a look at these types of personality tests or things that will help to describe or categorize you, it’s easy to write-off the 20 minutes that it takes to do any one of these and as you said, I think that if it’s not something that it is rigorously given or tested, like if it’s a 15 or 20-minute test, it’s not going to be rigorous.
If you spent an hour answering questions and you’re answering 60, 100, 200 questions or something like that, it’s a little bit more. Those you probably have to take with less of a grain of salt, but regardless which one you take, I think you’re better served by looking at the results of it as in how far you skew in a particular direction, regardless of what direction that actually is.
As you said, every single one of these has pros and cons associated with it. People who exhibit different traits are going to have different interests and they’re going to dislike different things. But when you’re going through those, it’s important to not just take a cursory look at those, like the different personalities or different categories that they could potentially lump you in, and then not even take the test, because taking the test itself is going to tell you how far you skew in one direction or the other.
I can look through these nine or right here for the enneagram and I can probably say, “Oh, well I associate with four or five of them, or even six or seven,” but it doesn’t tell you how strongly you associate with them, and that is even more important than being able to put yourself in one of those categories.
Rob: Yeah, I would agree and I didn’t mean to downplay this from the start. When I say I take it with a grain of salt, I mean, don’t base every life choice on your enneagram result. The enneagram is given to tens of thousands, hundreds of thousands of people. It is research-based and it is like a viable test. But as you said, when it’s only asking so many questions and it’s 20 minutes, there is less rigor there than a test that is. A lot of the psychological battery tests that are given, you’ll sit there for two, three hours for them to get a full picture of stuff. It’s just a nice taste and a nice direction.
I do think I like these things because I always learn something about myself and it’s typically something that’s a little bit of a blind side for me. Typically, I’m like, “Yup. That’s me, that’s me, that’s me,” and then they’ll throw something else in this, it’s like, “Oh, that’s true, but I hadn’t realize that.” It’s one, the anxious or suspicious thing. It’s like, “Yeah, that’s a good point.” I do tend to not trust people until I known them for a while and how is that a plus for me and how is that something that maybe I need to work around.
But I think the interesting thing and a question that’s framed is like, “Are you the type of person who can work on things that they don’t love?” That maybe the question to ask yourself. Certain people just doesn’t know this. I remember Jason Roberts on TechZing used to always say, “I know I’ve got to love it or I’m just not going to do it.” He’s very much a passion player. He would only start ideas that were super exciting to him and he could never go into a niche that was selling beach towels or he would have completely peered out.
Whereas for me, my goal of financial independence was more important to me than needing to love that I was selling the duck boat plans and the bonsai tree ebook, in the early days, the beach towels and stuff. Those are high probability of success things for me based on my tool belt and I was able to build those collectively into six-figure income and replace everything. I bought my own freedom. Then I moved more into things that I enjoyed. That’s when I started doing HitTail, and Drip, and even during that time I was seen doing MicroConf and this podcast. The stuff was part of that.
Again, I hope it’s a spectrum or if it’s a line or whatever, but I always think about this one example of, to optimize for opportunity, you could sell coffins online. To optimize for interest, if you love watching movies, you could review movies online, or if you role-playing games, you could review role-playing games online. Those two are massively in tension. The role playing games and the movie reviews is going to be so hard to make a full-time living at that. Yes, there’s a handful of people who do it, but it’s really, really hard and it’s a ton of work.
Compared to selling something that’s really boring like accounting software or coffins online. I see it partially as a joke, but I remember a venture capitalist using this an example of them wanting founders who are really into what they’re doing. This venture capitalist said, “You know during the dot com boom when everything was going online pets.com, grocery delivery and all that, there were entrepreneurs who were pitching them like a really inefficient market is the coffin market.” It’s a cottage industry, the markup is outrageous, people don’t haggle, it’s just this weird time. The guy was like, “There’s a huge opportunity here and we can make a ton of money and save money for consumers.”
I believe that mattresses are like this, too. Mattresses, the markup is always huge and then Casper has come along and I really think there’s ton of opportunity there. The VC said, “I kept asking the guys, ‘Why do you want to do this coffin startup? A funeral startup?’” They’re like, “Well, because there’s opportunity there.” The VC didn’t fund them because he believes that you need to really be into the whole space, love the space, and this and that. That’s fine. That’s his belief. That’s his thesis of funding people.
But I think when you ask yourself, you can have the continuum. You may not love mattresses or care anything about them, but if you’re really interested in building a big business, running Casper would probably be an interesting slush fund thing for you to do if you’re an achiever. If you just want to achieve, you can build that eight, nine-figure business, and really not care much about the product you sell.
Mike: I can think of any number of businesses that I would think it would be interesting to start and go for but that doesn’t necessarily mean that there’s a business opportunity there as well. I think that’s what always bugged me about the do-what-you-love advice. Just because you love it doesn’t mean it can actually make a business. That advice kind of glosses over the fact there may just not be a business there for it. I don’t know. I think there is a difference between doing it because you love it versus doing it because you want to, also making an income from it.
That goes back to the Venn diagrams that you’re talking about. There has to be a clear intersection of multiple things in order for it to work for you based on whatever your goal is. If you just want to do it to have fun, go for it. You don’t also have to make money. But if the Venn diagram includes making a full-time living from it, then the business opportunity has to support that. If it doesn’t, then it’s not going to work.
Rob: Right and some luck if few get to do both. Gary Vaynerchuk loved wine and he turned that into a business. It does happen. It’s just how many other people try to do the exact same thing and it didn’t work versus if there really is opportunity there that the odds of you, even getting a base hit and I think that’s the thing, it’s like are you willing to have a higher chance of success but perhaps enjoy things a little less along the way because you’re not doing everything that you love. Maybe you’re just going for that single or that double, but if it brings you financial freedom that you can then work on stuff you love later, but you’ve got to do a few years of not terrible drudgery. It’s not like you’re working on 9-5 for someone else, but it’s weighing those two things.
I think that leads me to a question of, “Tell me what do you love about Bluetick? Do you love the idea of warm outbound email? Or is it you love building software and want to find a way to make money from it and sustain yourself full time? Is it you love building businesses?” There’s got to be something in there that drives you day to day but I don’t get the feeling that you woke up two years ago and said, “Oh man, all I want to think all the time is email deliverability and how to hook into the Gmail API.”
Mike: Yeah, I definitely did not think of that and of course I don’t hook into the Gmail API because it doesn’t work very well. I think the thing I keep coming back to is that it actually solves a genuine business problem, first of all, and second, I like the people that I work with. Like the customers that come to me and they’re like, “Oh I have this problem and I need to be able to fix it.”
I’ve taken various personality tests in the past and one of the things that tends to come out at or very close to the top of the list almost every time is that I’m a people person. I care very deeply about a much smaller number of relationships, but people is a main focus for me. If I were to sell a business for $20 million and I was the sole stockholder, for example, I wouldn’t just keep it all. My inclination would be to share that the people who have helped get me there.
There’s certainly people who would take the opposite approach and say, “Well, I took all the risk, I did everything, I own 100% of it so I should get everything.” There’s nothing inherently wrong with that, it’s just not my personality.
There’s that side of it that I like helping other people, which partly why I do the podcast, partly why we’ve run Founder Café together and why we run MicroConf. That’s important to me and running Bluetick, I get to work hand-in-hand with a lot of different people and a lot of different businesses, and yes, it ultimately benefits me financially as well, but at the same time I know that deep down I’m actually solving a problem for them and it does help their business.
Rob: I think that’s an important thing to know. You look around at different examples. Think of Dan and Ian with Tropical MBA. I’m pretty sure they weren’t that excited about cat furniture and valet podiums, but they were excited about the prospect of freedom, about the prospect of starting your own business. Ian’s certainly a maker. He’s the designer of the stuff in the early days, and I think they’re excited just about building businesses and such. That’s that balance of they’re excited about enough things about those spaces and they saw tremendous opportunity there that they’re willing to dive in.
I felt the same way about HitTail and Drip. I have always liked SEO, I’ve done a lot of it, and I’ve always done a lot of email marketing, and use many ESPs. But I’m not as passionate about those things as I am, say, some of the hobbies that I do, such as playing guitar, or playing tabletop games, or even personal financing, and stock investing. Those hobby things are just so much harder to turn to real businesses. I kind of combined that opportunity with SEO and email marketing with the interest that I have in those topics, and then build businesses out of them.
I think that that’s probably the conclusion that I leave folks with. You may not be super excited about being on online classified ads, or about selling beach towels, or whatever. But there are other things that you can do and it’s about knowing yourself. You have Jason Roberts, again, coming back to him or someone like him. There are people out there who are just really need to love what they’re working on.
A lot of those folks become indie game developers or they build software for guitar effects. I used to work with a guy who built that on the side because he was so into the music, and that’s all he wanted to do is be around music and that’s cool. But for him, if ever he achieves financial freedom, it’s going to take decades and it’s just a lot more risk there, and a lot less chance of success because you’re stacking the cards against you in exchange for being able to be really passionate about what it is you’re working on. That’s the trade-off that you will have to make.
I think each of us as individuals has to think through that and think about how much it is you desire to work on something you love versus perhaps having more of a chance of that success.
Mike: I’m wondering how much of the decisions that people who are listening to this podcast make or just entrepreneurs in general, I wonder how much of those decisions are influenced more by what they see as a potential business opportunity versus what their interest are because I talked to a lot of people, like, “Oh, I need an idea for my app. I don’t have any ideas.” That’s a very common thing that people will say and most of the time I think it’s because they don’t want to build something that somebody else has built or build a business that is very much like another business.
But at the same time, those things can be very successful and if you have your own take on it, your own ideas about how to take that to fruition, then you can certainly make it work. But if they just don’t have those ideas or they think that they don’t have those ideas, then they’re not going to move forward with them.
Rob: Right, and if you work on a business you hate every day, then obviously, that’s not a good solution either. Honestly, when I look, I think there’s a lot of approaches. We’ve gone through them here. The approach I took was in the early days my interest was financial freedom. I just kind of slogged it away, a bunch of businesses that I didn’t have a ton of interest in, but I was learning and learning is exciting to me. I think a lot of folks in our audience probably feel the same way. Just the act of learning new things could potentially keep their interest. Then as I built more and more of those up, then I was able to go into things that I was more interested in like, let’s say HitTail and Drip, with SEO and email.
Now, I’m at the point where I have the luxury of more time to invest in something I’m working on and it doesn’t need to be that big hit. I may even sway further into, “I’m only going to do stuff that I really, really enjoy.” Maybe it is. Maybe my next thing is nothing like anything I’ve done in the past and it’s truly like, I mentioned it a little bit, “I’m going to build an authority website in this topic that I just think is super interesting, and see what happens.” Maybe I’ll spend two years on it and I enjoy it because it’s a hobby and it never does anything. So what?
Personally, I would have hated doing that 10 years ago because I would have been hating my day job while I did this and I didn’t want to have that pole. I wanted to achieve that freedom first. I do think that there can be steps along the way of shifting and that it’s not this one-size-fits-all or even this permanent approach for each individual.
Mike: I think that’s all an interesting thought experiment. If you have any thoughts of your own, just feel free to head over to the website at startupsfortherestofus.com. Leave a couple of your thoughts in your comments. With that, we leave you for today. 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 Out of 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. We’ll see you next time.
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 built your first product or just thinking about it. I’m Rob.
Mike: And I’m Mike.
Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. Where this week, sir?
Mike: I started a local D&D meetup group.
Rob: That is so cool.
Mike: A friend of mine and I’ve played with our kids. I’ve got two sons and he has a son and two daughters. One of his daughters played a little bit with us. She was like, “Yeah, this isn’t for me. I hate this. I don’t want to deal with boys.” I think that’s certainly what is was. But the other three, him, and I play. We wanted to start up a group where we’re actually playing with adults because kids can be a little bit difficult to keep on track sometimes.
He knew a couple of people then I started a meetup.com group to try and find at least one more player. There’s five of us now and we’ve met for the first time earlier this week. Started up a game, we expect it to go for a couple of months, we’ll just meet up every week, and see how things go.
Rob: That’s fun. Did you say you just meetup.com?
Mike: Yup.
Rob: Awesome and you’re playing fifth edition?
Mike: Yeah, the latest version. I think two or three other people who we’re playing with haven’t played in 20 or 30 years. Then they went to college, had kids, and got out of bit for a while. Now they’re coming back and so far it’s been good. We only had one session, which was about three hours long, but we spent some time before that at a different time creating characters. It’s good so far.
Rob: Were they marveling at the ascending armor classes and there’s no THAC0. I don’t know if you played second edition, but did they have to read the player’s handbook or you just brought them up to speed verbally?
Mike: Yeah, I caught them up to speed. I was like, “Here’s the differences from when,” because I asked them which versions they played. So up to second edition they have the THAC0 and then in the third edition they switched over to the d20. I just explained those things.
Then one person, he still plays a lot of version 3.5. He’s never played 4 or 5 before. I looked it up and found a place—I think it’s Reddit—where they basically laid out, “Hey, here are the differences between version 3.5 and version 5.
Rob: There’s a lot more similarities than I thought. I know 5 is more stripped down. There’s less feats and there’s a bunch of stuff there. The prestige classes I think are maybe those are only in 4. I never played 3.5 or 4, but I’m pretty familiar with them at this point.
I know there’s always controversy around it, but I played basic, I played expert, then I played first edition. Then I just got familiar with second edition, which is where they introduced THAC0. Pretty sure first edition it was all table-based, is my memory, and then stopped, got into sports, music, and stuff, and then just came back into it as my son got old enough to play.
I remember my nostalgia is for basically probably first edition, maybe basic but the rules are so jenky there that I couldn’t go back to it, but I remember Googling, I’m coming back to D&D. Should I try fifth edition or should I go back to first edition?
There’s all these discussions about it and the general consensus was, especially for bringing new players who’ve never played anything before, bring them to fifth edition. It’s a pretty nice rule set. It’s honed and refined. It’s like a piece of software that’s gotten better. I think there was bloat, perhaps.
People could argue as you got 3.5 and 4. Mostly 4, I think people had some issues with, but then 5 was almost like a partial rewrite or something, or someone refactored a lot of code, added some unit test. It’s a terrible analogy, I don’t want to get into this, but I really get them. When I dove into 5, I was like, “This is a really fun game to play.” It’s so much less about the mechanics of the game, which was my memory of the first edition. All these tables I was looking up and all that stuff. It’s so much less about that. It’s more about getting into the characters, the combat, the adventure, and the fun of it. It was cool. I taught my son I think when he was seven or eight, and he picked up the mechanics pretty quickly.
Mike: I really liked what they did with the fifth edition as well. It’s just so much more streamlined and it’s simpler without being simplistic. That’s probably the best way I would describe it. And you’re right. There’s a lot less reliance on tables and the one thing that I really liked that I’ve read about, which is the difference between 3.5 and 5 is that in older editions, there was a lot of reliance on stacking things to get more powerful.
You’d stack your armor and various other things. In this, you don’t have really have to do that and for the most part it’s just like, “Oh, you have advantage and you get to roll 220 set of die and take the best one.” That’s great except when, as an example I was explaining to these guys like, “Hey, this is what it looks like,” and I rolled 220 and I rolled a one and a two.
Rob: For us, we’re recording a little bit in advance but if all goes well, we have closed on our new house in Minneapolis and frankly, all of our stuff will have been moved because the move is scheduled for just a couple of days after. We’ll be in the process of unpacking boxes and probably hanging things on walls. I’m really looking forward to having that process, the chaos ending because already, I’m sitting at our old house and there’s things off the walls and there’s a few things in boxes.
Everyone is a little bit disjointed. You get that feeling of like, “We’re in process, where was that one thing, I can’t find it,” or it’s even just a visual cue. There’s just some chaos around me and there’s this unsettled feeling I feel like with every family member being in a place that feels like our house but it’s a little different because there’s nothing on the walls as an example. I’m looking forward to feeling better about that.
Mike: Like an Airbnb where everybody moved out and you just walked in.
Rob: Yeah but even worse than that is, it’s our house that’s familiar. Everything’s packed up and stuff. It will be good, but it’s definitely move up for us in terms of the house is bigger and nicer, and we can do things. I’m already looking at what smart home things I’m going to install because we have several Amazon Echos and there’s all the controlling you can do.
Even starting simple stuff like light switches and getting more advanced with security stuff, operating garage door openers, and that stuff. So I’m kind of nerding out on that a little bit. Something I haven’t able to do because all that stuff, I’m not going to invest time in that in a rental, and it really hasn’t come big time into fruition. It’s been a couple of years since I’ve owned a house now, so I’m excited at the potential of geeking out with some of that.
Mike: On my end, the only other thing I have as today, I recently fixed a Javascript bug that would sometimes prevent people from logging into Bluetick. But not all the time and I could never replicate it which sucked.
Rob: Now that sucks.
Mike: It had to do with angular promises with the Javascript and one would trigger and it says, “Oh, go ahead and log in,” then it goes to grab all the data and it doesn’t have the local token saved. It was just a matter of it didn’t fully save it before it had actually tried to reach out and grab all the data that it literally just authorized itself to get.
Anyway, just because there was the race condition, like it worked fine for just about everybody and then there were, I think, it either certain browser combinations, or I couldn’t even nail it down to, say it was just this operating system and this particular situation. If the latency tended to be high enough, then it tended to not work.
Rob: That’s tough, Javascript stuff. Still, a client said Javascript is still so hard. I shouldn’t say so hard. It still has those edge case things where the browsers handle it differently and if can’t reproduce it, how do you fix that stuff? Every once in a while, that’s the thing. Again, if you have 10 users, it’s unlikely that someone happen but when you get 10,000, 30,000 people using your app, bizarre edge cases come up and you just some oftentimes are completely unable to reproduce it. If you can’t reproduce it, you pretty hard to fix it.
Mike: In this case, I went down the path of looking. In Chrome, there’s this ability to say, “Oh, use a different emulator if this was running on a 3G connection or something like that, or even slower.” Even though I still could not replicate it, I’m pretty sure that it had to do with certain types of browser combinations and what other plugins you have loaded. Based on those things, it would either trigger the race condition or it wouldn’t. Sometimes it would work. Actually, the vast, vast majority of the time, it would work fine and then just these little occasions where certain things would be screwed up and it just wouldn’t.
Rob: So cool. Today, we’re going to kind of, I don’t know if it’s a thought experiment as much as it’s a discussion of this topic that come up now and again. I’ll say, not even an inflection point but at a point where I’m thinking about, “Hey, what could happen next for me? What’s going to come next?” I know there are a lot of people are thinking at a given time length, “Hey, what project am I going to work on?” and, “What type of niche should I go after?”
There’s always this balance between balancing your interest in something and the opportunity that it has. I think the question we want to explore today is, do you need to love what it is you’re working on and what that looks like? You can take a business that sells beach towels online, and you could say, “Well, beach towels are awesome and I’m really into them and I collect them and I’m super interested in it.” Or you could say, “Well, I’m not interested in beach towels, but I am interested in ecommerce and ecommerce really excites me.” So you have that interest. Or you could say, “Well, I’m not that interested in ecommerce but I am interested in just running a business, and this is one that I can do in my spare time.” So you have interest there, or it’s kind of a continuum. Or further up, you could say, “I’m not even interested in running a business, but I just want the freedom that it provides.”
One of those four places on the continuum I think is what we’re going to look at today and balancing on one end, there is interest and then on the other end of that spectrum, there’s opportunity. I think potentially if you can get them to overlap, maybe it’s less about two ends of a spectrum and more about, it’s a Venn diagram where you have circles. The circle could be, these are all my interests and that includes role-playing games and it includes stock market investing and it includes Legos and I don’t know, other things that someone might like. Running a business might also be one of those.
An opportunity could be things that overlap with those, like, “Hey, there’s a real good opportunity starting at Lego RPG site that no one’s done and you can make much money at it.” That’s not true because you probably wouldn’t make any money. I know there’s a bunch of opportunities like selling dog food online or starting a business you have no interest in and you got to figure out and evaluate for yourself which of these are you going to go after? How are you going to balance those, I think is a better way to put it.
Mike: You mentioned Venn diagram in there. I think the one misleading thing about using the phrase Venn diagram is most people think of it as this mechanism for overlapping either two or three things, but when you start adding more than three things in, it’s almost like more of a three-dimensional model at that point. It’s still a Venn diagram, but it’s just really much more difficult to visualize because some of those things just don’t overlap at all or they only overlap with everything but it’s also difficult to put them in if it’s actually like a 3D model.
Rob: I think that’s a good point and a Venn diagram or a continuum, a single line, an axis was one thing on one end and one thing on another. These are just really abstractions. It’s ways that we can describe things and at certain points abstractions always break down. I think that is something to keep in mind as we talk this through.
There’s a lot of folks and there’s a lot of conversations that I’ve seen around this idea of should you follow your passion or should you just go after the opportunity. People try to make it binary and they say, “Well, if you just follow your passion, you’ll get there.” Or you purely have to go after opportunity and I believe the conclusion that we’re probably going to get to is that it’s a blend of those. It’s figuring out what you can be passionate or interested in, but also blend out with something that held some opportunity.
To start to think about it, there’s this question that I want to throw out, what drives you? You can answer that in the abstract or you can take a personality test. Have you ever taken the enneagram?
Mike: I don’t think I have, no.
Rob: We’ll link it up in the show notes. You can take it for free online and it’s like the, what is it the Myers-Briggs where psychologists like Sherry says, “You know there’s some value there, but it’s really not scientifically a research.” Perhaps as a psychologist, I would take it with a grain of salt versus a true psychologist-administered test. But there is still some value to these things. I even think StrengthsFinder 2.0 I think is good. It gave me some insight and a little more insight into who I am even if that’s not the most academically rigorous test of anyone.
The reason I bring up the enneagram is you basically take this test online. I think it takes about 20 minutes and then it gives you a couple of numbers, it’s one through nine, and each number corresponds to a personality type. Number three is an example, a lot of folks that I have met in business wind up with this and this is the achiever. There’s always pros and cons and it says the success-oriented pragmatic type, adaptive, excelling, driven, and image-conscious.
I think some startup founders are driven by the achievement. They just want to achieve whether they’re trying to fight this voice in their head. It’s the voice of their father, or the voice of someone who told them they can never succeed, or maybe it’s just a drive they have to make money, maybe it’s just a drive to show everyone or show themselves that they can do it.
But there’s something about just doing it for the achievement’s sake. They don’t necessarily, in my experience, care about the process of getting there, about what they create along the way, or about they could achieve in a business that sells cell phones, or is a GPS startup, or is selling whatever, beach towels online, but if they built an eight-figure business in any of those, they would feel they have achieved something and they’d be happy.
Versus, I believe it’s number six, and I think that’s me. It’s the loyalist. It says the committed, security-oriented type, engaging, responsive, anxious, and suspicious. A big part of the loyalist, when you read through the description is, there’s this sense of creating and needing to create something, put it into the world, to own this creation, to advance it, and to make it interesting.
What was funny is interacting with some folks once Drip was acquired, interacting at leadpages. Several of us took this test and it was pretty obvious there were folks who, it didn’t matter to them what business we were in. They just wanted to go big. Going big for the sake of going big was awesome to them.
For me, it was like, “No, I’m actually here to build stuff.” I’m a banker and I am the guy who writes books, I’m the guy who creates podcast, and create software, and builds interesting things, and hopefully, that’s why I want the money is so that is can go work on these interesting things. It’s to have the freedom to go do interesting things. Not just achieving for the sake of achievement.
Mike: You definitely fit that loyalist. You’re definitely a suspicious and shady-looking guy.
Rob: Hey it is, huh? That’s the thing. When you read any of these, there’s always some negative and it’s like, “Oh, am I really?” And it’s like, “Yeah, I probably am.” I’m probably am all those things. But engaging and responsible certainly fits as well.
The reason I bring the enneagram up is that you can take any number of test, but it’s interesting to spend 20 minutes and get some insight, to read the descriptions and think, “Am I here to achieve?” Because if you are, then your need to love the business or the specific niche, or whatever it is that you’re working on, is probably going to be a lot less than someone who needs to love what it is that they’re working on, and to be enthusiastic about it.
Number seven is an enthusiast. There’s others of these numbers that really point more towards like, “Yeah, you need to love what you do or else you’re going to bail on it.” I think it’s interesting whether you take this or you just think about it to yourself. Certain people know that there’s no chance that they’re not going to be happy working on something that they’re not super interested in everyday.
Mike: I think in general when you take a look at these types of personality tests or things that will help to describe or categorize you, it’s easy to write-off the 20 minutes that it takes to do any one of these and as you said, I think that if it’s not something that it is rigorously given or tested, like if it’s a 15 or 20-minute test, it’s not going to be rigorous.
If you spent an hour answering questions and you’re answering 60, 100, 200 questions or something like that, it’s a little bit more. Those you probably have to take with less of a grain of salt, but regardless which one you take, I think you’re better served by looking at the results of it as in how far you skew in a particular direction, regardless of what direction that actually is.
As you said, every single one of these has pros and cons associated with it. People who exhibit different traits are going to have different interests and they’re going to dislike different things. But when you’re going through those, it’s important to not just take a cursory look at those, like the different personalities or different categories that they could potentially lump you in, and then not even take the test, because taking the test itself is going to tell you how far you skew in one direction or the other.
I can look through these nine or right here for the enneagram and I can probably say, “Oh, well I associate with four or five of them, or even six or seven,” but it doesn’t tell you how strongly you associate with them, and that is even more important than being able to put yourself in one of those categories.
Rob: Yeah, I would agree and I didn’t mean to downplay this from the start. When I say I take it with a grain of salt, I mean, don’t base every life choice on your enneagram result. The enneagram is given to tens of thousands, hundreds of thousands of people. It is research-based and it is like a viable test. But as you said, when it’s only asking so many questions and it’s 20 minutes, there is less rigor there than a test that is. A lot of the psychological battery tests that are given, you’ll sit there for two, three hours for them to get a full picture of stuff. It’s just a nice taste and a nice direction.
I do think I like these things because I always learn something about myself and it’s typically something that’s a little bit of a blind side for me. Typically, I’m like, “Yup. That’s me, that’s me, that’s me,” and then they’ll throw something else in this, it’s like, “Oh, that’s true, but I hadn’t realize that.” It’s one, the anxious or suspicious thing. It’s like, “Yeah, that’s a good point.” I do tend to not trust people until I known them for a while and how is that a plus for me and how is that something that maybe I need to work around.
But I think the interesting thing and a question that’s framed is like, “Are you the type of person who can work on things that they don’t love?” That maybe the question to ask yourself. Certain people just doesn’t know this. I remember Jason Roberts on TechZing used to always say, “I know I’ve got to love it or I’m just not going to do it.” He’s very much a passion player. He would only start ideas that were super exciting to him and he could never go into a niche that was selling beach towels or he would have completely peered out.
Whereas for me, my goal of financial independence was more important to me than needing to love that I was selling the duck boat plans and the bonsai tree ebook, in the early days, the beach towels and stuff. Those are high probability of success things for me based on my tool belt and I was able to build those collectively into six-figure income and replace everything. I bought my own freedom. Then I moved more into things that I enjoyed. That’s when I started doing HitTail, and Drip, and even during that time I was seen doing MicroConf and this podcast. The stuff was part of that.
Again, I hope it’s a spectrum or if it’s a line or whatever, but I always think about this one example of, to optimize for opportunity, you could sell coffins online. To optimize for interest, if you love watching movies, you could review movies online, or if you role-playing games, you could review role-playing games online. Those two are massively in tension. The role playing games and the movie reviews is going to be so hard to make a full-time living at that. Yes, there’s a handful of people who do it, but it’s really, really hard and it’s a ton of work.
Compared to selling something that’s really boring like accounting software or coffins online. I see it partially as a joke, but I remember a venture capitalist using this an example of them wanting founders who are really into what they’re doing. This venture capitalist said, “You know during the dot com boom when everything was going online pets.com, grocery delivery and all that, there were entrepreneurs who were pitching them like a really inefficient market is the coffin market.” It’s a cottage industry, the markup is outrageous, people don’t haggle, it’s just this weird time. The guy was like, “There’s a huge opportunity here and we can make a ton of money and save money for consumers.”
I believe that mattresses are like this, too. Mattresses, the markup is always huge and then Casper has come along and I really think there’s ton of opportunity there. The VC said, “I kept asking the guys, ‘Why do you want to do this coffin startup? A funeral startup?’” They’re like, “Well, because there’s opportunity there.” The VC didn’t fund them because he believes that you need to really be into the whole space, love the space, and this and that. That’s fine. That’s his belief. That’s his thesis of funding people.
But I think when you ask yourself, you can have the continuum. You may not love mattresses or care anything about them, but if you’re really interested in building a big business, running Casper would probably be an interesting slush fund thing for you to do if you’re an achiever. If you just want to achieve, you can build that eight, nine-figure business, and really not care much about the product you sell.
Mike: I can think of any number of businesses that I would think it would be interesting to start and go for but that doesn’t necessarily mean that there’s a business opportunity there as well. I think that’s what always bugged me about the do-what-you-love advice. Just because you love it doesn’t mean it can actually make a business. That advice kind of glosses over the fact there may just not be a business there for it. I don’t know. I think there is a difference between doing it because you love it versus doing it because you want to, also making an income from it.
That goes back to the Venn diagrams that you’re talking about. There has to be a clear intersection of multiple things in order for it to work for you based on whatever your goal is. If you just want to do it to have fun, go for it. You don’t also have to make money. But if the Venn diagram includes making a full-time living from it, then the business opportunity has to support that. If it doesn’t, then it’s not going to work.
Rob: Right and some luck if few get to do both. Gary Vaynerchuk loved wine and he turned that into a business. It does happen. It’s just how many other people try to do the exact same thing and it didn’t work versus if there really is opportunity there that the odds of you, even getting a base hit and I think that’s the thing, it’s like are you willing to have a higher chance of success but perhaps enjoy things a little less along the way because you’re not doing everything that you love. Maybe you’re just going for that single or that double, but if it brings you financial freedom that you can then work on stuff you love later, but you’ve got to do a few years of not terrible drudgery. It’s not like you’re working on 9-5 for someone else, but it’s weighing those two things.
I think that leads me to a question of, “Tell me what do you love about Bluetick? Do you love the idea of warm outbound email? Or is it you love building software and want to find a way to make money from it and sustain yourself full time? Is it you love building businesses?” There’s got to be something in there that drives you day to day but I don’t get the feeling that you woke up two years ago and said, “Oh man, all I want to think all the time is email deliverability and how to hook into the Gmail API.”
Mike: Yeah, I definitely did not think of that and of course I don’t hook into the Gmail API because it doesn’t work very well. I think the thing I keep coming back to is that it actually solves a genuine business problem, first of all, and second, I like the people that I work with. Like the customers that come to me and they’re like, “Oh I have this problem and I need to be able to fix it.”
I’ve taken various personality tests in the past and one of the things that tends to come out at or very close to the top of the list almost every time is that I’m a people person. I care very deeply about a much smaller number of relationships, but people is a main focus for me. If I were to sell a business for $20 million and I was the sole stockholder, for example, I wouldn’t just keep it all. My inclination would be to share that the people who have helped get me there.
There’s certainly people who would take the opposite approach and say, “Well, I took all the risk, I did everything, I own 100% of it so I should get everything.” There’s nothing inherently wrong with that, it’s just not my personality.
There’s that side of it that I like helping other people, which partly why I do the podcast, partly why we’ve run Founder Café together and why we run MicroConf. That’s important to me and running Bluetick, I get to work hand-in-hand with a lot of different people and a lot of different businesses, and yes, it ultimately benefits me financially as well, but at the same time I know that deep down I’m actually solving a problem for them and it does help their business.
Rob: I think that’s an important thing to know. You look around at different examples. Think of Dan and Ian with Tropical MBA. I’m pretty sure they weren’t that excited about cat furniture and valet podiums, but they were excited about the prospect of freedom, about the prospect of starting your own business. Ian’s certainly a maker. He’s the designer of the stuff in the early days, and I think they’re excited just about building businesses and such. That’s that balance of they’re excited about enough things about those spaces and they saw tremendous opportunity there that they’re willing to dive in.
I felt the same way about HitTail and Drip. I have always liked SEO, I’ve done a lot of it, and I’ve always done a lot of email marketing, and use many ESPs. But I’m not as passionate about those things as I am, say, some of the hobbies that I do, such as playing guitar, or playing tabletop games, or even personal financing, and stock investing. Those hobby things are just so much harder to turn to real businesses. I kind of combined that opportunity with SEO and email marketing with the interest that I have in those topics, and then build businesses out of them.
I think that that’s probably the conclusion that I leave folks with. You may not be super excited about being on online classified ads, or about selling beach towels, or whatever. But there are other things that you can do and it’s about knowing yourself. You have Jason Roberts, again, coming back to him or someone like him. There are people out there who are just really need to love what they’re working on.
A lot of those folks become indie game developers or they build software for guitar effects. I used to work with a guy who built that on the side because he was so into the music, and that’s all he wanted to do is be around music and that’s cool. But for him, if ever he achieves financial freedom, it’s going to take decades and it’s just a lot more risk there, and a lot less chance of success because you’re stacking the cards against you in exchange for being able to be really passionate about what it is you’re working on. That’s the trade-off that you will have to make.
I think each of us as individuals has to think through that and think about how much it is you desire to work on something you love versus perhaps having more of a chance of that success.
Mike: I’m wondering how much of the decisions that people who are listening to this podcast make or just entrepreneurs in general, I wonder how much of those decisions are influenced more by what they see as a potential business opportunity versus what their interest are because I talked to a lot of people, like, “Oh, I need an idea for my app. I don’t have any ideas.” That’s a very common thing that people will say and most of the time I think it’s because they don’t want to build something that somebody else has built or build a business that is very much like another business.
But at the same time, those things can be very successful and if you have your own take on it, your own ideas about how to take that to fruition, then you can certainly make it work. But if they just don’t have those ideas or they think that they don’t have those ideas, then they’re not going to move forward with them.
Rob: Right, and if you work on a business you hate every day, then obviously, that’s not a good solution either. Honestly, when I look, I think there’s a lot of approaches. We’ve gone through them here. The approach I took was in the early days my interest was financial freedom. I just kind of slogged it away, a bunch of businesses that I didn’t have a ton of interest in, but I was learning and learning is exciting to me. I think a lot of folks in our audience probably feel the same way. Just the act of learning new things could potentially keep their interest. Then as I built more and more of those up, then I was able to go into things that I was more interested in like, let’s say HitTail and Drip, with SEO and email.
Now, I’m at the point where I have the luxury of more time to invest in something I’m working on and it doesn’t need to be that big hit. I may even sway further into, “I’m only going to do stuff that I really, really enjoy.” Maybe it is. Maybe my next thing is nothing like anything I’ve done in the past and it’s truly like, I mentioned it a little bit, “I’m going to build an authority website in this topic that I just think is super interesting, and see what happens.” Maybe I’ll spend two years on it and I enjoy it because it’s a hobby and it never does anything. So what?
Personally, I would have hated doing that 10 years ago because I would have been hating my day job while I did this and I didn’t want to have that pole. I wanted to achieve that freedom first. I do think that there can be steps along the way of shifting and that it’s not this one-size-fits-all or even this permanent approach for each individual.
Mike: I think that’s all an interesting thought experiment. If you have any thoughts of your own, just feel free to head over to the website at startupsfortherestofus.com. Leave a couple of your thoughts in your comments. With that, we leave you for today. 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 Out of 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. We’ll see you next time.
Episode 402 | Tactics for Minimizing Disruptions to Your Vacation
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about some tactics for minimizing disruptions to your vacation. Sometimes, it’s really tough to feel like you can unplug as an entrepreneur, especially if you’re running a SaaS. The guys breakdown some things you should do for your next vacation.
Items mentioned in this episode:
Mike: In this episode of Startups For The Rest Of Us, Rob and I are going to be talking about tactics for minimizing disruptions to your vacation. This is Startups For The Rest Of Us episode 402.
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: And I’m Rob.
Mike: We’re here to share our experiences to help you avoid the same mistakes we’ve made. How are you doing this week, Rob?
Rob: I’m doing okay. I’m a little tired. We landed back from California. Landed in Minneapolis last night around midnight, hopped a lift with the kids, and got home, and in bed around 1:00 AM. I’m on Pacific time so I had a couple of hour times change this morning trying to get up. It’s a little slow getting going but overall, really enjoyed our time in California.
I had talked about previously that we’re going to spend some time with my family in the Bay Area. Our kids had a music camp in San Francisco and then we went and saw Sherry’s folks up in far north California.
Overall, it was good vacation; some vacation, some kind of work stuff. The camp isn’t exactly vacation because it’s pretty intense music practice for the boys. Each day we have to be present and stuff. It wasn’t like we could just kick back and sip martinis or whatever.
Mike: You don’t get to send them for the day?
Rob: No. That would have been ideal. It’s less at camp. It’s actually called an institute, the Suzuki institute. You go and it’s five or six hours a day of them playing instruments, and the parents have to be involved to a certain extent, so you’re sitting in there with them. That’s where I was like, it’s some vacation and it’s some not-vacation. It’s fun in the afternoons and evenings when we took the boys and did stuff but otherwise, got there and back unscathe, which is good when five people are traveling and we lug a cello with us on the airplane. In true chaotic fashion we were back, like I said, landed last night at midnight and then we close on our new house tomorrow in Minneapolis. We show up and sign papers in the morning.
Mike: Stick around for a while then, huh?
Rob: I know, yeah. That was the decision. We really evaluated it after I left the Drip a couple of months ago. It was a decision point like, “Okay, we’ve been in Minneapolis a little less than two years and we can move anywhere. That always sounds great in theory but when you have no real ties anywhere for work—we have family in California—but there’s no reason for us to live in any particular city. I shouldn’t say no reason. There’s no requirement that we live in any particular city; becomes a very difficult thing to tackle. It’s a paradox of choice, it’s almost too much choice.
We evaluated going overseas, and then we evaluated all these cities on them, basically the west coast, even Austin, Denver, Colorado Springs, and Sherry threw Hawaii or Maui. Actually, all these sound great but then you look at what it’s actually like to live there. You look at the days of sun per year, you look at the cost of living, you look what the traffic is like, and you read on Quora. You say, “What’s it like to live in insert city?” You can start to get a feel for what it might actually be like and certain ones just right off the bat are just removed from the list. There are just deal breakers that come up.
I love the Bay Area, I grew up there, and it’s the tech hub of the world, so to speak. But the cost of living there is outrageous. It always has been but it’s catastrophic, basically, and the traffic, I couldn’t deal with them. I would like to live in parts of LA but the traffic there is–you know, it’s just on and on and on there. There’s just things that knock it off.
It was a long and detailed conversation but eventually we got to the point where we decided that staying here was the best option of all of them. But it was a good exercise to go through, to arrive at a decision, and feel good about it, and then be like, “We’re going to buy a house.” We figured that this is a 10-year decision. We have kids that are basically 7, 8, and 10. In 10 years, they’ll pretty much all be gone from the house. At that point we will very likely either keep the house and get a second one somewhere sunny or we’ll sell the house and completely relocate.
Mike: I would have completely lost the pool on any bets that might have been placed about where you’re going to live after your time at Drip is over. There’s no way I would have picked you sticking around in Minneapolis, like there is no chance.
Rob: I think a lot of people wouldn’t have thought that and told us that, and frankly, I probably would have lost the pool as well. I would have imagined we would probably move back somewhere in California but there, at a certain point, quality of life and other things factor in. We lived in a lot of places. We visited a ton and we’ve lived in a lot.
Every once in awhile, you find a place where it’s like, “Wow, this is a world class city with world class amenities, but without so many of the problems of other cities that we’ve lived in,” including location, cost of living, crime, good schools, you just go on a list of all the things, access to airport, delta hub, all the stuff. As we looked at all the other cities, it was just so hard to even think about giving up each of the things that we have here. I wouldn’t have called it from the start, either. I think Sherry might have. She knew it was a pretty cool city here. I had no idea before we moved here.
That is the story. We close tomorrow and then we basically move over the weekend. The nice part is the house, it’s only a block away so it’s an easy move. I can move my own guitars and expensive stuff without worrying about movers trucking a dent truck.
Mike: Yeah, I think that would have been the deciding factor for me, it was that I wouldn’t have had to move my stuff. That’s why I would have just stayed there.
Rob: Totally. No, I know. I’ll admit that we used to play factor but at this point, we’ve done it enough that’s it’s like, “You know what, it’s a temporary pain. If I want to make it a 10-year decision, I’m going to make the right 10-year decision. Even if stuff gets broken or even if I have to pay more money to have someone move it. Let’s make the right decision for long term.” How about you? What’s going on?
Mike: I have some potentially good news here. The contract is finally signed for MicroConf Europe. That took forever. I saw it in an announcement a couple of weeks ago and I talked about it on the podcast. We hadn’t had signed paperwork in place yet and the problem that we ran into is we actually had to switch hotels in the meantime. It really sucked to have to start this process completely over which is why things stall for so long. We do have the signed paperwork, was sent over this morning, everything should be good to go. MicroConf Europe will be in Dubrovnik, Croatia this year and it will be from the 21st to the 23rd. That’s Sunday, Monday, Tuesday of October.
Rob: Looking forward to it. It’s going to be fun. Buy your tickets now. Oh wait, tickets aren’t even on sale yet. When do tickets go on sale?
Mike: Within the next week or two. I’m probably going to be sending an announcement over the next couple of days and then give people a little bit of time just to make sure that they can check their plans or whatever. I don’t want to drop it on people say, “Hey, here’s the date. By the way, here’s the link to buy tickets.” So give people at least a little heads-up.
Rob: Cool, that’s exciting. Glad to have that locked in. Looking forward to seeing folks there in a few months.
Mike: You had asked for an update on the local meetup that I did?
Rob: That’s right.
Mike: I think there were five of us who showed up? There were a dozen people or so that I invited. Some of them just couldn’t make it because either the day of the week or it was just a little bit too far based on the location. I try to picked something that was central to everybody but obviously, it’s going to be farther for some people than others. For some of them, it will end up being a two-hour drive and it wasn’t going to happen.
But like I said, five or six of us got together and it was a good time. Everybody was just chatting about what was going on in their business, how they were doing things, and what sort of markets they were going after. I think two of them were there who had previously purchased my book and then the other two had come in. They were both at MicroConf. It was nice to see a little mix of those guys and both of the guys who bought my book, I think were also in FounderCafe as well.
Rob: Oh, cool. That’s always fun, man. Glad to hear it went well. What’s going on today?
Mike: Today, we’re going to be talking about tactics for minimizing disruptions to your vacation. The idea for this topic came up because there was a thread inside FounderCafe that was posted for somebody who was asking, “How does everybody else take vacation because I’m worried about things like DDoS attacks or servers going down and this and that.” I thought what we do is we spend an episode looking at different ways that you can mitigate the risks to any of the things that could go on that could just end up disrupting your vacation and make it more stressful to go on vacation than to actually be on vacation.
Rob: That makes sense. I think this is obviously a concern of a lot of founders and I think in the early days it’s hard to even know how to approach it. I do hear this question now and again. This is from a FounderCafe thread that someone posted in and there was some pretty end-up discussion about it. I think we’ve talked about this before in like a Q&A episode, probably 100-200 episodes ago and I think this warrants rethinking and refreshing everyone’s mind about how to pull this off every so often.
Mike: To dive right in, we’ve broken this up into several different areas of what your business is. I think the first place to start with is the place where you probably get a lot of headaches that come out of it which is support request from either your existing customers or from prospective customers. Because you don’t want those things to go unanswered for too long and you just want to make sure that you’re responsive to people so that they don’t say, “Hey, what’s going on? Why is this business that I’ve trusted for so long with my data and my application, why are they not responding to me?”
Ideally, what you would do is you outsource and then empower your support people to do things for you. The problem is that not everybody is in the position where they even have support people and that’s, I think, is the most common situation. If you’re one person and you got your business running, it’s a SaaS application or something like that, how do you respond to those support request while you’re on vacation? You don’t want to be on a ferris wheel or something like that or just about to get on a roller-coaster and suddenly, you check your email and there’s these support requests that seem like they’re emergencies, and you got to deal with them.
Ideally, you outsource that stuff, but at the same time, you can also just do some time boxing here. If you block off a little bit of time in the morning and then again in the evening to handle some of those support cases, you can prioritize them. If it’s something that’s pressing or an emergency of some kind—obviously, there’s varying degrees of that—but if it’s something where it’s a feature request or some data that needs to be added, you can stall for time a little bit, say, “Oh, I can get to that tomorrow or the day after, or give me a couple of days. That’s probably the most common phrase that I use if I’m on vacations. “Give me a couple of days and I’ll get to that.” And then if it stretches from a couple of days to four or five, it’s not usually a big deal especially if it’s early on in your vacation.
Rob: The first piece of advice that I give a lot of folks once they get a business to the point where it’s making any kind of money is outsource your support. This is relevant to vacationing but it’s more so relevant to the other 45 weeks of the year. That depends on how much vacation you take. This is one of the biggest stumbling blocks I see is, founders hanging onto frontline support for too long. It’s always the, “Well, it’s only half hour a day or it’s an hour a day and no one can do it because my product’s really technical.”
It’s the same objections every time and every time once that exact person—I’ve seen this over and over and over—finds the right support person, doesn’t mean you just can hire anybody off the street, you may need to hire someone with a little bit of specialization, you may need to hire someone with prior WordPress knowledge, you may need to hire someone who, I don’t know, is an audio engineer on the side, and then knows audio stuff on the side if you have audio plugins. There are ways to troubleshoot this.
Entrepreneurs don’t say can’t as much as other people, and there are always objections and there are always hurdles, but once I see founders outsourcing this, it’s always the same realization at the end of, “Oh my gosh, I’ve should’ve done that six months sooner. I’ve should’ve done that a year ago.” If you get nothing else from this episode, if you’re still doing support, find someone to do it and then that, of course, will carry over into times like this when you go on vacation. It will be so much easier for you to do it.
Mike: The next one isn’t so much as a full-blown section. It’s just a word of advice and caution, which is learn from wisdom of having done this exact same thing. Do not push new code within a week or two of going on vacation. Just do not do it. It almost doesn’t matter what the code is because I’ve seen code that I push live a couple of weeks before going on vacation. This happened this past year with Big Snow Tiny Conf where I pushed it out, everything looked fine, waited a week, everything was still good, went on vacation, and the very first day of vacation something came up. It wasn’t actually that code. It was code that was even further back from that and the situation did not come up where that bug ended up surfacing to the point where something bad happened and I had to deal with it. The longer you wait between the time you go on vacation and the time where you’ve pushed that new code, the more likely you are identifying any problems with it and be able to fix them.
Rob: You mean I shouldn’t push new code and then hop on a 12-hour plane flight with no internet?
Mike: If you have no customers it’s probably not a big deal. You can get away with it with certain apps. If they’re not logging in very often, if it’s something where it sends them a weekly report or it’s batched, that stuff’s not as big a deal. But if it’s something they’re logging into and they rely on it for their business, depending on how critical it is in their business, it can be a really big deal and you don’t want to screw with other people’s business.
Rob: That’s the thing. If you have a team that is able to monitor and fix things, then you can, I’ll say, break this rule or bend this rule. You can push code a couple of days before you head off for vacation.
We had an informal rule at Drip almost from the start where we would not push code after—it got earlier and earlier in the day—but I would say, it was around 2:00 PM, so we’d really try to push stuff right around lunch or right after lunch. We had several hours to really see them in production. That was after it was fully tested, heavily unit tested, and all that stuff. Then we really tried not to push stuff on Friday. If we’re going to push it on Friday, we would push it in the morning like it was a 10:00 AM stop.
It always varies. If it’s s typo fix or it’s one little Javascript thing on one screen that could potentially break some minor feature, we’re obviously more loose with it. But if it was some major thing about rerouting the email sending through this different pipeline or if it was modifications to the scheduling, email scheduler, like really big, big deals that could really impact someone’s business. Those things we took with a lot of caution.
It wasn’t again, it wasn’t just about vacation but it was just about having sanity check on. If you have a team that can fix it, you have a little more leeway. But especially if you’re a single founder operating on your own, you need to be very cognizant of not breaking your app.
Mike: With BlueTick, most of the activity and usage is during the week and on the weekends it really drops down quite a bit. Like any major changes, I’m typically pushing them on a weekend because it’s going to impact a much lower number of people. During the week, it’s a bigger deal. I can push something over the weekend and monitor it.
As long as I’m not seeing anything major go wrong with like the smaller number of emails are being sent, it’s not as big a deal. But otherwise, other major changes will go live 8:00, 10:00 o’clock at night, and then I just watch it a couple of hours to make sure that nothing major is going on and check it first thing in the morning to make sure nothing else happened. But everyone’s app is different, so you have to take that into account.
The next category to look at is sales and presales. If you are doing demos of any kind—typically you have some sort of a way for people to schedule those—the first thing you should do is just block off your calendar so that people can’t book sales demos with you while you’re on vacation. There’s times where that’s absolutely necessary or where you may need to do a demo for somebody.
I actually have on my calendar, there are certain unlisted links that you can use that will essentially ignore everything and it doesn’t matter. I use those specifically for situations where I really want to talk to somebody or it’s a high-profile customer, I think that it’s going to be a good fit or I’ve been working on for a long time—those I want to give a little bit more priority to. I’m more lenient with those especially in terms of the time of day and things like that. But you don’t want to just let anybody sign up for your sales demos if you’re not going to be around because then you’re still subjecting yourself to the mercy of whoever is putting themselves on your calendar.
Another thing is using an out-of-office responder. Now, I think this is a judgment call. I’ve gone on vacations without putting those in there just because I didn’t want to having sending out messages that says, “Hey, I’m on vacation,” but at the same time, you may want to do that so that it does set expectations. It depends on how much email you get and what types of people you’re getting that email from.
The next thing you can do to help minimize some of the disruptions to your vacation is to hire somebody who is technical to be on-call. This could probably be a lot less expensive than you might think because you’re not actually paying them if they’re not working. You may say, “Hey look, I’ll give you a couple of hundred dollars to be on-call and if there’s issues I’ll send them your way.”
If you’re going to do something like this, obviously you want it to be somebody you can trust. Either a friend, a colleague, a mastermind group member. Those are all great people to turn to. Or if you have a DBA who’s been helping you manage your database, those are all people who are probably going to be at least somewhat familiar with you and the technologies you use. But you can provide them with at least minimal documentation and training on how things are architected, and what would need to be done or what things impact other things in the environment that they may need to look at if there is a problem. Obviously, you need to give them credentials to be able to login and get access to stuff.
Another thing you can look at is having any sort of a hosted infrastructure can be really helpful in this. If you’re using AWS, a lot of those things are generally taken cared of for you. But if you have your own virtual machines, maybe hosted on Rackspace or something like that, those types of companies do have their own support people where you can say, “Hey, let me turn this over to them,” and then they may require an on-going support contract but that might also be something you look at for a much longer period of time and on an ongoing basis.
Rob: This one’s tough. I think if there’s network connectivity issues or if there’s server issues, and you’re on AWS—some of them assume most people are probably on some type of PaaS, Platform as a Service, like AWS or Azure—then you can hand that over to them. But so much of this stuff winds up being application code. That’s a thing that’s changing constantly. That’s a thing that is vulnerable.
I think getting someone up to speed just for a two-week vacation is going to be really, really tough, even if you provide docs and all that stuff. You know how it is. It is such a jungle when you haven’t been working on an app for at least a couple of months and have some exposure. I can imagine if you had a junior developer who you’d ramp up a couple of months. He or she could handle 20% or 30% of the stuff that came up and then escalate to you as needed.
But try to get someone up to speed, just drop them into an app and be like, “Alright, if these things go wrong, try to do this and try to troubleshoot that,” I think this is a really tough approach. I haven’t heard of anyone doing this, I guess, successfully that hasn’t already have that developer doing it on an ongoing basis, whether it’s a contractor who’s worked on the code from now and again.
I like your idea of the DBA. The Drip DBA who worked with us for years and is still the DBA there. He’s a contractor but he would have been able to dip into the application code a little bit because he had enough knowledge of the app just digging around in there.
Mike: I think there’s a difference between having somebody who is technical enough, is the sysadmin, at the sysadmin level versus somebody who, like, “Hey, I need you to go look into this bug,” stuff like that. I’m thinking probably be pushed off to the side for the most part, especially if you’ve done the due diligence to say, “Okay, we’re not going to push any new application code for a week or two.”
Those things should have ironed themselves out for the most part, but then when you get into things like network connectivity issues or the database isn’t responding, things like that, most technical people, I think, should be able to handle that stuff. If you have somebody who’s a DBA or a systems engineer, they can look at that stuff and start troubleshooting them. They’re not so much looking at the application itself. They’re looking at how do all these moving parts touch each other and why are they not working well together. It’s being able to at least identify that type of stuff.
That leads us into the next section which is using third-party monitoring services. Most of us, I think, have our own logging mechanisms of some kind that are either built into the application or are taking those logs and putting them off onto a third-party service. But there’s lots of other third-party monitoring tools that you can use like Pingdom and uptime.com. Rob, you had a […] in here I’d never used or heard of that one, but—
Rob: That’s Laura Roeders’ new startup.
Mike: Ah, okay. Cool. There’s also PagerDuty and Uptime Robot. There’s another service that I use called Datadog, which allows you to essentially constantly monitor what’s going on your servers and get detailed information about performance metrics of the system’s various aspects of it, whether it’s the database, or the application, or just different processes that are running. I use just that because there’s lots of different things that need to be monitored but conjunction of all these things is that, you can use those to figure out what needs to be escalated. If there’s certain things that cross a certain threshold for you to actually pay attention to it, then those are the things that you would need to escalate to either the technical person that you have, or a support person, or even maybe ends up going to you at some point.
Rob: Our next tactic is to turn off your phone and email during the day. Basically, automate any major escalations to SMS and ignore everything else so, ignore your email. Essentially ignore your support queues based on what we’re saying above is to try to get to the point where you can vacation, enjoy, and be present with yourself, or with your family, or whoever you’re on vacation with, and not feel the need to be checking inboxes all day, and not feel like something’s going to slip through and you’re going to miss it, or not to get a ping, a notification on your phone every time an email arrives.
Because of that, it’s catastrophic for enjoying your vacation. I think it’s a big thing. I’m someone who does not get notifications when emails arrive anyways. I think that’s a pretty bad idea for your productivity but if you do that when you’re not vacationing, then you need to turn that off when you are.
Mike: I turn pretty much all notifications on my phone off. The only one that would end up coming up and surfacing for the most part is certain things coming from the server logs, they pop-up on my phone, and then text messages. That’s basically it. Obviously, phone calls will come through but other than that, nothing is pushed to me in an interruptive way.
The last thing to take a look at is do some technical preparation, create a checklist, and use that checklist to look for potential upcoming issues. On this check list you would want to put things like, “Are my SSL certificates going to expire anytime soon? Does the system have enough space? Does it look like it might run out sometime in the near future? What is the CPU usage look like? Do I need to do any sort of upgrades, or give it additional disk space, or plan for more resource capacity in the meantime that would help me get through that and help mitigate any potential problems that would result from, maybe you get an influx of traffic, you get a bunch of sign-ups and your server gets bogged down?” If you upgrade the infrastructure a little bit, then that would help take care of it.
The other thing you have to look at is things that are completely beyond your control. For example, a DDoS attack. What happens if your application or your website suffers a DDoS attack? There’s other things out there, there’s services like Cloudflare that can help you out with that. You can also build redundancy into the application or into the website itself. But again, these are types of things that could come up but they’re also typically lower risk, unless you have a large enough footprint. Early on, these aren’t the things that you probably going to have to worry about too much but even in the case of a DDoS attack, your customers are probably going to be pretty understanding. It’s not like you did something wrong.
Rob: Yeah and these are things that you want to do anyways. This is stuff that helps if you have it during your vacation but any of these things can happen at any time. I’ve had SSL certs expire on me. I think it’s only been once and it was when I acquired an app, and of course, the contact email for the SSL cert expiring went to the old owner, like their personal email, so I didn’t get any emails. Suddenly, boom on a Sunday afternoon—it was HitTail—the Sunday afternoon, the site isn’t SSL anymore, isn’t secure, and Google Chrome has a conniption when that happen.
I remember calling GoDaddy on the phone, Sunday afternoon at 3:00, I’m thinking, “There’s just no chance. This is going to be a 24 hours or something and man, […] help me right away.” I’m assuming this happens to a lot of people because I think it was within 30 minutes they issued a new cert and I was able to get it.
That would be terrible to happen on your vacation. Like you said, you’re out on, what was the example that you used earlier?
Mike: Like on a roller coaster or like on a Ferris wheel.
Rob: Yeah, or I’m thinking we were snorkeling a few weeks ago in Florida, or you’re out on some safari, or you’re doing something where either you have almost no cell service or you just don’t have the headspace or connectivity to handle this well. It’ll be a stressor and kind of ruin that part of your vacation.
These are the kinds of things to have that check list that you’re probably thinking about on an ongoing basis but really revisit before you head off the grid.
Mike: One thing I found a little bit helpful for things like expiring SSL certificates or even domain name renewals is I actually add them into my calendar and create it as a recurring task that needs to be addressed at some point. That way, I actually use Teamwork for that piece of it but all of them are in there, so that I know that even if I don’t get a notification from whoever that is, I still see it as a task that needs to be taken cared of. If I renew for two years, it’s not a big deal. I can just mark them off. But at least that way, I have my own internal notification that serves as something of a backup.
Rob: That’s a nice way to do it.
Mike: Helps you avoid lost domain names, too, because I’ve had that happen which is why I have that system in place now.
Rob: Totally. Email is mostly reliable and that non-mostly part, the part that is outside of them, the most mostly circle can be pretty bad for domain names, SSL certs, and all that. I think that about wraps it up for today.
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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: And I’m Rob.
Mike: We’re here to share our experiences to help you avoid the same mistakes we’ve made. How are you doing this week, Rob?
Rob: I’m doing okay. I’m a little tired. We landed back from California. Landed in Minneapolis last night around midnight, hopped a lift with the kids, and got home, and in bed around 1:00 AM. I’m on Pacific time so I had a couple of hour times change this morning trying to get up. It’s a little slow getting going but overall, really enjoyed our time in California.
I had talked about previously that we’re going to spend some time with my family in the Bay Area. Our kids had a music camp in San Francisco and then we went and saw Sherry’s folks up in far north California.
Overall, it was good vacation; some vacation, some kind of work stuff. The camp isn’t exactly vacation because it’s pretty intense music practice for the boys. Each day we have to be present and stuff. It wasn’t like we could just kick back and sip martinis or whatever.
Mike: You don’t get to send them for the day?
Rob: No. That would have been ideal. It’s less at camp. It’s actually called an institute, the Suzuki institute. You go and it’s five or six hours a day of them playing instruments, and the parents have to be involved to a certain extent, so you’re sitting in there with them. That’s where I was like, it’s some vacation and it’s some not-vacation. It’s fun in the afternoons and evenings when we took the boys and did stuff but otherwise, got there and back unscathe, which is good when five people are traveling and we lug a cello with us on the airplane. In true chaotic fashion we were back, like I said, landed last night at midnight and then we close on our new house tomorrow in Minneapolis. We show up and sign papers in the morning.
Mike: Stick around for a while then, huh?
Rob: I know, yeah. That was the decision. We really evaluated it after I left the Drip a couple of months ago. It was a decision point like, “Okay, we’ve been in Minneapolis a little less than two years and we can move anywhere. That always sounds great in theory but when you have no real ties anywhere for work—we have family in California—but there’s no reason for us to live in any particular city. I shouldn’t say no reason. There’s no requirement that we live in any particular city; becomes a very difficult thing to tackle. It’s a paradox of choice, it’s almost too much choice.
We evaluated going overseas, and then we evaluated all these cities on them, basically the west coast, even Austin, Denver, Colorado Springs, and Sherry threw Hawaii or Maui. Actually, all these sound great but then you look at what it’s actually like to live there. You look at the days of sun per year, you look at the cost of living, you look what the traffic is like, and you read on Quora. You say, “What’s it like to live in insert city?” You can start to get a feel for what it might actually be like and certain ones just right off the bat are just removed from the list. There are just deal breakers that come up.
I love the Bay Area, I grew up there, and it’s the tech hub of the world, so to speak. But the cost of living there is outrageous. It always has been but it’s catastrophic, basically, and the traffic, I couldn’t deal with them. I would like to live in parts of LA but the traffic there is–you know, it’s just on and on and on there. There’s just things that knock it off.
It was a long and detailed conversation but eventually we got to the point where we decided that staying here was the best option of all of them. But it was a good exercise to go through, to arrive at a decision, and feel good about it, and then be like, “We’re going to buy a house.” We figured that this is a 10-year decision. We have kids that are basically 7, 8, and 10. In 10 years, they’ll pretty much all be gone from the house. At that point we will very likely either keep the house and get a second one somewhere sunny or we’ll sell the house and completely relocate.
Mike: I would have completely lost the pool on any bets that might have been placed about where you’re going to live after your time at Drip is over. There’s no way I would have picked you sticking around in Minneapolis, like there is no chance.
Rob: I think a lot of people wouldn’t have thought that and told us that, and frankly, I probably would have lost the pool as well. I would have imagined we would probably move back somewhere in California but there, at a certain point, quality of life and other things factor in. We lived in a lot of places. We visited a ton and we’ve lived in a lot.
Every once in awhile, you find a place where it’s like, “Wow, this is a world class city with world class amenities, but without so many of the problems of other cities that we’ve lived in,” including location, cost of living, crime, good schools, you just go on a list of all the things, access to airport, delta hub, all the stuff. As we looked at all the other cities, it was just so hard to even think about giving up each of the things that we have here. I wouldn’t have called it from the start, either. I think Sherry might have. She knew it was a pretty cool city here. I had no idea before we moved here.
That is the story. We close tomorrow and then we basically move over the weekend. The nice part is the house, it’s only a block away so it’s an easy move. I can move my own guitars and expensive stuff without worrying about movers trucking a dent truck.
Mike: Yeah, I think that would have been the deciding factor for me, it was that I wouldn’t have had to move my stuff. That’s why I would have just stayed there.
Rob: Totally. No, I know. I’ll admit that we used to play factor but at this point, we’ve done it enough that’s it’s like, “You know what, it’s a temporary pain. If I want to make it a 10-year decision, I’m going to make the right 10-year decision. Even if stuff gets broken or even if I have to pay more money to have someone move it. Let’s make the right decision for long term.” How about you? What’s going on?
Mike: I have some potentially good news here. The contract is finally signed for MicroConf Europe. That took forever. I saw it in an announcement a couple of weeks ago and I talked about it on the podcast. We hadn’t had signed paperwork in place yet and the problem that we ran into is we actually had to switch hotels in the meantime. It really sucked to have to start this process completely over which is why things stall for so long. We do have the signed paperwork, was sent over this morning, everything should be good to go. MicroConf Europe will be in Dubrovnik, Croatia this year and it will be from the 21st to the 23rd. That’s Sunday, Monday, Tuesday of October.
Rob: Looking forward to it. It’s going to be fun. Buy your tickets now. Oh wait, tickets aren’t even on sale yet. When do tickets go on sale?
Mike: Within the next week or two. I’m probably going to be sending an announcement over the next couple of days and then give people a little bit of time just to make sure that they can check their plans or whatever. I don’t want to drop it on people say, “Hey, here’s the date. By the way, here’s the link to buy tickets.” So give people at least a little heads-up.
Rob: Cool, that’s exciting. Glad to have that locked in. Looking forward to seeing folks there in a few months.
Mike: You had asked for an update on the local meetup that I did?
Rob: That’s right.
Mike: I think there were five of us who showed up? There were a dozen people or so that I invited. Some of them just couldn’t make it because either the day of the week or it was just a little bit too far based on the location. I try to picked something that was central to everybody but obviously, it’s going to be farther for some people than others. For some of them, it will end up being a two-hour drive and it wasn’t going to happen.
But like I said, five or six of us got together and it was a good time. Everybody was just chatting about what was going on in their business, how they were doing things, and what sort of markets they were going after. I think two of them were there who had previously purchased my book and then the other two had come in. They were both at MicroConf. It was nice to see a little mix of those guys and both of the guys who bought my book, I think were also in FounderCafe as well.
Rob: Oh, cool. That’s always fun, man. Glad to hear it went well. What’s going on today?
Mike: Today, we’re going to be talking about tactics for minimizing disruptions to your vacation. The idea for this topic came up because there was a thread inside FounderCafe that was posted for somebody who was asking, “How does everybody else take vacation because I’m worried about things like DDoS attacks or servers going down and this and that.” I thought what we do is we spend an episode looking at different ways that you can mitigate the risks to any of the things that could go on that could just end up disrupting your vacation and make it more stressful to go on vacation than to actually be on vacation.
Rob: That makes sense. I think this is obviously a concern of a lot of founders and I think in the early days it’s hard to even know how to approach it. I do hear this question now and again. This is from a FounderCafe thread that someone posted in and there was some pretty end-up discussion about it. I think we’ve talked about this before in like a Q&A episode, probably 100-200 episodes ago and I think this warrants rethinking and refreshing everyone’s mind about how to pull this off every so often.
Mike: To dive right in, we’ve broken this up into several different areas of what your business is. I think the first place to start with is the place where you probably get a lot of headaches that come out of it which is support request from either your existing customers or from prospective customers. Because you don’t want those things to go unanswered for too long and you just want to make sure that you’re responsive to people so that they don’t say, “Hey, what’s going on? Why is this business that I’ve trusted for so long with my data and my application, why are they not responding to me?”
Ideally, what you would do is you outsource and then empower your support people to do things for you. The problem is that not everybody is in the position where they even have support people and that’s, I think, is the most common situation. If you’re one person and you got your business running, it’s a SaaS application or something like that, how do you respond to those support request while you’re on vacation? You don’t want to be on a ferris wheel or something like that or just about to get on a roller-coaster and suddenly, you check your email and there’s these support requests that seem like they’re emergencies, and you got to deal with them.
Ideally, you outsource that stuff, but at the same time, you can also just do some time boxing here. If you block off a little bit of time in the morning and then again in the evening to handle some of those support cases, you can prioritize them. If it’s something that’s pressing or an emergency of some kind—obviously, there’s varying degrees of that—but if it’s something where it’s a feature request or some data that needs to be added, you can stall for time a little bit, say, “Oh, I can get to that tomorrow or the day after, or give me a couple of days. That’s probably the most common phrase that I use if I’m on vacations. “Give me a couple of days and I’ll get to that.” And then if it stretches from a couple of days to four or five, it’s not usually a big deal especially if it’s early on in your vacation.
Rob: The first piece of advice that I give a lot of folks once they get a business to the point where it’s making any kind of money is outsource your support. This is relevant to vacationing but it’s more so relevant to the other 45 weeks of the year. That depends on how much vacation you take. This is one of the biggest stumbling blocks I see is, founders hanging onto frontline support for too long. It’s always the, “Well, it’s only half hour a day or it’s an hour a day and no one can do it because my product’s really technical.”
It’s the same objections every time and every time once that exact person—I’ve seen this over and over and over—finds the right support person, doesn’t mean you just can hire anybody off the street, you may need to hire someone with a little bit of specialization, you may need to hire someone with prior WordPress knowledge, you may need to hire someone who, I don’t know, is an audio engineer on the side, and then knows audio stuff on the side if you have audio plugins. There are ways to troubleshoot this.
Entrepreneurs don’t say can’t as much as other people, and there are always objections and there are always hurdles, but once I see founders outsourcing this, it’s always the same realization at the end of, “Oh my gosh, I’ve should’ve done that six months sooner. I’ve should’ve done that a year ago.” If you get nothing else from this episode, if you’re still doing support, find someone to do it and then that, of course, will carry over into times like this when you go on vacation. It will be so much easier for you to do it.
Mike: The next one isn’t so much as a full-blown section. It’s just a word of advice and caution, which is learn from wisdom of having done this exact same thing. Do not push new code within a week or two of going on vacation. Just do not do it. It almost doesn’t matter what the code is because I’ve seen code that I push live a couple of weeks before going on vacation. This happened this past year with Big Snow Tiny Conf where I pushed it out, everything looked fine, waited a week, everything was still good, went on vacation, and the very first day of vacation something came up. It wasn’t actually that code. It was code that was even further back from that and the situation did not come up where that bug ended up surfacing to the point where something bad happened and I had to deal with it. The longer you wait between the time you go on vacation and the time where you’ve pushed that new code, the more likely you are identifying any problems with it and be able to fix them.
Rob: You mean I shouldn’t push new code and then hop on a 12-hour plane flight with no internet?
Mike: If you have no customers it’s probably not a big deal. You can get away with it with certain apps. If they’re not logging in very often, if it’s something where it sends them a weekly report or it’s batched, that stuff’s not as big a deal. But if it’s something they’re logging into and they rely on it for their business, depending on how critical it is in their business, it can be a really big deal and you don’t want to screw with other people’s business.
Rob: That’s the thing. If you have a team that is able to monitor and fix things, then you can, I’ll say, break this rule or bend this rule. You can push code a couple of days before you head off for vacation.
We had an informal rule at Drip almost from the start where we would not push code after—it got earlier and earlier in the day—but I would say, it was around 2:00 PM, so we’d really try to push stuff right around lunch or right after lunch. We had several hours to really see them in production. That was after it was fully tested, heavily unit tested, and all that stuff. Then we really tried not to push stuff on Friday. If we’re going to push it on Friday, we would push it in the morning like it was a 10:00 AM stop.
It always varies. If it’s s typo fix or it’s one little Javascript thing on one screen that could potentially break some minor feature, we’re obviously more loose with it. But if it was some major thing about rerouting the email sending through this different pipeline or if it was modifications to the scheduling, email scheduler, like really big, big deals that could really impact someone’s business. Those things we took with a lot of caution.
It wasn’t again, it wasn’t just about vacation but it was just about having sanity check on. If you have a team that can fix it, you have a little more leeway. But especially if you’re a single founder operating on your own, you need to be very cognizant of not breaking your app.
Mike: With BlueTick, most of the activity and usage is during the week and on the weekends it really drops down quite a bit. Like any major changes, I’m typically pushing them on a weekend because it’s going to impact a much lower number of people. During the week, it’s a bigger deal. I can push something over the weekend and monitor it.
As long as I’m not seeing anything major go wrong with like the smaller number of emails are being sent, it’s not as big a deal. But otherwise, other major changes will go live 8:00, 10:00 o’clock at night, and then I just watch it a couple of hours to make sure that nothing major is going on and check it first thing in the morning to make sure nothing else happened. But everyone’s app is different, so you have to take that into account.
The next category to look at is sales and presales. If you are doing demos of any kind—typically you have some sort of a way for people to schedule those—the first thing you should do is just block off your calendar so that people can’t book sales demos with you while you’re on vacation. There’s times where that’s absolutely necessary or where you may need to do a demo for somebody.
I actually have on my calendar, there are certain unlisted links that you can use that will essentially ignore everything and it doesn’t matter. I use those specifically for situations where I really want to talk to somebody or it’s a high-profile customer, I think that it’s going to be a good fit or I’ve been working on for a long time—those I want to give a little bit more priority to. I’m more lenient with those especially in terms of the time of day and things like that. But you don’t want to just let anybody sign up for your sales demos if you’re not going to be around because then you’re still subjecting yourself to the mercy of whoever is putting themselves on your calendar.
Another thing is using an out-of-office responder. Now, I think this is a judgment call. I’ve gone on vacations without putting those in there just because I didn’t want to having sending out messages that says, “Hey, I’m on vacation,” but at the same time, you may want to do that so that it does set expectations. It depends on how much email you get and what types of people you’re getting that email from.
The next thing you can do to help minimize some of the disruptions to your vacation is to hire somebody who is technical to be on-call. This could probably be a lot less expensive than you might think because you’re not actually paying them if they’re not working. You may say, “Hey look, I’ll give you a couple of hundred dollars to be on-call and if there’s issues I’ll send them your way.”
If you’re going to do something like this, obviously you want it to be somebody you can trust. Either a friend, a colleague, a mastermind group member. Those are all great people to turn to. Or if you have a DBA who’s been helping you manage your database, those are all people who are probably going to be at least somewhat familiar with you and the technologies you use. But you can provide them with at least minimal documentation and training on how things are architected, and what would need to be done or what things impact other things in the environment that they may need to look at if there is a problem. Obviously, you need to give them credentials to be able to login and get access to stuff.
Another thing you can look at is having any sort of a hosted infrastructure can be really helpful in this. If you’re using AWS, a lot of those things are generally taken cared of for you. But if you have your own virtual machines, maybe hosted on Rackspace or something like that, those types of companies do have their own support people where you can say, “Hey, let me turn this over to them,” and then they may require an on-going support contract but that might also be something you look at for a much longer period of time and on an ongoing basis.
Rob: This one’s tough. I think if there’s network connectivity issues or if there’s server issues, and you’re on AWS—some of them assume most people are probably on some type of PaaS, Platform as a Service, like AWS or Azure—then you can hand that over to them. But so much of this stuff winds up being application code. That’s a thing that’s changing constantly. That’s a thing that is vulnerable.
I think getting someone up to speed just for a two-week vacation is going to be really, really tough, even if you provide docs and all that stuff. You know how it is. It is such a jungle when you haven’t been working on an app for at least a couple of months and have some exposure. I can imagine if you had a junior developer who you’d ramp up a couple of months. He or she could handle 20% or 30% of the stuff that came up and then escalate to you as needed.
But try to get someone up to speed, just drop them into an app and be like, “Alright, if these things go wrong, try to do this and try to troubleshoot that,” I think this is a really tough approach. I haven’t heard of anyone doing this, I guess, successfully that hasn’t already have that developer doing it on an ongoing basis, whether it’s a contractor who’s worked on the code from now and again.
I like your idea of the DBA. The Drip DBA who worked with us for years and is still the DBA there. He’s a contractor but he would have been able to dip into the application code a little bit because he had enough knowledge of the app just digging around in there.
Mike: I think there’s a difference between having somebody who is technical enough, is the sysadmin, at the sysadmin level versus somebody who, like, “Hey, I need you to go look into this bug,” stuff like that. I’m thinking probably be pushed off to the side for the most part, especially if you’ve done the due diligence to say, “Okay, we’re not going to push any new application code for a week or two.”
Those things should have ironed themselves out for the most part, but then when you get into things like network connectivity issues or the database isn’t responding, things like that, most technical people, I think, should be able to handle that stuff. If you have somebody who’s a DBA or a systems engineer, they can look at that stuff and start troubleshooting them. They’re not so much looking at the application itself. They’re looking at how do all these moving parts touch each other and why are they not working well together. It’s being able to at least identify that type of stuff.
That leads us into the next section which is using third-party monitoring services. Most of us, I think, have our own logging mechanisms of some kind that are either built into the application or are taking those logs and putting them off onto a third-party service. But there’s lots of other third-party monitoring tools that you can use like Pingdom and uptime.com. Rob, you had a […] in here I’d never used or heard of that one, but—
Rob: That’s Laura Roeders’ new startup.
Mike: Ah, okay. Cool. There’s also PagerDuty and Uptime Robot. There’s another service that I use called Datadog, which allows you to essentially constantly monitor what’s going on your servers and get detailed information about performance metrics of the system’s various aspects of it, whether it’s the database, or the application, or just different processes that are running. I use just that because there’s lots of different things that need to be monitored but conjunction of all these things is that, you can use those to figure out what needs to be escalated. If there’s certain things that cross a certain threshold for you to actually pay attention to it, then those are the things that you would need to escalate to either the technical person that you have, or a support person, or even maybe ends up going to you at some point.
Rob: Our next tactic is to turn off your phone and email during the day. Basically, automate any major escalations to SMS and ignore everything else so, ignore your email. Essentially ignore your support queues based on what we’re saying above is to try to get to the point where you can vacation, enjoy, and be present with yourself, or with your family, or whoever you’re on vacation with, and not feel the need to be checking inboxes all day, and not feel like something’s going to slip through and you’re going to miss it, or not to get a ping, a notification on your phone every time an email arrives.
Because of that, it’s catastrophic for enjoying your vacation. I think it’s a big thing. I’m someone who does not get notifications when emails arrive anyways. I think that’s a pretty bad idea for your productivity but if you do that when you’re not vacationing, then you need to turn that off when you are.
Mike: I turn pretty much all notifications on my phone off. The only one that would end up coming up and surfacing for the most part is certain things coming from the server logs, they pop-up on my phone, and then text messages. That’s basically it. Obviously, phone calls will come through but other than that, nothing is pushed to me in an interruptive way.
The last thing to take a look at is do some technical preparation, create a checklist, and use that checklist to look for potential upcoming issues. On this check list you would want to put things like, “Are my SSL certificates going to expire anytime soon? Does the system have enough space? Does it look like it might run out sometime in the near future? What is the CPU usage look like? Do I need to do any sort of upgrades, or give it additional disk space, or plan for more resource capacity in the meantime that would help me get through that and help mitigate any potential problems that would result from, maybe you get an influx of traffic, you get a bunch of sign-ups and your server gets bogged down?” If you upgrade the infrastructure a little bit, then that would help take care of it.
The other thing you have to look at is things that are completely beyond your control. For example, a DDoS attack. What happens if your application or your website suffers a DDoS attack? There’s other things out there, there’s services like Cloudflare that can help you out with that. You can also build redundancy into the application or into the website itself. But again, these are types of things that could come up but they’re also typically lower risk, unless you have a large enough footprint. Early on, these aren’t the things that you probably going to have to worry about too much but even in the case of a DDoS attack, your customers are probably going to be pretty understanding. It’s not like you did something wrong.
Rob: Yeah and these are things that you want to do anyways. This is stuff that helps if you have it during your vacation but any of these things can happen at any time. I’ve had SSL certs expire on me. I think it’s only been once and it was when I acquired an app, and of course, the contact email for the SSL cert expiring went to the old owner, like their personal email, so I didn’t get any emails. Suddenly, boom on a Sunday afternoon—it was HitTail—the Sunday afternoon, the site isn’t SSL anymore, isn’t secure, and Google Chrome has a conniption when that happen.
I remember calling GoDaddy on the phone, Sunday afternoon at 3:00, I’m thinking, “There’s just no chance. This is going to be a 24 hours or something and man, […] help me right away.” I’m assuming this happens to a lot of people because I think it was within 30 minutes they issued a new cert and I was able to get it.
That would be terrible to happen on your vacation. Like you said, you’re out on, what was the example that you used earlier?
Mike: Like on a roller coaster or like on a Ferris wheel.
Rob: Yeah, or I’m thinking we were snorkeling a few weeks ago in Florida, or you’re out on some safari, or you’re doing something where either you have almost no cell service or you just don’t have the headspace or connectivity to handle this well. It’ll be a stressor and kind of ruin that part of your vacation.
These are the kinds of things to have that check list that you’re probably thinking about on an ongoing basis but really revisit before you head off the grid.
Mike: One thing I found a little bit helpful for things like expiring SSL certificates or even domain name renewals is I actually add them into my calendar and create it as a recurring task that needs to be addressed at some point. That way, I actually use Teamwork for that piece of it but all of them are in there, so that I know that even if I don’t get a notification from whoever that is, I still see it as a task that needs to be taken cared of. If I renew for two years, it’s not a big deal. I can just mark them off. But at least that way, I have my own internal notification that serves as something of a backup.
Rob: That’s a nice way to do it.
Mike: Helps you avoid lost domain names, too, because I’ve had that happen which is why I have that system in place now.
Rob: Totally. Email is mostly reliable and that non-mostly part, the part that is outside of them, the most mostly circle can be pretty bad for domain names, SSL certs, and all that. I think that about wraps it up for today.
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Episode 401 | Why You Shouldn’t Listen to Your Customers (And What You Should Do Instead)
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about why you shouldn’t listen to your customers. Not all requests are created equal. The guys breakdown customer feature requests into three categories and give tips on how to get the most out of them.
Items mentioned in this episode:
Rob: In this episode of Startups For the Rest of Us, Mike and I talk about why you shouldn’t listen to your customers and what you should do instead. This is Startups For the Rest of Us episode 401.
Welcome to Startups For the Rest of Us. The podcast that helps developers, designers, and entrepreneurs be awesome in building, launching, and growing software products whether you built your product or just thinking about it. I’m Rob.
Mike: And I’m Mike.
Rob: We’re here to share our experiences to help people with the same mistakes we made. To where this week sir?
Mike: Well, I submitted the Bluetick Zapier integration to Zapier, to see about promoting it through their public availability process. I’ve already heard back from them. I’ve got a list of things they want to see changed to conform to the standards that they kind of set for everybody to maintain consistency between Zap. I got to go back, and look at those, and make some changes and then publish it but things did not seem to be too terrible.
Rob: Nice, that’s super cool man. Once that goes live, it’s nice to be able to refer customers to Zapier when they’re trying to be something in your app that you haven’t built yet—when you don’t have an integration. That was always the useful piece for us.
Mike: Yeah. Well, the thing is like the Zapier integration is already there, it’s just invite only and there’s a link inside the app where they can click on that link and go over there. The difference is it will be public so that when people are searching inside Zapier to see where there is a Bluetick Zap, they’ll be able to see it but I’ll have them to login in Bluetick first. At that point, they can add it into their account but I guess you can’t ready do anything without an API key anyways.
Rob: I remembered when Zapier promoted HitTail early on we got a bump and then Drip, I remember it was—I think it was more or less, but it definitely in the early days when you’re really scraping and clawing for every customer. I think that you get included in the email newsletter, tweeted out, I think, and every bit helps at that point. Even if you only get a couple new customers from someone hearing about it, it can move the needle for you in the early days.
Mike: Yes. I’m hoping to see that at least through the initial process in the next couple of weeks or so. I don’t know how long it has to be in their beta for before it ends up being live. I think that they said that—when I was looking through the specs—they said, “You should have at least one person using each Zap and you need to have at least 20 active Zaps,” or something like that. They’ve revised their stats page to see if you can actually see more about who’s using it, how many people are using the different Zaps that you’ve published or made available. I’m up to like 400 active or something like that, and only need 20.
Rob: Oh, yeah. That’s a lot more than we went live with it. That’s cool. segment.com will be another one. You’ll probably want to do it at some point—integrate with them. That’s another big hub to get not only the promotion but it’s just nice because people are going to want to create reports or do things with the data that you’re just not going to have the time to build and referring about to Segment, it can help there.
Mike: Yeah. Ultimately, I’ll look into that one as well. The other thing I’m in the middle of right now is kind of specking out with the public APIs going to look like. Everything in there is all used internally inside the app and then I have a specific endpoint that’s used solely for Zapier and then next step is to really kind of take that and say, “Okay, when are we going to make it public?” because there’s a couple of customers who have wanted to use a public API but I told them to kind of hold off and just use Zapier. I had a call this morning with somebody about what the specifics things they needed from a public API from us are. There’s at least one other customer that I want to talk to who I know they do a lot of extensive development work and are using Bluetick as the backend CRM for their entire company. They got several mailboxes attached and they want to be able to use that functionality inside there. I definitely want to have a conversation with them first before I start making anything publicly available.
Rob: That makes sense. For me, I am in California when this episode airs. We’re heading there for about two weeks. We’re going to see different groups of family in different areas and my sons are going to a cello and violin camp—Suzuki String Camp in San Francisco. It should be fun. It’s where I’m from. It’s nice to get back there once or twice a year to kind of see the family and all that.
Mike: Cool. Hopefully you won’t be selling the company while you’re out there.
Rob: I know. That’s the old story right? That I was signing the final docs at the cello camp a couple years ago.
Mike: Getting dirty looks.
Rob: Indeed. Dirty looks from the instructor.
I titled this episode Why You Shouldn’t Listen to Your Customers and What You Should Do Instead. Realistically, it’s about deciding which feature request to build and which not to—not even feature request, just deciding what to build in general. There’s always the popular meme of like launch soon and then your customers will tell you what to build.
I’ve seen struggles with that. Number one, often times your customers don’t know really what they’re trying to do or they’ll tell you to build things that you shouldn’t build but you should do it a different way. Or they’re just going to tell you to build your competitor. They’re going to say, “Hey, I’ve used Infusionsoft and it has these features and you don’t have them. Can you just build this, this, that, and this?” We have these all the time in the early days.
Remember, early Drip user wanted a mobile app. He wanted kind of like an iOS and an android app. He wanted these very specific reports that made sense in Mailchimp but wouldn’t have made sense for Drip to have. He’s not a software person, his idea was just to have this be Mailchimp but with a cleaner interface and that wasn’t what we wanted to build.
It’s really easy when you’re getting multiple feature request per day. I left Drip a couple of months ago, I think we get 150-200 feature requests per month. It’s a substantial line and at a certain point you have to figure out how you’re going to evaluate what to build and what not to build.
I see these like there’s three types of feature request. The first type is—I humorously named this, the crackpots—but it’s kind of odd ball request that you know that there’s no chance you’re going to build, that kind of come out of left field. Some examples of those are, people requiring you or asking you for feature that would require you to build an entirely new product. For example, “Why can’t I use your email service provider to publish blog posts on my WordPress site, or to record my podcast and publish them, or to do all of my social media marketing?” Some people would ask us to, “You do email, I want you to do Facebook, Instagram, Twitter, and do these integrations.” It’s not that we would never build those but people were asking these when we didn’t even have very basic features. In the first year or two, there were folks who were asking for these. It’s just like, “Yeah, I know. There’s no chance we’re going to build that.”
The other one is like asking you to clone your competitors. Like, “It’d be great if you could add a shopping cart, and CRM, and lead scoring.” Basically be Infusionsoft. I was like, “Nope, that’s not our goal.” Or finally, features that are the opposite of your product strengths. I remember someone saying like, “I like that your UI is so streamlined but can you add all these options to fit my rare and unique used case?” They didn’t used those phrases but that’s the kind of stuff that could come across.
Crackpot may not be the best name for them but they’re really the ones that are obvious to you that you shouldn’t build them.
Mike: I think the really nice thing about the crackpot request is that they’re usually very easy to decide what to do about it. You can just say, “No, we don’t do that.” Or, “Here’s something you can sign up for over here and they do that but we don’t.” It’s just very easy to identify them and say—you have to be polite about it—but just say, “No, that’s not something we’re going to do.” Or, “It’s on our roadmap to look at but it’s going to be probably at least six months to a year. It’s not a good fit for you especially if you need it that right now.” That’s the one nice thing or the saving grace about these types of requests because they’re easy to dismiss.
Rob: Yeah, that makes sense. The three types are the crackpot, the no-brainers—which you should build—and the in-betweens. Unfortunately, the crackpot ones are maybe, I’m guessing like 10% of feature request. It’s really a small amount but you’re right, having that certainty is a good thing.
Then, the no-brainers which are the ones where it’s almost like, “Why didn’t I think of that?” If it’s not already on your feature list but you realized, “Man, that’s a really good idea!” I remember Josh Earl, he runs Sublime Text Tips. He also works with John Sonmez at Simple Programmer. He reached out to us in some of the early days of Drip and asked if there’s a way to go back and retroactively add a tag to readers based on things they clicked on the past. It was like, “That was a really good idea.” It wasn’t a huge amount of work at that time. To me, that was like a no-brainer one that both me and Derrick it was like, “Why wouldn’t just we build it?” and we did. I think we are the only tool that does it as far as I know. If you don’t have the kind of the trigger logic and our competitors at the time they click, you cannot go around retroactively tag people. I’ve used this feature all the time. It’s one of those things where if I were to have stop using Drip, I would sorely miss because I will frequently want to go back and do it.
The crackpots are good because they’re definite nos. The no-brainers are good because they’re definite yeses. It makes it a lot easier but I would guess that in total, probably less than a third of your feature request will fit into one category or the other.
Mike: Yeah, for Bluetick, I can’t recall something off the top my head where it has been just a completely crackpot feature request. Most of them have been pretty close to what should be built or what is in kind of on the roadmap but I don’t remember the last time I had something came up that was just out of my field and we’re never going to build.
Rob: Yeah, that makes sense. Then, the third type is the in-betweens. They’re the ones that you actually have to make judgments calls. That’s really what, I think, the bulk of today’s episode is about. It’s about deciding which features to build when customers request them. There’s this whole other path like you’re going to build features that no one requested. If you’re not, then you’re really not innovating. You’re not pushing your product past other competitors. I’m not saying you have to do this but I believe—Derrick and I always had a pretty strong vision for Drip and we were definitely building things that no one was requesting. But, if people are requesting features, I have three questions that we used to ask ourselves. I think that, as a listener to the show, it’ll be helpful.
The first question is ask yourself, what is the used case for this feature request? In layman’s terms, what problem are you trying to solve? I always try to take a step back and people would say, “Hey, can you add a checkbox on this page to modify the setting?” And I would sit, think, and say, “Why do you want to do that?” and almost, in probably 80% of the cases, they didn’t actually want a checkbox there. There was some other party app that wasn’t doing what they wanted and they could go on and use a liquid tab for it. Or, we could add a report that would actually help everyone and that would require them to not need that checkbox.
Often times, there was an alternative way to accomplish this already in Drip or the optimal way to achieve it for everyone to get value—like all the customers to get value—was different than what the person has suggested. Because remember, for the most part your customers are not software people. They don’t know UX, they don’t know apps, they don’t know how to think about what to build to keep a product simple. If you just listen to your customers, you can build a monstrosity.
Mike: One thing that I find very helpful is when you get a support request or a feature request like that, ask them what it is they’re trying to do. That way you’re not guessing what it is that they’re trying to do. Your example, the checkbox, you’re trying to read between the lines to see what it is that they want or what they’re trying to achieve. Sometimes, it’s just not even related to anything that you have or it’s very situational specific inside their business. I find it blatantly asking, what is it that you’re trying to achieve or what problem are you trying to solve—that is really helpful.
Rob: The second question that I used to bring up all the time when someone requested and we start evaluating is like, will more than 5% of our user-base use this feature? More than 10%? More than 20%? As a founder, you have a pretty good feel for your customer-base especially in the early days. It’s just asking yourself, will a lot of people get a value out of it?
The number is our return, maybe your market as well. If at least 15% of people use it then it’s good. Or maybe it’s such a marketable feature that even if only 5% of your users use it but it’s an aspirational or a checkbox feature something like split testing in email marketing apps. We found out that a lot of people requested it and when we built it into campaigns, almost no one uses it. It’s like 1% adoption. But, being able to say that we can split test in campaigns and have it on the marketing side and talk about it during sales calls, it is something that’s just important. Honestly, the Visual Email Builder—I think it’s in beta in Drip now, went live after I left—I bet a lot of people won’t use it. But it is a checkbox item that when, especially larger customers, want to sign up and they’re going to sign a one year contract, they want to make sure you have this, this, that, and this because your competitors have it. At that point, sometimes you have to make a choice of like, “Well, only a fifth of the customers are going to use this thing but it’s going to get us a lot more business.”
Mike: I think a lot of times you’ll see people going if they’re evaluating different products, they’ll compare them to each other and try to say, “Okay, what features does this have and which features does that have?” And something they may not even necessarily use, the fact that it exist and they could use it if they wanted to, is a good selling point. But I have mixed feelings on that just because sometimes people will use it just to make a decision versus wanting to use it.
This is kind of where my hatred of this process comes in but I will see people deciding to implement those features. The vendors will implement that feature and the feature itself just completely sucks but the only reason they built it was so that they can create like that checkbox on their website to say, “Hey, we have this feature.”
Rob: That used to kill me, actually. We had a few competitors build really crappy versions of split testing that were actually harmful. They were not statistically significant. I was face palming because it’s like what they say, they can say they a have split testing but it was a [shit 00:14:27] implementation of it. It’s actually going to be a detrimental to their customers. I could never bring myself to do that in a product like to build something crappy. As a result, stuff for us probably took longer to build than some competitors.
There’s one other trick we used a few times as well and it was in the early days only. It was a larger customer who’s revenue would move the needle. We did build a couple of features that we basically hid in the UI except for a handful of people. Literally, like less than 1% of Drip customers would be able to see this feature and it was a feature that really we didn’t want to build. We didn’t believed it should be in a product but the revenue at that time was just something we couldn’t pass up. We didn’t do it a lot but one of the bigger reasons we didn’t want the feature in it is because it would add more checkboxes and dropdowns—just negatively impact the UX, in essence. Most people weren’t going to use it anyways and so that was a choice to just kind of—we had a feature flag and we don’t want to go into a few accounts. There’s still are a few features in Drip to this day that really only appear for a small subset of customers.
Mike: I think I have access to a couple of these features.
Rob: I bet you do.
Mike: That’s interesting. I did the same thing with Bluetick where there are certain features that you can’t even use inside the app but I have like a backend toolbox application. It allows me to either toggle them on or off or do different things inside of somebody’s account where it achieves what they want but is not something that they could actually do inside the app.
Sometimes, I’ll use that to either test it out in kind of production. For example, one of them was a Bcc field where people like, “When I send emails out, I want to Bcc this other email address.” For a long time that was, you could do it inside the app but there is no way in the UI for the user to see, that it was actually happening. They had to contact me through support and I would actually put it into a field in the database that would make it work. Now, it’s actually ruled out and everybody can use it. I use this kind of mechanism for sort of testing it out with live data to some extent.
Rob: Yeah, that’s really good way to do it. We did that. With any feature roll out that we thought was a risk at all, we would totally feature it temporarily and then slowly enable it for more and more people. Then, in this case, where I’m talking about actually building a feature and never rolling it out to everyone, that was something again, we did that in the early days when we needed to when we’re being scrappy.
I meant to say this at the beginning of the episode but this is actually, this outline is from an unpublished blog post of mine. If I ever get around to finishing that blog post, you may see this on my blog as well. I have additional examples. I can obviously go into more, more things in a 2000-word blog post than we can cover in 25 minutes here. I’ve also considered doing a talk about this. Derrick Reimer, my Drip co-founder did an attendee talk a couple of years ago in Drip on this topic. We have similar takes because we worked together on it. But I feel like we can definitely, potentially be a full 30 or 40-minute talk.
With that in mind, the third question that we used to ask ourselves a lot when we get feature request is, “Does this fit with my vision of what the product should be?” Going back to an earlier example, since Drip was a competitor especially in the early days, it was compared a lot to Infusionsoft. We would get a lot of request to add shopping cart and landing pages and affiliate management—really, things that we didn’t want to build on the product because we didn’t view Drip as, we want to integrate with best in class solutions rather than try to be everything to everyone. We felt like the bloated software just wasn’t, we couldn’t see an example of it in a space where adding all these features has helped anyone. It always makes it a crappy experience.
The fact is when you’re bootstrapping, there’s an opportunity cost. Every hour you spend building features, that’s an hour that you don’t spend becoming the best at what you’re doing. That was where we decided to focus on integration. What’s nice is the integrations were platforms that people were already using like Unbounce, and Shopify, and Stripe, and Gumroad, Leadpages, and PayPal and on and on. We had 35 integrations within probably the first year of being live. It was a nice lift for us in terms of actually getting new customers because all those integrations are—they’re promotional avenues if you can get folks to promote you. But they just make the product more sticky.
This whole ties in the question coming back to it is, “Does this fit my vision of what the product should be?” We always had a pretty strong vision. We want to be a best in class email marketing or marketing automation tool. Therefore, a lot of the request that came through is like, “Huh, yeah, that doesn’t fit with where we want to take the product. We’re just going to have to say no.”
Mike: The part about this, knowing what vision you have for the product is one of those things where it’s a little bit more abstract. You kind of have to step back from the product itself, away from the features and away from the dirty details of how things are implemented and say, “What is the type of person that you want to use this? What is it that you want to empower them to be able to achieve?” Because otherwise, you may have this vision for your product but people come in with feature request and I say, “Oh, this is why I want to do x.”
If it’s one of those in-between things, it could change or alter that vision a little bit and shift it in one direction or another. Sometimes those shifts in direction will isolate or exclude certain types of people as well. It’s something to be a little careful of because your vision can change over time based on the feedback and the feature request you’re getting in. You can easily end up going down the road where you’re tracking the wrong types of people—you’re tracking more of them—but it’s the wrong type of people. They’re having a bad experience because they’re not using your tool correctly or in the way you envisioned and you’re not catering to them anyways. It’s a very slippery slope you can end up on if you’re not very careful about how you’re making those decisions.
Rob: Yeah, that’s a good point. Your vision will likely change over time. In the early days of Drip, my vision was completely different than what Drip became. That was okay but you can hear it was a painful process to make that decision and kind of switch the vision. You can hear it and if you go to startupstoriespodcast.com, there is a 90-minute audio Derrick and I recorder over, I think about nine months. I edited 10 hours of audio down to 90 minutes and you can hear the agonies we’re going through of like, “What should we be building? What actually are we building?” early on. It was one thing then it became essentially an ESP with automation. Decision process is what makes startups hard. We were just trying to find product market fit and therefore our vision had to follow something that was valuable to people.
In the early days, it wasn’t valuable enough. People were willing to pay us but they were not willing to pay us the $49 a month that I want to beat the minimum price point. We had to follow that. Then, once you get past that though, once you start scaling up and growing and you have product market fit, I think it becomes so, so much easier to know what you have, what you’re building, what you should build. It really does get easier. It’s that first year or 18 months that’s really hard to figure out when you don’t have a large customer base and you don’t just have that gut feeling of what you should build based on all your experience.
Mike: Yeah, I totally agree with that. If you’re in a position where you don’t have, I’ll say, a critical mass of users yet, then take a lot of this advice with a grain of salt. Definitely take the feature request with the grain of salt because the decisions that you make now are going to change things in the future and draw or repel certain types of users. That will influence, ultimately, how the product is received in the market and what other features you end up developing.
Rob: I think the thing to remember is you’re always going to get way, way more feature request than you can possibly build. Even when you have 10 users, people are going to be requesting things. As a bootstrapper, time is your most valuable resource. You’re just never going to be able to build anything you want. If you could build everything you want, I don’t know. I questioned if the product would get bloated too fast. It might actually be a benefit that you are time-constrained because I think in the early days, you’re going to want to build anything everyone requests. If you’re able to do that, I think you can potentially build a really crappy, bloated, product.
Mike: Yeah. Definitely the danger in building this many feature is you like is the fact that it makes the interface much more difficult to work with. You have to do a lot more design work with where different things are in the app. A lot of times, as you add features, you have to restructure or re-architect either the different parts of the application itself or the UX which forces underlying changes as well. You’re basically bolting things on after the fact. I think that’s why a lot of people, specially newer developers, tend to say, “Oh, I’d like to rewrite this app from scratch because now we know what we want to build based on the features that we have.” But it’s really tough to do that unless you’re in a situation where you can completely rebuild the app.
I think that David, DHH from Basecamp has talked about this a couple of times where they’ve rebuilt Basecamp from the ground up. As much as I disagree with that decision, I would disagree with it for me and in our situation that kind of makes sense because they can essentially abandon the previous version and say, “Everyone who’s using this, you’re still going to get to use it but anyone new is going to sign up and they’re going to use this newer version and they get to work on new stuff.” But not everyone is in the position where you can basically halt all development on your current app and still be making millions of dollars a year from your current customer bases.
Rob: Yeah. That’s rewriting app—that would be a whole nother episode. I think Basecamp is such an anomaly and such an edge case that very, very few companies will achieve using them as an example is tough just for that reason, because they got in so early and grew so fast. But you’re right. Rewriting an app. I’ve seen several startups do that and I always cringe pretty hard when they talk about doing that because it’s not going to solve all your problems the way you think it will. It’s going to keep you just frozen for six months while you try to rebuild everything.
Mike: Yeah. I think the fallacy there is that you understand how the different pieces fit together so you can reengineer all the stuff to solve your current problems but even after you’ve done that, let’s say, that you can do that in a hour and everything’s completely restructured. Yes, it only cost you an hour but you’re still going to end up getting more feature request that you’re still going to have to bolt on to the application afterwards. At that point, you’re retroactively architecting new features into the architecture and how the UI and UX is all laid out. It just will not solve every single problem that you have. There’s certain problems you’re just going to have to live with.
I think that about wraps it up for today. If you have a question for us, you can call in into our voice mail 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, it’s by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups For the Rest of Us and startupsfortherestofus.com for the full transcript in each episode. Thanks for listening. We’ll see you next time.
Welcome to Startups For the Rest of Us. The podcast that helps developers, designers, and entrepreneurs be awesome in building, launching, and growing software products whether you built your product or just thinking about it. I’m Rob.
Mike: And I’m Mike.
Rob: We’re here to share our experiences to help people with the same mistakes we made. To where this week sir?
Mike: Well, I submitted the Bluetick Zapier integration to Zapier, to see about promoting it through their public availability process. I’ve already heard back from them. I’ve got a list of things they want to see changed to conform to the standards that they kind of set for everybody to maintain consistency between Zap. I got to go back, and look at those, and make some changes and then publish it but things did not seem to be too terrible.
Rob: Nice, that’s super cool man. Once that goes live, it’s nice to be able to refer customers to Zapier when they’re trying to be something in your app that you haven’t built yet—when you don’t have an integration. That was always the useful piece for us.
Mike: Yeah. Well, the thing is like the Zapier integration is already there, it’s just invite only and there’s a link inside the app where they can click on that link and go over there. The difference is it will be public so that when people are searching inside Zapier to see where there is a Bluetick Zap, they’ll be able to see it but I’ll have them to login in Bluetick first. At that point, they can add it into their account but I guess you can’t ready do anything without an API key anyways.
Rob: I remembered when Zapier promoted HitTail early on we got a bump and then Drip, I remember it was—I think it was more or less, but it definitely in the early days when you’re really scraping and clawing for every customer. I think that you get included in the email newsletter, tweeted out, I think, and every bit helps at that point. Even if you only get a couple new customers from someone hearing about it, it can move the needle for you in the early days.
Mike: Yes. I’m hoping to see that at least through the initial process in the next couple of weeks or so. I don’t know how long it has to be in their beta for before it ends up being live. I think that they said that—when I was looking through the specs—they said, “You should have at least one person using each Zap and you need to have at least 20 active Zaps,” or something like that. They’ve revised their stats page to see if you can actually see more about who’s using it, how many people are using the different Zaps that you’ve published or made available. I’m up to like 400 active or something like that, and only need 20.
Rob: Oh, yeah. That’s a lot more than we went live with it. That’s cool. segment.com will be another one. You’ll probably want to do it at some point—integrate with them. That’s another big hub to get not only the promotion but it’s just nice because people are going to want to create reports or do things with the data that you’re just not going to have the time to build and referring about to Segment, it can help there.
Mike: Yeah. Ultimately, I’ll look into that one as well. The other thing I’m in the middle of right now is kind of specking out with the public APIs going to look like. Everything in there is all used internally inside the app and then I have a specific endpoint that’s used solely for Zapier and then next step is to really kind of take that and say, “Okay, when are we going to make it public?” because there’s a couple of customers who have wanted to use a public API but I told them to kind of hold off and just use Zapier. I had a call this morning with somebody about what the specifics things they needed from a public API from us are. There’s at least one other customer that I want to talk to who I know they do a lot of extensive development work and are using Bluetick as the backend CRM for their entire company. They got several mailboxes attached and they want to be able to use that functionality inside there. I definitely want to have a conversation with them first before I start making anything publicly available.
Rob: That makes sense. For me, I am in California when this episode airs. We’re heading there for about two weeks. We’re going to see different groups of family in different areas and my sons are going to a cello and violin camp—Suzuki String Camp in San Francisco. It should be fun. It’s where I’m from. It’s nice to get back there once or twice a year to kind of see the family and all that.
Mike: Cool. Hopefully you won’t be selling the company while you’re out there.
Rob: I know. That’s the old story right? That I was signing the final docs at the cello camp a couple years ago.
Mike: Getting dirty looks.
Rob: Indeed. Dirty looks from the instructor.
I titled this episode Why You Shouldn’t Listen to Your Customers and What You Should Do Instead. Realistically, it’s about deciding which feature request to build and which not to—not even feature request, just deciding what to build in general. There’s always the popular meme of like launch soon and then your customers will tell you what to build.
I’ve seen struggles with that. Number one, often times your customers don’t know really what they’re trying to do or they’ll tell you to build things that you shouldn’t build but you should do it a different way. Or they’re just going to tell you to build your competitor. They’re going to say, “Hey, I’ve used Infusionsoft and it has these features and you don’t have them. Can you just build this, this, that, and this?” We have these all the time in the early days.
Remember, early Drip user wanted a mobile app. He wanted kind of like an iOS and an android app. He wanted these very specific reports that made sense in Mailchimp but wouldn’t have made sense for Drip to have. He’s not a software person, his idea was just to have this be Mailchimp but with a cleaner interface and that wasn’t what we wanted to build.
It’s really easy when you’re getting multiple feature request per day. I left Drip a couple of months ago, I think we get 150-200 feature requests per month. It’s a substantial line and at a certain point you have to figure out how you’re going to evaluate what to build and what not to build.
I see these like there’s three types of feature request. The first type is—I humorously named this, the crackpots—but it’s kind of odd ball request that you know that there’s no chance you’re going to build, that kind of come out of left field. Some examples of those are, people requiring you or asking you for feature that would require you to build an entirely new product. For example, “Why can’t I use your email service provider to publish blog posts on my WordPress site, or to record my podcast and publish them, or to do all of my social media marketing?” Some people would ask us to, “You do email, I want you to do Facebook, Instagram, Twitter, and do these integrations.” It’s not that we would never build those but people were asking these when we didn’t even have very basic features. In the first year or two, there were folks who were asking for these. It’s just like, “Yeah, I know. There’s no chance we’re going to build that.”
The other one is like asking you to clone your competitors. Like, “It’d be great if you could add a shopping cart, and CRM, and lead scoring.” Basically be Infusionsoft. I was like, “Nope, that’s not our goal.” Or finally, features that are the opposite of your product strengths. I remember someone saying like, “I like that your UI is so streamlined but can you add all these options to fit my rare and unique used case?” They didn’t used those phrases but that’s the kind of stuff that could come across.
Crackpot may not be the best name for them but they’re really the ones that are obvious to you that you shouldn’t build them.
Mike: I think the really nice thing about the crackpot request is that they’re usually very easy to decide what to do about it. You can just say, “No, we don’t do that.” Or, “Here’s something you can sign up for over here and they do that but we don’t.” It’s just very easy to identify them and say—you have to be polite about it—but just say, “No, that’s not something we’re going to do.” Or, “It’s on our roadmap to look at but it’s going to be probably at least six months to a year. It’s not a good fit for you especially if you need it that right now.” That’s the one nice thing or the saving grace about these types of requests because they’re easy to dismiss.
Rob: Yeah, that makes sense. The three types are the crackpot, the no-brainers—which you should build—and the in-betweens. Unfortunately, the crackpot ones are maybe, I’m guessing like 10% of feature request. It’s really a small amount but you’re right, having that certainty is a good thing.
Then, the no-brainers which are the ones where it’s almost like, “Why didn’t I think of that?” If it’s not already on your feature list but you realized, “Man, that’s a really good idea!” I remember Josh Earl, he runs Sublime Text Tips. He also works with John Sonmez at Simple Programmer. He reached out to us in some of the early days of Drip and asked if there’s a way to go back and retroactively add a tag to readers based on things they clicked on the past. It was like, “That was a really good idea.” It wasn’t a huge amount of work at that time. To me, that was like a no-brainer one that both me and Derrick it was like, “Why wouldn’t just we build it?” and we did. I think we are the only tool that does it as far as I know. If you don’t have the kind of the trigger logic and our competitors at the time they click, you cannot go around retroactively tag people. I’ve used this feature all the time. It’s one of those things where if I were to have stop using Drip, I would sorely miss because I will frequently want to go back and do it.
The crackpots are good because they’re definite nos. The no-brainers are good because they’re definite yeses. It makes it a lot easier but I would guess that in total, probably less than a third of your feature request will fit into one category or the other.
Mike: Yeah, for Bluetick, I can’t recall something off the top my head where it has been just a completely crackpot feature request. Most of them have been pretty close to what should be built or what is in kind of on the roadmap but I don’t remember the last time I had something came up that was just out of my field and we’re never going to build.
Rob: Yeah, that makes sense. Then, the third type is the in-betweens. They’re the ones that you actually have to make judgments calls. That’s really what, I think, the bulk of today’s episode is about. It’s about deciding which features to build when customers request them. There’s this whole other path like you’re going to build features that no one requested. If you’re not, then you’re really not innovating. You’re not pushing your product past other competitors. I’m not saying you have to do this but I believe—Derrick and I always had a pretty strong vision for Drip and we were definitely building things that no one was requesting. But, if people are requesting features, I have three questions that we used to ask ourselves. I think that, as a listener to the show, it’ll be helpful.
The first question is ask yourself, what is the used case for this feature request? In layman’s terms, what problem are you trying to solve? I always try to take a step back and people would say, “Hey, can you add a checkbox on this page to modify the setting?” And I would sit, think, and say, “Why do you want to do that?” and almost, in probably 80% of the cases, they didn’t actually want a checkbox there. There was some other party app that wasn’t doing what they wanted and they could go on and use a liquid tab for it. Or, we could add a report that would actually help everyone and that would require them to not need that checkbox.
Often times, there was an alternative way to accomplish this already in Drip or the optimal way to achieve it for everyone to get value—like all the customers to get value—was different than what the person has suggested. Because remember, for the most part your customers are not software people. They don’t know UX, they don’t know apps, they don’t know how to think about what to build to keep a product simple. If you just listen to your customers, you can build a monstrosity.
Mike: One thing that I find very helpful is when you get a support request or a feature request like that, ask them what it is they’re trying to do. That way you’re not guessing what it is that they’re trying to do. Your example, the checkbox, you’re trying to read between the lines to see what it is that they want or what they’re trying to achieve. Sometimes, it’s just not even related to anything that you have or it’s very situational specific inside their business. I find it blatantly asking, what is it that you’re trying to achieve or what problem are you trying to solve—that is really helpful.
Rob: The second question that I used to bring up all the time when someone requested and we start evaluating is like, will more than 5% of our user-base use this feature? More than 10%? More than 20%? As a founder, you have a pretty good feel for your customer-base especially in the early days. It’s just asking yourself, will a lot of people get a value out of it?
The number is our return, maybe your market as well. If at least 15% of people use it then it’s good. Or maybe it’s such a marketable feature that even if only 5% of your users use it but it’s an aspirational or a checkbox feature something like split testing in email marketing apps. We found out that a lot of people requested it and when we built it into campaigns, almost no one uses it. It’s like 1% adoption. But, being able to say that we can split test in campaigns and have it on the marketing side and talk about it during sales calls, it is something that’s just important. Honestly, the Visual Email Builder—I think it’s in beta in Drip now, went live after I left—I bet a lot of people won’t use it. But it is a checkbox item that when, especially larger customers, want to sign up and they’re going to sign a one year contract, they want to make sure you have this, this, that, and this because your competitors have it. At that point, sometimes you have to make a choice of like, “Well, only a fifth of the customers are going to use this thing but it’s going to get us a lot more business.”
Mike: I think a lot of times you’ll see people going if they’re evaluating different products, they’ll compare them to each other and try to say, “Okay, what features does this have and which features does that have?” And something they may not even necessarily use, the fact that it exist and they could use it if they wanted to, is a good selling point. But I have mixed feelings on that just because sometimes people will use it just to make a decision versus wanting to use it.
This is kind of where my hatred of this process comes in but I will see people deciding to implement those features. The vendors will implement that feature and the feature itself just completely sucks but the only reason they built it was so that they can create like that checkbox on their website to say, “Hey, we have this feature.”
Rob: That used to kill me, actually. We had a few competitors build really crappy versions of split testing that were actually harmful. They were not statistically significant. I was face palming because it’s like what they say, they can say they a have split testing but it was a [shit 00:14:27] implementation of it. It’s actually going to be a detrimental to their customers. I could never bring myself to do that in a product like to build something crappy. As a result, stuff for us probably took longer to build than some competitors.
There’s one other trick we used a few times as well and it was in the early days only. It was a larger customer who’s revenue would move the needle. We did build a couple of features that we basically hid in the UI except for a handful of people. Literally, like less than 1% of Drip customers would be able to see this feature and it was a feature that really we didn’t want to build. We didn’t believed it should be in a product but the revenue at that time was just something we couldn’t pass up. We didn’t do it a lot but one of the bigger reasons we didn’t want the feature in it is because it would add more checkboxes and dropdowns—just negatively impact the UX, in essence. Most people weren’t going to use it anyways and so that was a choice to just kind of—we had a feature flag and we don’t want to go into a few accounts. There’s still are a few features in Drip to this day that really only appear for a small subset of customers.
Mike: I think I have access to a couple of these features.
Rob: I bet you do.
Mike: That’s interesting. I did the same thing with Bluetick where there are certain features that you can’t even use inside the app but I have like a backend toolbox application. It allows me to either toggle them on or off or do different things inside of somebody’s account where it achieves what they want but is not something that they could actually do inside the app.
Sometimes, I’ll use that to either test it out in kind of production. For example, one of them was a Bcc field where people like, “When I send emails out, I want to Bcc this other email address.” For a long time that was, you could do it inside the app but there is no way in the UI for the user to see, that it was actually happening. They had to contact me through support and I would actually put it into a field in the database that would make it work. Now, it’s actually ruled out and everybody can use it. I use this kind of mechanism for sort of testing it out with live data to some extent.
Rob: Yeah, that’s really good way to do it. We did that. With any feature roll out that we thought was a risk at all, we would totally feature it temporarily and then slowly enable it for more and more people. Then, in this case, where I’m talking about actually building a feature and never rolling it out to everyone, that was something again, we did that in the early days when we needed to when we’re being scrappy.
I meant to say this at the beginning of the episode but this is actually, this outline is from an unpublished blog post of mine. If I ever get around to finishing that blog post, you may see this on my blog as well. I have additional examples. I can obviously go into more, more things in a 2000-word blog post than we can cover in 25 minutes here. I’ve also considered doing a talk about this. Derrick Reimer, my Drip co-founder did an attendee talk a couple of years ago in Drip on this topic. We have similar takes because we worked together on it. But I feel like we can definitely, potentially be a full 30 or 40-minute talk.
With that in mind, the third question that we used to ask ourselves a lot when we get feature request is, “Does this fit with my vision of what the product should be?” Going back to an earlier example, since Drip was a competitor especially in the early days, it was compared a lot to Infusionsoft. We would get a lot of request to add shopping cart and landing pages and affiliate management—really, things that we didn’t want to build on the product because we didn’t view Drip as, we want to integrate with best in class solutions rather than try to be everything to everyone. We felt like the bloated software just wasn’t, we couldn’t see an example of it in a space where adding all these features has helped anyone. It always makes it a crappy experience.
The fact is when you’re bootstrapping, there’s an opportunity cost. Every hour you spend building features, that’s an hour that you don’t spend becoming the best at what you’re doing. That was where we decided to focus on integration. What’s nice is the integrations were platforms that people were already using like Unbounce, and Shopify, and Stripe, and Gumroad, Leadpages, and PayPal and on and on. We had 35 integrations within probably the first year of being live. It was a nice lift for us in terms of actually getting new customers because all those integrations are—they’re promotional avenues if you can get folks to promote you. But they just make the product more sticky.
This whole ties in the question coming back to it is, “Does this fit my vision of what the product should be?” We always had a pretty strong vision. We want to be a best in class email marketing or marketing automation tool. Therefore, a lot of the request that came through is like, “Huh, yeah, that doesn’t fit with where we want to take the product. We’re just going to have to say no.”
Mike: The part about this, knowing what vision you have for the product is one of those things where it’s a little bit more abstract. You kind of have to step back from the product itself, away from the features and away from the dirty details of how things are implemented and say, “What is the type of person that you want to use this? What is it that you want to empower them to be able to achieve?” Because otherwise, you may have this vision for your product but people come in with feature request and I say, “Oh, this is why I want to do x.”
If it’s one of those in-between things, it could change or alter that vision a little bit and shift it in one direction or another. Sometimes those shifts in direction will isolate or exclude certain types of people as well. It’s something to be a little careful of because your vision can change over time based on the feedback and the feature request you’re getting in. You can easily end up going down the road where you’re tracking the wrong types of people—you’re tracking more of them—but it’s the wrong type of people. They’re having a bad experience because they’re not using your tool correctly or in the way you envisioned and you’re not catering to them anyways. It’s a very slippery slope you can end up on if you’re not very careful about how you’re making those decisions.
Rob: Yeah, that’s a good point. Your vision will likely change over time. In the early days of Drip, my vision was completely different than what Drip became. That was okay but you can hear it was a painful process to make that decision and kind of switch the vision. You can hear it and if you go to startupstoriespodcast.com, there is a 90-minute audio Derrick and I recorder over, I think about nine months. I edited 10 hours of audio down to 90 minutes and you can hear the agonies we’re going through of like, “What should we be building? What actually are we building?” early on. It was one thing then it became essentially an ESP with automation. Decision process is what makes startups hard. We were just trying to find product market fit and therefore our vision had to follow something that was valuable to people.
In the early days, it wasn’t valuable enough. People were willing to pay us but they were not willing to pay us the $49 a month that I want to beat the minimum price point. We had to follow that. Then, once you get past that though, once you start scaling up and growing and you have product market fit, I think it becomes so, so much easier to know what you have, what you’re building, what you should build. It really does get easier. It’s that first year or 18 months that’s really hard to figure out when you don’t have a large customer base and you don’t just have that gut feeling of what you should build based on all your experience.
Mike: Yeah, I totally agree with that. If you’re in a position where you don’t have, I’ll say, a critical mass of users yet, then take a lot of this advice with a grain of salt. Definitely take the feature request with the grain of salt because the decisions that you make now are going to change things in the future and draw or repel certain types of users. That will influence, ultimately, how the product is received in the market and what other features you end up developing.
Rob: I think the thing to remember is you’re always going to get way, way more feature request than you can possibly build. Even when you have 10 users, people are going to be requesting things. As a bootstrapper, time is your most valuable resource. You’re just never going to be able to build anything you want. If you could build everything you want, I don’t know. I questioned if the product would get bloated too fast. It might actually be a benefit that you are time-constrained because I think in the early days, you’re going to want to build anything everyone requests. If you’re able to do that, I think you can potentially build a really crappy, bloated, product.
Mike: Yeah. Definitely the danger in building this many feature is you like is the fact that it makes the interface much more difficult to work with. You have to do a lot more design work with where different things are in the app. A lot of times, as you add features, you have to restructure or re-architect either the different parts of the application itself or the UX which forces underlying changes as well. You’re basically bolting things on after the fact. I think that’s why a lot of people, specially newer developers, tend to say, “Oh, I’d like to rewrite this app from scratch because now we know what we want to build based on the features that we have.” But it’s really tough to do that unless you’re in a situation where you can completely rebuild the app.
I think that David, DHH from Basecamp has talked about this a couple of times where they’ve rebuilt Basecamp from the ground up. As much as I disagree with that decision, I would disagree with it for me and in our situation that kind of makes sense because they can essentially abandon the previous version and say, “Everyone who’s using this, you’re still going to get to use it but anyone new is going to sign up and they’re going to use this newer version and they get to work on new stuff.” But not everyone is in the position where you can basically halt all development on your current app and still be making millions of dollars a year from your current customer bases.
Rob: Yeah. That’s rewriting app—that would be a whole nother episode. I think Basecamp is such an anomaly and such an edge case that very, very few companies will achieve using them as an example is tough just for that reason, because they got in so early and grew so fast. But you’re right. Rewriting an app. I’ve seen several startups do that and I always cringe pretty hard when they talk about doing that because it’s not going to solve all your problems the way you think it will. It’s going to keep you just frozen for six months while you try to rebuild everything.
Mike: Yeah. I think the fallacy there is that you understand how the different pieces fit together so you can reengineer all the stuff to solve your current problems but even after you’ve done that, let’s say, that you can do that in a hour and everything’s completely restructured. Yes, it only cost you an hour but you’re still going to end up getting more feature request that you’re still going to have to bolt on to the application afterwards. At that point, you’re retroactively architecting new features into the architecture and how the UI and UX is all laid out. It just will not solve every single problem that you have. There’s certain problems you’re just going to have to live with.
I think that about wraps it up for today. If you have a question for us, you can call in into our voice mail 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, it’s by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups For the Rest of Us and startupsfortherestofus.com for the full transcript in each episode. Thanks for listening. We’ll see you next time.
Episode 400 | The Importance of Consistency
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about the importance of consistency. They reminisce about how the podcast has evolved over the years and the benefits of putting an episode out week after week.
Items mentioned in this episode:
- FounderCafe
- BoardGame Tables
- MicroConf
- Inc.com Article
- Uexpress.com Article
- differenceconsulting.com Article
Rob: In this episode of Startups for the Rest of us, Mike and I do, like we do every week, completely make it up as we go along in this Episode 400 so it’s quite a milestone. Today, we’re going to be talking about the importance of consistency. This is Startups for the Rest of Us, Episode 400.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at building, launching, and in growing software products, whether you’ve built your first product; you’re just thinking about it.
Rob: I’m Rob.
Mike: And I’m Mike.
Rob: And we’re here to share our experience to help you avoid the same mistakes we made. 400 Episodes, Sir. Congratulations.
Mike: Thank you. I did it all by myself.
Rob: I know you did. How does it feel?
Mike: I don’t know. I feel very run down today but I don’t think that it has anything to do with Episode 400. I think it has to do with the fact that yesterday was the Fourth of July here so we had a bunch of people over and my kids are away for the week. They’re at Sleepaway Camp. We had a bunch of people over and we’re just like grilling and swimming in the pool, which was 92 degrees or something like that, and we haven’t even kept it covered for several days; it’s just hot as heck.
Rob: Yeah, and you stood out, man. You were hanging out. You drank too much so then you’re hung over and tired today.
Mike: I’m just tired. I’m not hung over. That’s the funny part. I don’t know if it’s funny, but I’m not hung over; I’m just tired. I didn’t sleep very well, I don’t think.
Rob: Yeah, and I feel a little bit the same way you do. We had friends over as well. I’m also kind of tired from the heat and just from whatever else. I think the 400 Episode thing makes me feel, if anything, old. It’s like we’ve been doing this for eight years, I believe. Is that right? Wasn’t it 2010?
Mike: Yes, 2010.
Rob: It was somewhere between February and April of 2010. I could look at the archived pages post, but it’s a long time to do this. We’ve had millions and millions of downloads. I was just looking at the statistics, millions of downloads, tens of thousands of listeners per episode. We’ve built something. We’ve built something pretty special, I think, that resonates with people. We’ll talk more about our favorite episodes and we’d have some listeners who wrote in, and I thought that was really nice. I think it’s a testament that we basically were able to show MicroConf out of the podcast. I don’t know that we could have grown it to what it is without this show. It’s like the entire conference. These days, MicroConf is its own name but, back in the day, we really sold tickets. It was kind of like my email list, your email list and people listening to Startups for the Rest of Us.
Mike: Yeah, and I think that just having that podcast episode that dropped every single Tuesday almost without fail makes people feel that they’re part of something. Then, when you come to MicroConf, you’re meeting the same types of people who were listening to the podcast. As you said, things have grown and people who come to MicroConf don’t necessarily always listen to the podcast. It’s taken a life of its own but, in the early days like that, that was really what drove that audience, I’ll say.
Rob: Yeah, for sure. How about you? What else is going on this week?
Mike: I have a meet-up that I put together this evening. I’m meeting a bunch of people who are either FounderCafe members or attended MicroConf or both this evening over in Worcester. That should be fun. We’re going to head over to British Beer Works or something like that and meet up around six o’clock and just have a couple of drinks, have dinner and just talk business.
Rob: That’s super cool. Did you just initiate that out of nowhere?
Mike: It wasn’t completely out of nowhere. When we set up the slack group for MicroConf, there were a bunch of people in there who were like, “Hey, who’s in the Greater Boston area?” and a few different people chimed in. I think that there was even a private channel that was created for people who are in the Greater Boston area, and then a couple of people mentioned to get in together. What I did was I just went through and looked to see who had come to MicroConf who was in the Boston area and I just emailed them. I have a running list of people that I know who live in the area and I just went through them, emailed them all and said, “Hey, here’s the time, date and place. Who wants to get together?” About half a dozen people or so chimed in and said, “Yeah, absolutely. Let’s go.”
Rob: That’s super cool. That’ll be a nice-sized group, too. I like that size.
Mike: Yeah. We’ll see how it goes.
Rob: Cool. Once you’ve done it, I’m interested to hear how it was on the show.
Mike: Yeah. That’s something we’ve actually talked a little bit about in the past in the background between you and me, just figuring out if that’s something that we wanted to facilitate in different places. I don’t know if there’s a good technical way to manage that, to be honest.
Rob: Yeah, the TropiColombia guys due their juntos, but they do have local meet-ups. It’s definitely possible but it’s always been the question of, “Do we have the bandwidth?” or, “If we don’t do it and we hire someone to do it, how do we make it pay for itself?” basically, right?
Mike: Right.
Rob: We’ve talked about not wanting to run an events business, like we don’t want to be in the events business and yet we throw three events a year already with the three MicroConfs. I think if we did the juntos or something like that, local meet-ups, basically, it would definitely span out itself. I think if we had the aspiration, we could totally pull it off. It’s just not you nor I have ever really wanted to gear up and not work on our software products in order to do that.
Mike: Yeah, I think that’s the biggest issue, is just having the bandwidth to be able to do it and, as you said, without charging for it and hiring somebody to help manage and facilitate all that. It’d be really hard for us to pull it off.
Rob: Yeah. Last weekend, I went to a three-day mastermind retreat, is what I’ call it, and it was the Rhodium Community. You know Rhodium Weekend? Have you heard of it? Chris Yates runs Rhodium, and I have a lot of respect much like I often tell people that MicroConf is the younger sibling of BoS. It’s less expensive, it’s more focused in slightly earlier-stage companies, very few have funding and BoS is a different story. It’s still very much about building real software companies and not with venture-back stuff even though some of them do take venture funding, but I have a lot of respect for BoS.
I also have a lot of respect for Rhodium Weekend. It’s a 100-person event held in Vegas every year. It’s run by Chris Yates, and it is more about buying and selling websites. There’s a lot of talk about internet marketing, but what I found is, like MicroConf, it’s very ethical. Since Chris has built the audience, he’s been very picky about who he lets in and so it’s not the sleazy internet marketing. You can go to a lot of really shitty internet marketing conferences. People are pitching from the stage and that’s not what Rhodium is.
Every year, there’s a Rhodium conference and then he has this mastermind that he runs that Sherrie [ph], my wife is a part of, and it’s a monthly call with about 14 people, and they do hot-seat format. They do all kinds of stuff. Once a year, that small group of 14, goes to a house and stays there for three days and they do a hot-seat format. Sherrie [ph] was unable to make it and there was a seed open so they invited me because I know Chris and I actually knew a few people in the group as well.
For me, I had to really think about whether or not I wanted to do it because of that format. I know you’ve done this with Big Snow Tiny Conf. I’ve never done that. I’ve done really small things with four or five people and then I obviously do MicroConf, but that in-between felt very uncomfortable for me going into it, especially knowing only three people there in advance. I really debated whether to go or not and, in retrospect, it was awesome, like it was really, really good as I kind of knew in the back of mind it would be.
I felt a little introverted and everybody else knows each other really well because they’re on these calls and they hang out, but it was a big deal. It was game-changing for me in terms of my thought process of, “I think I want to do that again.” It makes me really want to do one of the Big Snow Tiny Confsnow that I have more scheduling flexibility. I don’t ski but I’ll drink hot chocolate and read comic books or something while you guys ski or snowboard. I think I want to do it.
The cool thing about it is it really opened my eyes to the value that you can get from a group of that size, and that was my doubt. There were certainly some struggles with it, too. With 15 people, I think in my opinion, it’s just a little bit too big. I would love for it to be 8 to 10, and that would be a perfect size. With all of that said, I can imagine that it might be even more valuable to have everyone having the same type of business or at least similar because they were all over the board.
There were people who literally just build and buy content websites that they monetize with affiliate links and AdSense. There were e-commerce. There were e-commerce drop shippers. There were people who manufactured their own products. There were two or three SaaS. There were some people who just do a lot of SEO and they just build sites and sell them. There’s a real wide variation of who’s done what, and I think that was super helpful but I also imagined, if everyone was SaaS, that there could potentially be more value to it.
Mike: Yeah, and it goes both ways, though, because if you have people who are doing things in different types of businesses, then you get a different perspective than you would if everybody is doing the same type of thing. If everyone was doing SaaS, you don’t get the perspective of, “We’re e-commerce and this is how we do affiliates.” They may view them very differently and you can get really good, solid takeaways from those that you can put together and put forth on your business that are going to work for you. You would not get that if everyone is always talking to the same types of people, I’ll say.
Rob: Yeah, I totally agree. It’s a good point and that absolutely was true. I was surprised how much I had to offer someone doing drop shipping commerce. It was more than I thought. Some hot-seats would start like, “Boy, I’m not sure I have anything to add here,” and then I would have insights. It’s like, “Yeah, that was similar to my experience with Drip.” There’s enough overlap with these businesses–maybe at 60% similarity–because there’s always going to be marketing, and there’s SEO, and there’s affiliate programs or whatever that’s similar. I don’t know. Maybe having everyone working on the same type of thing would take away from that, the variety of thought or whatever.
Mike: Yeah, I definitely think that that’s probably the case. It depends on, specifically, what you’re looking for. You could easily have a group that is all the same types of people than a different group that is very different, and it depends what you’re trying to get out of the group. I think that that’s more the issue than anything else because at Big Snow Tiny Conf, Chad DeShon runs boardgametables.com and he’s got some fantastic ideas but because he’s B2C and he’s selling physical products, he’s not the type of person that I would probably end up in a group with but he’s got fantastic ideas. I’ve seen some of the stuff he’s done and it’s just amazing, and then there’s other ones who are doing more e-commerce-type businesses and we get some great ideas from them people, too.
Rob: Yeah, that makes sense.
Mike: I don’t know. It depends on what you’re looking for.
Rob: For me, where I’m at right now where I don’t really want to start another SaaS app, it was super helpful because I was able to talk to people about what it’s like running an e-commerce shop, not that I’m going to necessarily run one but I at least was able to talk for an hour to someone who’s been running e-commerce, manufacturing their own stuff for 10 years. It’s like, “Wow, those are the headaches of it. I don’t think I want to do that.”
Then, another guy who’s built two authority content sites from scratch, not just these little content sites that have AdSense or whatever but really built something substantial that he sold for I’m presuming six-figure exits–and I don’t know how much they were–but he had a whole process and a whole realm of knowledge that I have just not been exposed to. That was helpful for me to be like, “Yeah, maybe an authority content site is the next thing for me.” It just got me thinking along different lines, which is helpful because I am, at this point, direction-less in the sense of what I am going to do next.
Mike: Yeah, that makes sense. I’m curious to know what was it that you went into, thinking that you were going to get out of it because, obviously, you’ve had some hesitations going into it. I think most of just were the fact that the people in the group probably knew each other. Did you make the mistake of asking if everyone knew who you were?
Rob: Of course not. I never do that. You’ve done that, haven’t you?
Mike: Yes.
Rob: Did you do that at Big Snow Tiny Conf and you’re like, “No, I didn’t mean that. I didn’t mean it that way.”
Mike: Yes, that was my first year because everybody has been talking to each other and I showed up late. I was three hours later than everybody else and it seemed like everyone knew each other. They knew who I was but I wasn’t sure and I just said, “Does anyone here not know who I am?” and as the words left, I’m like, “No!”
Rob: “I mis-phrased that. That’s not what I meant!”
Mike: Everyone laughed. It’s been a running joke for three or four years now.
Rob: That’s funny. Now, Chris had told me that that the folks never knew of me or knew who I was. I don’t know if that’s through being married to Sherrie [ph] because she’s in the group or it’s just that our circles crossed enough. It was nice. There were a few people who just knew me as Sherrie’s [ph] husband and then, when it came up that I was the co-founder at Drip, they were like, “I love Drip.” That was actually cool. I think almost everyone in the group used Drip or uses Drip so that was a touch-point for some folks, which is nice.
Mike: It’s funny that you mentioned overlapping circles because my wife has been spinning up her business and getting into different things with Facebook ad campaigns and this and that. There are certain things that are recommended to her or certain types of products so our circles are starting to overlap in more ways here and there. It’s just funny hearing some of the tools that she’s starting to use, like I either know who that person is or I’ve heard of the tool before and have thoughts and opinions on it.
Rob: That’s funny. You asked me what I thought I was going to get out of it. I thought that being in a room with a dozen successful founders, people who have launched businesses, grown businesses and several who have exited some multiple times, I just thought that there would be interesting conversations and that I would learn something. I went in very deliberately. Within the first day, I knew everybody and so at dinner, I was like, “You know what? I’m really interested in what this guy has to say about content sites, authority sites that have a personality.”
Right now, it’s just kind of article factories, but actually having a point of view in everything. I sat next to him and he asked me a bunch of questions about what I was going to do next and he said, during his process of exiting and then doing his next thing, he made some mistakes so he made some recommendations for that and then I grilled him for quite a while about, “If you’re doing it from scratch, what would it look like if you’d acquire one?” I wanted to pick people’s brains and get an idea of what it’s really like to run all these different types of businesses. I think that’s really what I went in doing.
I came away with not only that knowledge but I was also inspired. I think that, over the past several months, I’m not that motivated to start something new because it’s so much work. As we know and as we talk about on the show and as we’ve lived, it can be really stressful. At this point, I don’t know why I’d put myself through that again, and that’s the struggle, but I also want to do interesting things. I want to work on things that I’m excited about so part of has been helped purely a lot with ZenFounder stuff and gearing up some of that marketing.
In addition to that, I do think that I need a project to just be working on and so I’m trying to strike that balance of having something that’s interesting but not so stressful that I don’t have to work on all the time but I can when I want to. That’s where a SaaS app becomes a really tough sell because it’s just so needy. It’s like having a new baby versus some of these other business models that are a lot easier to have in a mode where you can swoop in, do a bunch of work and then leave it for a while.
Before SaaS, those are the businesses I had and my life was definitely more calm back then. It’s good. That’s what I got out of it, was being opposed to other business models and ways. If I look back at my experience, I’ve always wanted financial freedom and the freedom to work on interesting things and work on what I want. I tried to get that early on with investing in stocks and then I tried to do it via real estate and then I did it via entrepreneurship. Even in the early days, it was not all software. I acquired some e-books, I did had an e-commerce site, I had this whole variety of things and then I got into SaaS. I’ve been through that but it’s like I’ve never been married to a single business model or a single way to make money or have been dogmatic about it. Should we dive into the importance of consistency?
Mike: Sure, why don’t we?
Rob: Hey, it’s the 400th episode, man. We kind of get to do what we want to do today, I think. That’s how I feel about this.
Mike: Technically, we used to do that every time.
Rob: That’s a good technicality. We did get some high-fives and some compliments from a couple of folks. Austin Peak [ph] wrote in and he said, “I just want to thank you. I’ve been listening to your podcast for years and you guys helped inspire me. I can remember the second you changed my life and opened me up to even more business podcasts. It was Episode 240. I was folding laundry in my bedroom. I stopped what I was doing and I wrote down every other podcast you mentioned and it helped change my life.”
That’s kind of cool. Now and again, we get these, “You’ve changed my life,” or, “You really opened my eyes to something that I didn’t see before.” I think you and I take for granted that we just hop on the mic every week, we ship the podcast 20 to 30 minutes, typically, but we really have had a striking impact on a lot of people both through FounderCafe and Micropreneur Academy, MicroConf and the podcast. In fact, I want to roll an audio clip here from Fatcat Apps’ own David Hehenburger.
A3: Hey, Rob and Mike. This is David Hehenburger. I’ve been listening to your podcast since the early days and it’s had a huge impact on me. The biggest thing was when I first listened to the podcast, I was stuck in a consulting business that I wasn’t really trying that much. By listening to your podcast and following your Rob’s advice of stair-stepping, I was able to get out of consulting, launch a number of successful work-less plugins and now, over the last of year, also launched a successful SaaS app. This podcast has just had a huge impact on me. Thanks so much for everything, guys.
Rob: Mike, I don’t think we toot our own horns very much and I think that’s probably a good quality. We come across as authentic on the podcast because we are just who we are, but I think the 400th episode is the time when we can celebrate what we’ve done, what we’ve built and the impact that we’ve had on people. I was perusing our very ancient website, startupsfortherestofus.com. We need a facelift on that thing soon, but there’s a Success Stories tab and we stopped updating this a while ago.
Basically, we did a call at one point for people who had listened to the podcast and launched a product that allowed them to leave their day job. There’s about 20 names on it and, again, we added names for a couple of months and then stopped. I know that there are more people impacted, but Kevin Taylor from Beam Calcs, Duncan Murtagh from Vetter, Tom Fakes from FHRNews, Phil Derksen from WP Simple Pay, David Hehenburger who just sent the voicemail in, Jerome Samuels, Brecht Palombo from Distressed Pro–a lot of folks don’t know that he was an early member of the Micropreneur Academy and said that he implemented a bunch of stuff that we’d mentioned in there–Jordan Sherer from Widefido, Nate Grahek from StickyAlbums–StickyAlbums, as far as I know, is a seven-figure business. He’s very succesful in the photography space and eh had just been a long-time listener, Richard Chen from phpGrid and there are others.
I think it’s cool to do that. I think, for me, a lot of times, it doesn’t feel real. What’s your take on it? How does all that resonate with you?
Mike: I agree with you. I think I’m in the same camp where I don’t think about it often. Occasionally, we will get somebody who writes into us a set of questions at startupsfortherestofus.com and says, “Hey, I just wanted to let you know we did this and would you mind putting our link up under the success stories?” We obviously don’t go and update it a lot but there are occasions where people will write in and say something, saying, “Hey, you changed my life,” or, “We implemented this,” or, “We launched this new app that got me out of a job that sucked.”
We will do that on occasion but I don’t think about it too much, I guess. Maybe I should but I do know that, obviously, I see the stats and stuff. It’s hard, in many ways, to associate an email address or a blip on the screen from some metric someplace with actual people, I’ll say, because there’s that level of abstraction. I actually teach people this when I’m talking to them about Bluetick because in every email address there, there’s a person behind it. You have to treat it that way. I think it’s very easy to lose sight of that especially when you’re looking at all these different marketing tools that measure this or analyze that. It’s like every single one of those has typically keyed off a person.
Rob: Yeah, and I think we made a good move in launching MicroConf. I remember the reason we did it and it was because Micropreneur Academy had a community it was building and we wanted to meet people in person. The fact that we now know, in person, face-to-face, by name, so many podcast listeners, I think, is a unique thing because if we didn’t have MicroConf, how would we have met all these people? Maybe at BoS or maybe at other conferences, but that has helped me understand who are audience is more.
I think it’s also helped shape some of the content that we produce and how we talk on the show. There are days when I will outline a podcast while we’re on the show and I’m saying something almost specifically to one person based on either one conversation I had with them or just the persona of, “Yes, this person with these WordPress plugins, this episode’s for you. These are all my thoughts that I would tell you if I had the time to do an individual call with you but, instead, I’m just going to record this podcast.” I think that’s been helpful to have real people on the other side of the earbuds because a lot of podcasts don’t have that.
Think about if you had 20,000 listeners and you didn’t have a conference. How would you possibly know the people who are listening?
Mike: Yeah, you have absolutely no idea. I do the same thing to some extent as well on occasion in an episode and there was somebody who emailed me earlier in the week or earlier in the month and said, “Hey, what are your thoughts on this?” and, a lot of times, I’ll reiterate them through the course of a podcast episode because you can be a lot more expansive on a podcast episode than you can in an email. I have tried to cut down on the length of the emails that I write these days but it’s easier to talk about it and just do a podcast episode on it than it is to drill into all the little details and edge cases in an email versus somebody asking for advice about a specific thing. Speaking of which, we should also put out a call and say, “If anyone has questions that they want answered for the podcast, this would be a good time to send those in because we’re running low on questions,” I believe. Is that correct?
Rob: That’s correct, yep. If you can, you can call into our voicemail or send us an .mp3 file or even just drop us an email because we are almost out of them so we would get your question quite soon.
Mike: We’re accepting emails now?
Rob: Accepting emails and accepting five-star reviews on iTunes. I’m kidding. I wanted to run through just a couple of favored and most popular episodes but it’s hard to know what resonates with different people. I remember Episode 47 was Movies for Nerds and it was a bunch of startup tales, and I remember that being a big deal for a while. I think it had our highest listenership of our first 50 episodes for quite some time. Then, a favorite is always the podcast for startup founders. Episode 104, 240 and 395 are basically that episode. It’s podcasts and we’ve updated that several times. Then, Episode 255, Moving on from AuditShark, seems to have gotten a spike in listenership on that one and some extra-popularity which I think is interesting. You can still get that one in the podcast feed. I think the feed goes back to Episode 254. Are there any others that you remember offhand or do they all start to blend together at some point?
Mike: I think they blend a lot, to be honest. It’s hard for me to go back and say because I was there for the entire conversation so it’s hard for me to point to any particular one where it’s like, “That really stuck out to me,” or, “I listened to that half a dozen times,” because I was involved in the discussions. There’s not many that really pop out. It’s like, “This is interesting,” although I have heard people who have commented on the Moving on from AuditShark and how difficult that was, especially leading up to that whole decision.
Rob: That makes sense. I have gone back periodically and I’ll just go back and randomly pick 10 episodes. I might go back a year or even a year and a half. I’ll go back to that early podcast feed or as far back as it goes, which I think goes back 150 episodes so I guess that would be almost three years. I’ll listen to 5 or 10 in a row and it’s kind of fun to walk down memory lane. Typically, you’re either working on AuditShark or just moving on. I’m working on Drip or, even before that, HitTail.
It’s interesting for me to see what I agree with that we say and what I disagree with. I think things change that quickly, that there are opinions that one or both of us had that I’m like, “You know what? I don’t think that holds true anymore,” or there’s things that we say that I’m like, “Wow, that’s really insightful. That’s a pretty smart thing. “It’s not patting myself on the back; it’s just like, yeah, Mike and I had a really solid answer to that listener’s questions or a solid take on pre-launch email marketing or that kind of stuff. It’s fun to do that. I don’t do that much but, when I do, there’s definitely some good content on the show, I think.
Mike: One of the things I wonder about is, a long time ago, we’ve made the decision to put the transcripts of all the episodes out there partly for SEO reasons but also just so that it made it easier for us to go back and search through if we’ve found something. I think that we’re still very happy that we made that decision even though it cost money for every single one of those transcriptions, but what I find interesting about what you just said is that when our opinions on something change, there’s still that record of what our opinions were at the time. I wonder if there’s any confusion that could potentially be drawn out of that by people who search for something and then say, “This is what Mike’s and Rob’s opinions were on this back in 2014 or something like that,” and maybe that leads them down the wrong path. I wonder if that’s a nonsensical concern but I’m thinking about that too much.
Rob: I don’t know. People have definitely asked for an updated take on certain topics. I guess it’s hard to know or impossible to know.
Mike: Yeah, you wouldn’t know unless somebody said, “Hey, I followed this advice,” and then you’re like, “Yeah, now that you asked me again, I’m thinking about that and I would do something different now versus then.” That’s part of the value of having that transcript or being able to say, “This is from four years ago or five years ago.” People can also take that in context and say, “It’s from X years ago. Does that still hold true?”
Rob: Yeah, that’s true. I think you’re leading us to the topic of today’s episode, which is probably just going to be a short conversation at this point because I feel like this has been good. Just reminiscing and talking about things, I think, is fun to do. We don’t do that very much and so it’s interesting to think about. We titled this one The Importance of Consistency and I think the consistency of showing up every week has been perhaps one of our biggest weapons or one of our biggest strengths in building the podcast.
I know, early on, we did every week and then we ran at a content about 20 episodes in and then we started going every other week and realized that the listenership was not growing at all. Then, we made it a commitment and we also made it easier. We make it so that we show up, we record and then our editor does everything from there. I think that was a game-changing issue for us, getting someone who we can essentially pay to really get the show produced. That’s the only reason.
I think the two reasons we’ve been so consistent–I know from my perspective–is, number one, because it’s not a ton of work for me. Even in the busiest and most stressful days of growing Drip, selling Drip and all of that stuff, I knew that I could show up on the mic for about 45 minutes and you and I could record and that it would be there. It’s very, very rare that you or I miss an episode because we’re too busy. I know if that ever happens. It’s always because there’s a vacation or we have a scheduling snafu or something.I can’t remember a time where you were like, “You know what? I’m just swamped this week. I can’t record.” It just doesn’t happen. We’ve prioritized it and it’s on both of our calendars. That’s the other thing. If this was a solo podcast, there would be so many weeks where I wouldn’t show up, but the fact that I know that you’re going to be there means I can’t leave you hanging.
Mike: I think that has to do more with accountability and having yourself accountable to somebody else. It’s like a gym partner. If you’re going to the gym by yourself, it’s a lot easier to fall off the wagon than if you know that your buddy is going to meet you there and you’re going to lift weights every Tuesday or four to five days a week at 7:00 AM. Somebody else is depending on you to be there.
Rob: Yeah, that makes sense. As you pulled a couple of references, there’s an inked.com article, differenceconsulting.com and [0:30:13.5] Express. We’ll link them up in the show notes but these are talking about consistency and the power of it.
Mike: Yep, and I think the first one is that, for me at least, consistency builds predictability. For other people, it’s essentially eliminating the unknown. We drop this podcast early in the morning every single Tuesday almost without fail except when there’s a technical glitch. When that happens, there are people who will email us and say, “Hey, I don’t see the episode out there. What’s going on?” Everyone knows it’s going to be there and if there’s something that comes up where we’re going to need to record an episode in advance, we make it happen. We always have a contingency plan. We plan ahead and make sure that that’s going to happen because we know that if we don’t, we’re going to get emails, tweets and things like that like, “Hey, where is the podcast episode?” That happens when there’s a glitch, but we don’t miss the episodes.
Rob: That’s right. Even in the weeks of MicroConf which are super busy and taxing for us, we record ahead, in essence. We get an episode or two ahead. I was thinking there was one episode that was about 40 episodes ago so probably around 360-ish where you went on vacation or something happened last-minute and I was trying to get a guest and I couldn’t.
Mike: It was Episode 360, the one where Rob takes over the show.
Rob: Something happened where my guest fell through and I couldn’t get anybody online. It’s just a solo episode and I comment in the episode like, “I’m doing this because we need to ship something and I’m just going to talk to the mic.” I answered a bunch of listener questions that day and it was actually fun. I wouldn’t want to do it every week but it’s that kind of thing of just making sure that we get something into your earbuds every Tuesday morning.
Mike: Interesting that you said you’re going to talk to the mic.
Rob: I know. Consistency has done a lot for us. It builds trust. It’s predictable so it eliminates unknown for folks, and I think these articles were saying it shows dedication. It shows that we’re committed to something. I think subscribing to a podcast and sticking with it is a commitment. It’s a bummer when I subscribe to podcasts and I get invested and then they just pod-fade and they disappear. It’s like, “Man, this sucked.” I think the fact that we do have this many episodes can be a show of dedication and allows people to trust us more that we’re going to keep shipping.
Mike: Right, and the other thing I think is interesting is that, early on, what our main goal with the podcast was, really, to help promote FounderCafe but I think that that changed over time because we really don’t promote FounderCafe too much on the podcast. In fact, I’ve heard from people, “You should.” People tell us, “You should promote FounderFace a lot more on the show because, then, you get more people into it and you get more conversations and there’s the whole network of facts that can go into that.”
If you are interested, go over to foundercafe.com. There’s an application that you can fill out. It’s $100.00 per quarter and it’s a set of forums that you can join to interact with and ask questions of and get information from people about whatever it is that you’re working on, whether it’s a new marketing campaign or you have a question about how to use a particular product or what other products people would recommend for a certain situation. Definitely go in there and check it out. The application process is really just to help filter people out that are not a good fit. There are people where we’ve essentially turned them away because in the application, we ask what they want to get out of it and, if they’re not going to get out of it, what they would expect, then we’re just going to say, “Hey, look. This is not a good fit for you.”
Rob: Yep. It’s an online community of seasoned entrepreneurs just like you, and we do a really good job with the application process in making sure that we get folks in there who are going to help each other succeed in essence foundercafe.com.
Mike: I think the other interesting thing about the podcast and how we’ve been so consistent over time is that, as I said, we changed what the main reason that we’re doing it early on was but, since then, one of the things that comes to mind is back when we first started the podcast, there really weren’t any other podcasts that were like ours or was catering to our audience. It’s interesting that there are a lot of other podcasts that have popped up that are, in a similar vein, startup founders, working from home, boot-strapped or self-funded and building something and just talking about it. I think it’s really interesting to have seen those but early on–and, again, not to toot our horn here–we’re trailblazing. At this point, we’re no longer trailblazing. We’re like the old horse on the track.
Rob: That’s true. Sometimes, I wonder if someone comes along and says, “You have 400 episodes? That’s either really cool and shows you’re consistent or it’s overwhelming.” They’re like, “Well, I don’t want to get into this show. There’s already 400 episodes. I can’t possibly catch up.”
Mike: I was going to say potentially demotivating to certain people because they’re like, “I would start a podcast but these guys have got hundreds of episodes. Who would listen to me if these guys are going that strong or going for that long?”
Rob: Yeah, I wonder if it cuts both ways. I was thinking more from a listener perspective, someone who decides to subscribe or not. 400 episodes could honestly discourage them because they just can’t catch up. It’s like, “Well, I’ve already missed all that.” It’s like coming into a show or hearing about it when it’s five seasons and it’s like, “Why? I don’t think I really want to watch all that.”
Mike: Yeah, I’m not sure. That can happen with TV shows and stuff like that like The Sopranos. I’m never going to go and watch that. It’s just not going to happen.
Rob: I know. I’ve heard it’s so good but there’s too many episodes. There isn’t too much good TV out these days.
Mike: I think that’s a little bit different from what this podcast offers just because in this podcast, every episode is different and you can take it as a standalone thing versus something like a TV show where if you’re not really involved from the beginning, it can be hard to get in there. I think General Hospital has 14,000 episodes or something like that. It’s some ridiculous thing. They’ve been going since the ’60s or ’70s and they just drop a new one every week. I think Sesame Street has some ridiculous number as well.
Rob: You can drop into them. I think our podcast is more like Law & Order because it’s episodic. It’s like a single episode, start to finish, you can get value out of it or you can follow the story over the years. That’s what I’ve heard from people who liked the podcast, is they say they came for the content, originally, and the tips and the tactics and then they stick around to hear what we’re up to, in essence.
Mike: I guess it can go either way, then. What do you get out of the podcast these days?
Rob: That’s a good question. I don’t know that I’ve asked myself that question in a few years. I think, early on, it was definitely because there was no other content like it and I felt like it should exist in the world. I wanted there to be people talking about this stuff much for the same reason that we had Micropreneur Academy and FounderCafe and MicroConf because we wanted them to exist in a world and we wanted to be part of those communities.
That’s what the podcast was in the early days as well to promote what’s now FounderCafe. Then, over the years, I think, it’s certainly helped with Drip because just having the audience as an early seed, an early customer group, was helpful. These days, I don’t know. I don’t know that I can point directly to something right now that I’m gaining from being on the podcast but I do enjoy it, if that makes sense. I don’t know that I gain anything by playing Dungeons and Dragons with my 11-year-old but it’s fun. I have gotten things out of it in the past. It’s worthwhile, certainly, to show up and do the show because it has yielded so many things, I think, for both of us.
Mike: I think I would call a random benefit generator, like you don’t know what the benefits are. It’s hard to point to any specific thing like, “By doing this podcast, I’m going to get 75 new people added to my product and I’m going to make these certain relationships.” I think it’s just hard to predict those in advance or, even at the time and, say, “Down the road, I’m going to get these benefits out of it.” There’s definitely examples you can point to in the past, but I think that there’s a lot of things that you just get this random set of benefits moving forward that’s hard to nail down and say, “This is what I get out of it.”
Rob: Yeah, that makes sense. Someone said a portion of the value you put into the world, you get a small portion of that back, and I think that’s a really apt and insightful thought, and that has been true in my experience. I think that, by putting the podcast out, there’s value created in the world and they put in the hard work. The founders who listen to this, they put in the hard work. If we had some type of influence or motivation or we provide something for them, I think there’s a lot of value created in the world and a little bit of that does wind up coming back to us, whether it’s the ability to sell at a conference, whether it’s business opportunities or whether it’s if you or I needed to raise funding to do a small, bootstrap kind of angel round.
I think that the podcast has made that so much more possible for us, and we’ve had other avenues as well. Obviously, I still have an email list from my blog. I have the book list. There are other things that we do but the podcast is probably the thing that you and I have done. Certainly, for me, it’s the thing I’ve done with the most consistency because of what we said earlier. We’ve made it pretty streamlined and it’s enjoyable and because of the commitment to do it. Imagine if we missed a week.
Mike: I think the internet would freak out for a little while.
Rob: It would feel really weird to me to not have an episode or if we decided that today was the last show. At 400, we’re just going to be done. That would really be odd to not be putting something into the world. I think that’s the thing, is blogging is so time-consuming and as much as I loved doing it, just once the business has gotten in the way and I needed to focus, I had to stop blogging. I made that decision to do it, but I still want to be able to put thoughts into the world because I am experiencing new things and I feel like I still have things to teach and share with people, and the podcast is such a good way to do that because of the low time commitment.
Mike: I also think that it’s a better medium for doing it than a blog post where somebody might hit upon a blog post and they may or may not read it. If somebody subscribes to your podcast, it becomes a much more intimate experience where they feel invested in the story and the people who are doing the podcast, and I don’t think a blog can raise that level of connection between the reader and the author versus something with a podcast, like you’re in their ear. Your actual value is in their ear.
Rob: It’s definitely much more engaging, and I think we learned that early on. I talked to a few podcasters who are also bloggers and, in our early days, I remember my blogging audience was 10 times the size of the podcast audience but I felt like the podcast audience was so, so much more engaged and so much more willing to interact with us. Now that the podcast audience has grown to what it is, there’s just a lot of value in having people listening in through the earbuds, as you said.
Mike: I guess we should at least give one tip for consistency, though, because we’ve talked about the importance of it but we haven’t actually talked too much about any sort of tips for maintaining consistency. We talked a little bit about having an accountability partner or something along those lines. I think we briefly talked about what the goals are, the benefits of doing something for a while. Do you have a tip that you can share for consistency?
Rob: You just couldn’t let it go, huh? You had to go with the patented Starters for the Rest of Us formula of providing some kind of tip or tactic in every episode.
Mike: You want to give that tip on the next episode? That’ll be the cliffhanger for Episode 400?
Rob: I have a couple of tips and it’s what I’ve just said. If you want to be consistent, have that accountability partner where you have to show up, make it easy or reduce all the friction you can. If you want to be consistent about going to the gym, have all your gym clothes already in the car so you don’t have to look for them in the morning. Just make it easy, and that’s what we’ve done with the podcast, is hiring an editor and making the process so we just let this get put into Dropbox and then it magically shows up in my feed five days later with the transcript and all that. I think those would be my two biggest ones, is remove friction and try to have someone else busting your chops if you don’t show up.
Mike: I think those are good ones to leave off with. If you have a question for us, you can call into our voicemail number at 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com. The theme music is excerpt from We’re Outta Control by MoOt used under creative commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for the full transcript of each episode. Thanks for listening. We’ll see you next time and thanks for sticking with us for our 400 episodes.
Rob: Nice work, man. High-five on 400 episodes. I’m pretty proud that we’ve done this.
Mike: Me, too.
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at building, launching, and in growing software products, whether you’ve built your first product; you’re just thinking about it.
Rob: I’m Rob.
Mike: And I’m Mike.
Rob: And we’re here to share our experience to help you avoid the same mistakes we made. 400 Episodes, Sir. Congratulations.
Mike: Thank you. I did it all by myself.
Rob: I know you did. How does it feel?
Mike: I don’t know. I feel very run down today but I don’t think that it has anything to do with Episode 400. I think it has to do with the fact that yesterday was the Fourth of July here so we had a bunch of people over and my kids are away for the week. They’re at Sleepaway Camp. We had a bunch of people over and we’re just like grilling and swimming in the pool, which was 92 degrees or something like that, and we haven’t even kept it covered for several days; it’s just hot as heck.
Rob: Yeah, and you stood out, man. You were hanging out. You drank too much so then you’re hung over and tired today.
Mike: I’m just tired. I’m not hung over. That’s the funny part. I don’t know if it’s funny, but I’m not hung over; I’m just tired. I didn’t sleep very well, I don’t think.
Rob: Yeah, and I feel a little bit the same way you do. We had friends over as well. I’m also kind of tired from the heat and just from whatever else. I think the 400 Episode thing makes me feel, if anything, old. It’s like we’ve been doing this for eight years, I believe. Is that right? Wasn’t it 2010?
Mike: Yes, 2010.
Rob: It was somewhere between February and April of 2010. I could look at the archived pages post, but it’s a long time to do this. We’ve had millions and millions of downloads. I was just looking at the statistics, millions of downloads, tens of thousands of listeners per episode. We’ve built something. We’ve built something pretty special, I think, that resonates with people. We’ll talk more about our favorite episodes and we’d have some listeners who wrote in, and I thought that was really nice. I think it’s a testament that we basically were able to show MicroConf out of the podcast. I don’t know that we could have grown it to what it is without this show. It’s like the entire conference. These days, MicroConf is its own name but, back in the day, we really sold tickets. It was kind of like my email list, your email list and people listening to Startups for the Rest of Us.
Mike: Yeah, and I think that just having that podcast episode that dropped every single Tuesday almost without fail makes people feel that they’re part of something. Then, when you come to MicroConf, you’re meeting the same types of people who were listening to the podcast. As you said, things have grown and people who come to MicroConf don’t necessarily always listen to the podcast. It’s taken a life of its own but, in the early days like that, that was really what drove that audience, I’ll say.
Rob: Yeah, for sure. How about you? What else is going on this week?
Mike: I have a meet-up that I put together this evening. I’m meeting a bunch of people who are either FounderCafe members or attended MicroConf or both this evening over in Worcester. That should be fun. We’re going to head over to British Beer Works or something like that and meet up around six o’clock and just have a couple of drinks, have dinner and just talk business.
Rob: That’s super cool. Did you just initiate that out of nowhere?
Mike: It wasn’t completely out of nowhere. When we set up the slack group for MicroConf, there were a bunch of people in there who were like, “Hey, who’s in the Greater Boston area?” and a few different people chimed in. I think that there was even a private channel that was created for people who are in the Greater Boston area, and then a couple of people mentioned to get in together. What I did was I just went through and looked to see who had come to MicroConf who was in the Boston area and I just emailed them. I have a running list of people that I know who live in the area and I just went through them, emailed them all and said, “Hey, here’s the time, date and place. Who wants to get together?” About half a dozen people or so chimed in and said, “Yeah, absolutely. Let’s go.”
Rob: That’s super cool. That’ll be a nice-sized group, too. I like that size.
Mike: Yeah. We’ll see how it goes.
Rob: Cool. Once you’ve done it, I’m interested to hear how it was on the show.
Mike: Yeah. That’s something we’ve actually talked a little bit about in the past in the background between you and me, just figuring out if that’s something that we wanted to facilitate in different places. I don’t know if there’s a good technical way to manage that, to be honest.
Rob: Yeah, the TropiColombia guys due their juntos, but they do have local meet-ups. It’s definitely possible but it’s always been the question of, “Do we have the bandwidth?” or, “If we don’t do it and we hire someone to do it, how do we make it pay for itself?” basically, right?
Mike: Right.
Rob: We’ve talked about not wanting to run an events business, like we don’t want to be in the events business and yet we throw three events a year already with the three MicroConfs. I think if we did the juntos or something like that, local meet-ups, basically, it would definitely span out itself. I think if we had the aspiration, we could totally pull it off. It’s just not you nor I have ever really wanted to gear up and not work on our software products in order to do that.
Mike: Yeah, I think that’s the biggest issue, is just having the bandwidth to be able to do it and, as you said, without charging for it and hiring somebody to help manage and facilitate all that. It’d be really hard for us to pull it off.
Rob: Yeah. Last weekend, I went to a three-day mastermind retreat, is what I’ call it, and it was the Rhodium Community. You know Rhodium Weekend? Have you heard of it? Chris Yates runs Rhodium, and I have a lot of respect much like I often tell people that MicroConf is the younger sibling of BoS. It’s less expensive, it’s more focused in slightly earlier-stage companies, very few have funding and BoS is a different story. It’s still very much about building real software companies and not with venture-back stuff even though some of them do take venture funding, but I have a lot of respect for BoS.
I also have a lot of respect for Rhodium Weekend. It’s a 100-person event held in Vegas every year. It’s run by Chris Yates, and it is more about buying and selling websites. There’s a lot of talk about internet marketing, but what I found is, like MicroConf, it’s very ethical. Since Chris has built the audience, he’s been very picky about who he lets in and so it’s not the sleazy internet marketing. You can go to a lot of really shitty internet marketing conferences. People are pitching from the stage and that’s not what Rhodium is.
Every year, there’s a Rhodium conference and then he has this mastermind that he runs that Sherrie [ph], my wife is a part of, and it’s a monthly call with about 14 people, and they do hot-seat format. They do all kinds of stuff. Once a year, that small group of 14, goes to a house and stays there for three days and they do a hot-seat format. Sherrie [ph] was unable to make it and there was a seed open so they invited me because I know Chris and I actually knew a few people in the group as well.
For me, I had to really think about whether or not I wanted to do it because of that format. I know you’ve done this with Big Snow Tiny Conf. I’ve never done that. I’ve done really small things with four or five people and then I obviously do MicroConf, but that in-between felt very uncomfortable for me going into it, especially knowing only three people there in advance. I really debated whether to go or not and, in retrospect, it was awesome, like it was really, really good as I kind of knew in the back of mind it would be.
I felt a little introverted and everybody else knows each other really well because they’re on these calls and they hang out, but it was a big deal. It was game-changing for me in terms of my thought process of, “I think I want to do that again.” It makes me really want to do one of the Big Snow Tiny Confsnow that I have more scheduling flexibility. I don’t ski but I’ll drink hot chocolate and read comic books or something while you guys ski or snowboard. I think I want to do it.
The cool thing about it is it really opened my eyes to the value that you can get from a group of that size, and that was my doubt. There were certainly some struggles with it, too. With 15 people, I think in my opinion, it’s just a little bit too big. I would love for it to be 8 to 10, and that would be a perfect size. With all of that said, I can imagine that it might be even more valuable to have everyone having the same type of business or at least similar because they were all over the board.
There were people who literally just build and buy content websites that they monetize with affiliate links and AdSense. There were e-commerce. There were e-commerce drop shippers. There were people who manufactured their own products. There were two or three SaaS. There were some people who just do a lot of SEO and they just build sites and sell them. There’s a real wide variation of who’s done what, and I think that was super helpful but I also imagined, if everyone was SaaS, that there could potentially be more value to it.
Mike: Yeah, and it goes both ways, though, because if you have people who are doing things in different types of businesses, then you get a different perspective than you would if everybody is doing the same type of thing. If everyone was doing SaaS, you don’t get the perspective of, “We’re e-commerce and this is how we do affiliates.” They may view them very differently and you can get really good, solid takeaways from those that you can put together and put forth on your business that are going to work for you. You would not get that if everyone is always talking to the same types of people, I’ll say.
Rob: Yeah, I totally agree. It’s a good point and that absolutely was true. I was surprised how much I had to offer someone doing drop shipping commerce. It was more than I thought. Some hot-seats would start like, “Boy, I’m not sure I have anything to add here,” and then I would have insights. It’s like, “Yeah, that was similar to my experience with Drip.” There’s enough overlap with these businesses–maybe at 60% similarity–because there’s always going to be marketing, and there’s SEO, and there’s affiliate programs or whatever that’s similar. I don’t know. Maybe having everyone working on the same type of thing would take away from that, the variety of thought or whatever.
Mike: Yeah, I definitely think that that’s probably the case. It depends on, specifically, what you’re looking for. You could easily have a group that is all the same types of people than a different group that is very different, and it depends what you’re trying to get out of the group. I think that that’s more the issue than anything else because at Big Snow Tiny Conf, Chad DeShon runs boardgametables.com and he’s got some fantastic ideas but because he’s B2C and he’s selling physical products, he’s not the type of person that I would probably end up in a group with but he’s got fantastic ideas. I’ve seen some of the stuff he’s done and it’s just amazing, and then there’s other ones who are doing more e-commerce-type businesses and we get some great ideas from them people, too.
Rob: Yeah, that makes sense.
Mike: I don’t know. It depends on what you’re looking for.
Rob: For me, where I’m at right now where I don’t really want to start another SaaS app, it was super helpful because I was able to talk to people about what it’s like running an e-commerce shop, not that I’m going to necessarily run one but I at least was able to talk for an hour to someone who’s been running e-commerce, manufacturing their own stuff for 10 years. It’s like, “Wow, those are the headaches of it. I don’t think I want to do that.”
Then, another guy who’s built two authority content sites from scratch, not just these little content sites that have AdSense or whatever but really built something substantial that he sold for I’m presuming six-figure exits–and I don’t know how much they were–but he had a whole process and a whole realm of knowledge that I have just not been exposed to. That was helpful for me to be like, “Yeah, maybe an authority content site is the next thing for me.” It just got me thinking along different lines, which is helpful because I am, at this point, direction-less in the sense of what I am going to do next.
Mike: Yeah, that makes sense. I’m curious to know what was it that you went into, thinking that you were going to get out of it because, obviously, you’ve had some hesitations going into it. I think most of just were the fact that the people in the group probably knew each other. Did you make the mistake of asking if everyone knew who you were?
Rob: Of course not. I never do that. You’ve done that, haven’t you?
Mike: Yes.
Rob: Did you do that at Big Snow Tiny Conf and you’re like, “No, I didn’t mean that. I didn’t mean it that way.”
Mike: Yes, that was my first year because everybody has been talking to each other and I showed up late. I was three hours later than everybody else and it seemed like everyone knew each other. They knew who I was but I wasn’t sure and I just said, “Does anyone here not know who I am?” and as the words left, I’m like, “No!”
Rob: “I mis-phrased that. That’s not what I meant!”
Mike: Everyone laughed. It’s been a running joke for three or four years now.
Rob: That’s funny. Now, Chris had told me that that the folks never knew of me or knew who I was. I don’t know if that’s through being married to Sherrie [ph] because she’s in the group or it’s just that our circles crossed enough. It was nice. There were a few people who just knew me as Sherrie’s [ph] husband and then, when it came up that I was the co-founder at Drip, they were like, “I love Drip.” That was actually cool. I think almost everyone in the group used Drip or uses Drip so that was a touch-point for some folks, which is nice.
Mike: It’s funny that you mentioned overlapping circles because my wife has been spinning up her business and getting into different things with Facebook ad campaigns and this and that. There are certain things that are recommended to her or certain types of products so our circles are starting to overlap in more ways here and there. It’s just funny hearing some of the tools that she’s starting to use, like I either know who that person is or I’ve heard of the tool before and have thoughts and opinions on it.
Rob: That’s funny. You asked me what I thought I was going to get out of it. I thought that being in a room with a dozen successful founders, people who have launched businesses, grown businesses and several who have exited some multiple times, I just thought that there would be interesting conversations and that I would learn something. I went in very deliberately. Within the first day, I knew everybody and so at dinner, I was like, “You know what? I’m really interested in what this guy has to say about content sites, authority sites that have a personality.”
Right now, it’s just kind of article factories, but actually having a point of view in everything. I sat next to him and he asked me a bunch of questions about what I was going to do next and he said, during his process of exiting and then doing his next thing, he made some mistakes so he made some recommendations for that and then I grilled him for quite a while about, “If you’re doing it from scratch, what would it look like if you’d acquire one?” I wanted to pick people’s brains and get an idea of what it’s really like to run all these different types of businesses. I think that’s really what I went in doing.
I came away with not only that knowledge but I was also inspired. I think that, over the past several months, I’m not that motivated to start something new because it’s so much work. As we know and as we talk about on the show and as we’ve lived, it can be really stressful. At this point, I don’t know why I’d put myself through that again, and that’s the struggle, but I also want to do interesting things. I want to work on things that I’m excited about so part of has been helped purely a lot with ZenFounder stuff and gearing up some of that marketing.
In addition to that, I do think that I need a project to just be working on and so I’m trying to strike that balance of having something that’s interesting but not so stressful that I don’t have to work on all the time but I can when I want to. That’s where a SaaS app becomes a really tough sell because it’s just so needy. It’s like having a new baby versus some of these other business models that are a lot easier to have in a mode where you can swoop in, do a bunch of work and then leave it for a while.
Before SaaS, those are the businesses I had and my life was definitely more calm back then. It’s good. That’s what I got out of it, was being opposed to other business models and ways. If I look back at my experience, I’ve always wanted financial freedom and the freedom to work on interesting things and work on what I want. I tried to get that early on with investing in stocks and then I tried to do it via real estate and then I did it via entrepreneurship. Even in the early days, it was not all software. I acquired some e-books, I did had an e-commerce site, I had this whole variety of things and then I got into SaaS. I’ve been through that but it’s like I’ve never been married to a single business model or a single way to make money or have been dogmatic about it. Should we dive into the importance of consistency?
Mike: Sure, why don’t we?
Rob: Hey, it’s the 400th episode, man. We kind of get to do what we want to do today, I think. That’s how I feel about this.
Mike: Technically, we used to do that every time.
Rob: That’s a good technicality. We did get some high-fives and some compliments from a couple of folks. Austin Peak [ph] wrote in and he said, “I just want to thank you. I’ve been listening to your podcast for years and you guys helped inspire me. I can remember the second you changed my life and opened me up to even more business podcasts. It was Episode 240. I was folding laundry in my bedroom. I stopped what I was doing and I wrote down every other podcast you mentioned and it helped change my life.”
That’s kind of cool. Now and again, we get these, “You’ve changed my life,” or, “You really opened my eyes to something that I didn’t see before.” I think you and I take for granted that we just hop on the mic every week, we ship the podcast 20 to 30 minutes, typically, but we really have had a striking impact on a lot of people both through FounderCafe and Micropreneur Academy, MicroConf and the podcast. In fact, I want to roll an audio clip here from Fatcat Apps’ own David Hehenburger.
A3: Hey, Rob and Mike. This is David Hehenburger. I’ve been listening to your podcast since the early days and it’s had a huge impact on me. The biggest thing was when I first listened to the podcast, I was stuck in a consulting business that I wasn’t really trying that much. By listening to your podcast and following your Rob’s advice of stair-stepping, I was able to get out of consulting, launch a number of successful work-less plugins and now, over the last of year, also launched a successful SaaS app. This podcast has just had a huge impact on me. Thanks so much for everything, guys.
Rob: Mike, I don’t think we toot our own horns very much and I think that’s probably a good quality. We come across as authentic on the podcast because we are just who we are, but I think the 400th episode is the time when we can celebrate what we’ve done, what we’ve built and the impact that we’ve had on people. I was perusing our very ancient website, startupsfortherestofus.com. We need a facelift on that thing soon, but there’s a Success Stories tab and we stopped updating this a while ago.
Basically, we did a call at one point for people who had listened to the podcast and launched a product that allowed them to leave their day job. There’s about 20 names on it and, again, we added names for a couple of months and then stopped. I know that there are more people impacted, but Kevin Taylor from Beam Calcs, Duncan Murtagh from Vetter, Tom Fakes from FHRNews, Phil Derksen from WP Simple Pay, David Hehenburger who just sent the voicemail in, Jerome Samuels, Brecht Palombo from Distressed Pro–a lot of folks don’t know that he was an early member of the Micropreneur Academy and said that he implemented a bunch of stuff that we’d mentioned in there–Jordan Sherer from Widefido, Nate Grahek from StickyAlbums–StickyAlbums, as far as I know, is a seven-figure business. He’s very succesful in the photography space and eh had just been a long-time listener, Richard Chen from phpGrid and there are others.
I think it’s cool to do that. I think, for me, a lot of times, it doesn’t feel real. What’s your take on it? How does all that resonate with you?
Mike: I agree with you. I think I’m in the same camp where I don’t think about it often. Occasionally, we will get somebody who writes into us a set of questions at startupsfortherestofus.com and says, “Hey, I just wanted to let you know we did this and would you mind putting our link up under the success stories?” We obviously don’t go and update it a lot but there are occasions where people will write in and say something, saying, “Hey, you changed my life,” or, “We implemented this,” or, “We launched this new app that got me out of a job that sucked.”
We will do that on occasion but I don’t think about it too much, I guess. Maybe I should but I do know that, obviously, I see the stats and stuff. It’s hard, in many ways, to associate an email address or a blip on the screen from some metric someplace with actual people, I’ll say, because there’s that level of abstraction. I actually teach people this when I’m talking to them about Bluetick because in every email address there, there’s a person behind it. You have to treat it that way. I think it’s very easy to lose sight of that especially when you’re looking at all these different marketing tools that measure this or analyze that. It’s like every single one of those has typically keyed off a person.
Rob: Yeah, and I think we made a good move in launching MicroConf. I remember the reason we did it and it was because Micropreneur Academy had a community it was building and we wanted to meet people in person. The fact that we now know, in person, face-to-face, by name, so many podcast listeners, I think, is a unique thing because if we didn’t have MicroConf, how would we have met all these people? Maybe at BoS or maybe at other conferences, but that has helped me understand who are audience is more.
I think it’s also helped shape some of the content that we produce and how we talk on the show. There are days when I will outline a podcast while we’re on the show and I’m saying something almost specifically to one person based on either one conversation I had with them or just the persona of, “Yes, this person with these WordPress plugins, this episode’s for you. These are all my thoughts that I would tell you if I had the time to do an individual call with you but, instead, I’m just going to record this podcast.” I think that’s been helpful to have real people on the other side of the earbuds because a lot of podcasts don’t have that.
Think about if you had 20,000 listeners and you didn’t have a conference. How would you possibly know the people who are listening?
Mike: Yeah, you have absolutely no idea. I do the same thing to some extent as well on occasion in an episode and there was somebody who emailed me earlier in the week or earlier in the month and said, “Hey, what are your thoughts on this?” and, a lot of times, I’ll reiterate them through the course of a podcast episode because you can be a lot more expansive on a podcast episode than you can in an email. I have tried to cut down on the length of the emails that I write these days but it’s easier to talk about it and just do a podcast episode on it than it is to drill into all the little details and edge cases in an email versus somebody asking for advice about a specific thing. Speaking of which, we should also put out a call and say, “If anyone has questions that they want answered for the podcast, this would be a good time to send those in because we’re running low on questions,” I believe. Is that correct?
Rob: That’s correct, yep. If you can, you can call into our voicemail or send us an .mp3 file or even just drop us an email because we are almost out of them so we would get your question quite soon.
Mike: We’re accepting emails now?
Rob: Accepting emails and accepting five-star reviews on iTunes. I’m kidding. I wanted to run through just a couple of favored and most popular episodes but it’s hard to know what resonates with different people. I remember Episode 47 was Movies for Nerds and it was a bunch of startup tales, and I remember that being a big deal for a while. I think it had our highest listenership of our first 50 episodes for quite some time. Then, a favorite is always the podcast for startup founders. Episode 104, 240 and 395 are basically that episode. It’s podcasts and we’ve updated that several times. Then, Episode 255, Moving on from AuditShark, seems to have gotten a spike in listenership on that one and some extra-popularity which I think is interesting. You can still get that one in the podcast feed. I think the feed goes back to Episode 254. Are there any others that you remember offhand or do they all start to blend together at some point?
Mike: I think they blend a lot, to be honest. It’s hard for me to go back and say because I was there for the entire conversation so it’s hard for me to point to any particular one where it’s like, “That really stuck out to me,” or, “I listened to that half a dozen times,” because I was involved in the discussions. There’s not many that really pop out. It’s like, “This is interesting,” although I have heard people who have commented on the Moving on from AuditShark and how difficult that was, especially leading up to that whole decision.
Rob: That makes sense. I have gone back periodically and I’ll just go back and randomly pick 10 episodes. I might go back a year or even a year and a half. I’ll go back to that early podcast feed or as far back as it goes, which I think goes back 150 episodes so I guess that would be almost three years. I’ll listen to 5 or 10 in a row and it’s kind of fun to walk down memory lane. Typically, you’re either working on AuditShark or just moving on. I’m working on Drip or, even before that, HitTail.
It’s interesting for me to see what I agree with that we say and what I disagree with. I think things change that quickly, that there are opinions that one or both of us had that I’m like, “You know what? I don’t think that holds true anymore,” or there’s things that we say that I’m like, “Wow, that’s really insightful. That’s a pretty smart thing. “It’s not patting myself on the back; it’s just like, yeah, Mike and I had a really solid answer to that listener’s questions or a solid take on pre-launch email marketing or that kind of stuff. It’s fun to do that. I don’t do that much but, when I do, there’s definitely some good content on the show, I think.
Mike: One of the things I wonder about is, a long time ago, we’ve made the decision to put the transcripts of all the episodes out there partly for SEO reasons but also just so that it made it easier for us to go back and search through if we’ve found something. I think that we’re still very happy that we made that decision even though it cost money for every single one of those transcriptions, but what I find interesting about what you just said is that when our opinions on something change, there’s still that record of what our opinions were at the time. I wonder if there’s any confusion that could potentially be drawn out of that by people who search for something and then say, “This is what Mike’s and Rob’s opinions were on this back in 2014 or something like that,” and maybe that leads them down the wrong path. I wonder if that’s a nonsensical concern but I’m thinking about that too much.
Rob: I don’t know. People have definitely asked for an updated take on certain topics. I guess it’s hard to know or impossible to know.
Mike: Yeah, you wouldn’t know unless somebody said, “Hey, I followed this advice,” and then you’re like, “Yeah, now that you asked me again, I’m thinking about that and I would do something different now versus then.” That’s part of the value of having that transcript or being able to say, “This is from four years ago or five years ago.” People can also take that in context and say, “It’s from X years ago. Does that still hold true?”
Rob: Yeah, that’s true. I think you’re leading us to the topic of today’s episode, which is probably just going to be a short conversation at this point because I feel like this has been good. Just reminiscing and talking about things, I think, is fun to do. We don’t do that very much and so it’s interesting to think about. We titled this one The Importance of Consistency and I think the consistency of showing up every week has been perhaps one of our biggest weapons or one of our biggest strengths in building the podcast.
I know, early on, we did every week and then we ran at a content about 20 episodes in and then we started going every other week and realized that the listenership was not growing at all. Then, we made it a commitment and we also made it easier. We make it so that we show up, we record and then our editor does everything from there. I think that was a game-changing issue for us, getting someone who we can essentially pay to really get the show produced. That’s the only reason.
I think the two reasons we’ve been so consistent–I know from my perspective–is, number one, because it’s not a ton of work for me. Even in the busiest and most stressful days of growing Drip, selling Drip and all of that stuff, I knew that I could show up on the mic for about 45 minutes and you and I could record and that it would be there. It’s very, very rare that you or I miss an episode because we’re too busy. I know if that ever happens. It’s always because there’s a vacation or we have a scheduling snafu or something.I can’t remember a time where you were like, “You know what? I’m just swamped this week. I can’t record.” It just doesn’t happen. We’ve prioritized it and it’s on both of our calendars. That’s the other thing. If this was a solo podcast, there would be so many weeks where I wouldn’t show up, but the fact that I know that you’re going to be there means I can’t leave you hanging.
Mike: I think that has to do more with accountability and having yourself accountable to somebody else. It’s like a gym partner. If you’re going to the gym by yourself, it’s a lot easier to fall off the wagon than if you know that your buddy is going to meet you there and you’re going to lift weights every Tuesday or four to five days a week at 7:00 AM. Somebody else is depending on you to be there.
Rob: Yeah, that makes sense. As you pulled a couple of references, there’s an inked.com article, differenceconsulting.com and [0:30:13.5] Express. We’ll link them up in the show notes but these are talking about consistency and the power of it.
Mike: Yep, and I think the first one is that, for me at least, consistency builds predictability. For other people, it’s essentially eliminating the unknown. We drop this podcast early in the morning every single Tuesday almost without fail except when there’s a technical glitch. When that happens, there are people who will email us and say, “Hey, I don’t see the episode out there. What’s going on?” Everyone knows it’s going to be there and if there’s something that comes up where we’re going to need to record an episode in advance, we make it happen. We always have a contingency plan. We plan ahead and make sure that that’s going to happen because we know that if we don’t, we’re going to get emails, tweets and things like that like, “Hey, where is the podcast episode?” That happens when there’s a glitch, but we don’t miss the episodes.
Rob: That’s right. Even in the weeks of MicroConf which are super busy and taxing for us, we record ahead, in essence. We get an episode or two ahead. I was thinking there was one episode that was about 40 episodes ago so probably around 360-ish where you went on vacation or something happened last-minute and I was trying to get a guest and I couldn’t.
Mike: It was Episode 360, the one where Rob takes over the show.
Rob: Something happened where my guest fell through and I couldn’t get anybody online. It’s just a solo episode and I comment in the episode like, “I’m doing this because we need to ship something and I’m just going to talk to the mic.” I answered a bunch of listener questions that day and it was actually fun. I wouldn’t want to do it every week but it’s that kind of thing of just making sure that we get something into your earbuds every Tuesday morning.
Mike: Interesting that you said you’re going to talk to the mic.
Rob: I know. Consistency has done a lot for us. It builds trust. It’s predictable so it eliminates unknown for folks, and I think these articles were saying it shows dedication. It shows that we’re committed to something. I think subscribing to a podcast and sticking with it is a commitment. It’s a bummer when I subscribe to podcasts and I get invested and then they just pod-fade and they disappear. It’s like, “Man, this sucked.” I think the fact that we do have this many episodes can be a show of dedication and allows people to trust us more that we’re going to keep shipping.
Mike: Right, and the other thing I think is interesting is that, early on, what our main goal with the podcast was, really, to help promote FounderCafe but I think that that changed over time because we really don’t promote FounderCafe too much on the podcast. In fact, I’ve heard from people, “You should.” People tell us, “You should promote FounderFace a lot more on the show because, then, you get more people into it and you get more conversations and there’s the whole network of facts that can go into that.”
If you are interested, go over to foundercafe.com. There’s an application that you can fill out. It’s $100.00 per quarter and it’s a set of forums that you can join to interact with and ask questions of and get information from people about whatever it is that you’re working on, whether it’s a new marketing campaign or you have a question about how to use a particular product or what other products people would recommend for a certain situation. Definitely go in there and check it out. The application process is really just to help filter people out that are not a good fit. There are people where we’ve essentially turned them away because in the application, we ask what they want to get out of it and, if they’re not going to get out of it, what they would expect, then we’re just going to say, “Hey, look. This is not a good fit for you.”
Rob: Yep. It’s an online community of seasoned entrepreneurs just like you, and we do a really good job with the application process in making sure that we get folks in there who are going to help each other succeed in essence foundercafe.com.
Mike: I think the other interesting thing about the podcast and how we’ve been so consistent over time is that, as I said, we changed what the main reason that we’re doing it early on was but, since then, one of the things that comes to mind is back when we first started the podcast, there really weren’t any other podcasts that were like ours or was catering to our audience. It’s interesting that there are a lot of other podcasts that have popped up that are, in a similar vein, startup founders, working from home, boot-strapped or self-funded and building something and just talking about it. I think it’s really interesting to have seen those but early on–and, again, not to toot our horn here–we’re trailblazing. At this point, we’re no longer trailblazing. We’re like the old horse on the track.
Rob: That’s true. Sometimes, I wonder if someone comes along and says, “You have 400 episodes? That’s either really cool and shows you’re consistent or it’s overwhelming.” They’re like, “Well, I don’t want to get into this show. There’s already 400 episodes. I can’t possibly catch up.”
Mike: I was going to say potentially demotivating to certain people because they’re like, “I would start a podcast but these guys have got hundreds of episodes. Who would listen to me if these guys are going that strong or going for that long?”
Rob: Yeah, I wonder if it cuts both ways. I was thinking more from a listener perspective, someone who decides to subscribe or not. 400 episodes could honestly discourage them because they just can’t catch up. It’s like, “Well, I’ve already missed all that.” It’s like coming into a show or hearing about it when it’s five seasons and it’s like, “Why? I don’t think I really want to watch all that.”
Mike: Yeah, I’m not sure. That can happen with TV shows and stuff like that like The Sopranos. I’m never going to go and watch that. It’s just not going to happen.
Rob: I know. I’ve heard it’s so good but there’s too many episodes. There isn’t too much good TV out these days.
Mike: I think that’s a little bit different from what this podcast offers just because in this podcast, every episode is different and you can take it as a standalone thing versus something like a TV show where if you’re not really involved from the beginning, it can be hard to get in there. I think General Hospital has 14,000 episodes or something like that. It’s some ridiculous thing. They’ve been going since the ’60s or ’70s and they just drop a new one every week. I think Sesame Street has some ridiculous number as well.
Rob: You can drop into them. I think our podcast is more like Law & Order because it’s episodic. It’s like a single episode, start to finish, you can get value out of it or you can follow the story over the years. That’s what I’ve heard from people who liked the podcast, is they say they came for the content, originally, and the tips and the tactics and then they stick around to hear what we’re up to, in essence.
Mike: I guess it can go either way, then. What do you get out of the podcast these days?
Rob: That’s a good question. I don’t know that I’ve asked myself that question in a few years. I think, early on, it was definitely because there was no other content like it and I felt like it should exist in the world. I wanted there to be people talking about this stuff much for the same reason that we had Micropreneur Academy and FounderCafe and MicroConf because we wanted them to exist in a world and we wanted to be part of those communities.
That’s what the podcast was in the early days as well to promote what’s now FounderCafe. Then, over the years, I think, it’s certainly helped with Drip because just having the audience as an early seed, an early customer group, was helpful. These days, I don’t know. I don’t know that I can point directly to something right now that I’m gaining from being on the podcast but I do enjoy it, if that makes sense. I don’t know that I gain anything by playing Dungeons and Dragons with my 11-year-old but it’s fun. I have gotten things out of it in the past. It’s worthwhile, certainly, to show up and do the show because it has yielded so many things, I think, for both of us.
Mike: I think I would call a random benefit generator, like you don’t know what the benefits are. It’s hard to point to any specific thing like, “By doing this podcast, I’m going to get 75 new people added to my product and I’m going to make these certain relationships.” I think it’s just hard to predict those in advance or, even at the time and, say, “Down the road, I’m going to get these benefits out of it.” There’s definitely examples you can point to in the past, but I think that there’s a lot of things that you just get this random set of benefits moving forward that’s hard to nail down and say, “This is what I get out of it.”
Rob: Yeah, that makes sense. Someone said a portion of the value you put into the world, you get a small portion of that back, and I think that’s a really apt and insightful thought, and that has been true in my experience. I think that, by putting the podcast out, there’s value created in the world and they put in the hard work. The founders who listen to this, they put in the hard work. If we had some type of influence or motivation or we provide something for them, I think there’s a lot of value created in the world and a little bit of that does wind up coming back to us, whether it’s the ability to sell at a conference, whether it’s business opportunities or whether it’s if you or I needed to raise funding to do a small, bootstrap kind of angel round.
I think that the podcast has made that so much more possible for us, and we’ve had other avenues as well. Obviously, I still have an email list from my blog. I have the book list. There are other things that we do but the podcast is probably the thing that you and I have done. Certainly, for me, it’s the thing I’ve done with the most consistency because of what we said earlier. We’ve made it pretty streamlined and it’s enjoyable and because of the commitment to do it. Imagine if we missed a week.
Mike: I think the internet would freak out for a little while.
Rob: It would feel really weird to me to not have an episode or if we decided that today was the last show. At 400, we’re just going to be done. That would really be odd to not be putting something into the world. I think that’s the thing, is blogging is so time-consuming and as much as I loved doing it, just once the business has gotten in the way and I needed to focus, I had to stop blogging. I made that decision to do it, but I still want to be able to put thoughts into the world because I am experiencing new things and I feel like I still have things to teach and share with people, and the podcast is such a good way to do that because of the low time commitment.
Mike: I also think that it’s a better medium for doing it than a blog post where somebody might hit upon a blog post and they may or may not read it. If somebody subscribes to your podcast, it becomes a much more intimate experience where they feel invested in the story and the people who are doing the podcast, and I don’t think a blog can raise that level of connection between the reader and the author versus something with a podcast, like you’re in their ear. Your actual value is in their ear.
Rob: It’s definitely much more engaging, and I think we learned that early on. I talked to a few podcasters who are also bloggers and, in our early days, I remember my blogging audience was 10 times the size of the podcast audience but I felt like the podcast audience was so, so much more engaged and so much more willing to interact with us. Now that the podcast audience has grown to what it is, there’s just a lot of value in having people listening in through the earbuds, as you said.
Mike: I guess we should at least give one tip for consistency, though, because we’ve talked about the importance of it but we haven’t actually talked too much about any sort of tips for maintaining consistency. We talked a little bit about having an accountability partner or something along those lines. I think we briefly talked about what the goals are, the benefits of doing something for a while. Do you have a tip that you can share for consistency?
Rob: You just couldn’t let it go, huh? You had to go with the patented Starters for the Rest of Us formula of providing some kind of tip or tactic in every episode.
Mike: You want to give that tip on the next episode? That’ll be the cliffhanger for Episode 400?
Rob: I have a couple of tips and it’s what I’ve just said. If you want to be consistent, have that accountability partner where you have to show up, make it easy or reduce all the friction you can. If you want to be consistent about going to the gym, have all your gym clothes already in the car so you don’t have to look for them in the morning. Just make it easy, and that’s what we’ve done with the podcast, is hiring an editor and making the process so we just let this get put into Dropbox and then it magically shows up in my feed five days later with the transcript and all that. I think those would be my two biggest ones, is remove friction and try to have someone else busting your chops if you don’t show up.
Mike: I think those are good ones to leave off with. If you have a question for us, you can call into our voicemail number at 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com. The theme music is excerpt from We’re Outta Control by MoOt used under creative commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for the full transcript of each episode. Thanks for listening. We’ll see you next time and thanks for sticking with us for our 400 episodes.
Rob: Nice work, man. High-five on 400 episodes. I’m pretty proud that we’ve done this.
Mike: Me, too.
Episode 399 | How Derrick Reimer is Validating His Ambitious Third SaaS Application
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Show Notes
In this episode of Startups For The Rest Of Us, Rob talks with Derrick Reimer, co-founder of Drip, about his new SaaS application Level. They talk about what inspired the idea as well as ways Derrick went about trying to validate it.
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Rob: In this episode of Startups for the Rest of Us, I talked with Drip cofounder Derrick Reimer about what it’s like building and launching his next start up Level. This is Startups for the Rest of Us episode 399.
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 Rob.
Derrick: I’m Derrick.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. How are you this week sir?
Derrick: Well, I am deep in the process right now of building out some mockups of my new app called Level, to hopefully get some more concrete things in front of some of my early access list folks.
Rob: That makes sense. If folks are interested just right from the top, level.app is the domain name. You have a really tight landing page. If you’re listening to this and you want to see–this is maybe 400 to 500 words of text–and it is on point. You’ve got the headings, you can skim it, at the bottom is fomo, the reserve your handle today, you can claim a little slice of real estate on level.app. Then you have the social proof, right? 3,542 people who have reserved their handle including me, and so if your name is Rob, I’m sorry but I got level.app/rob. How’s the landing page working for you?
Derrick: It’s working really well. That is actually a live query now showing the current count. It works surprisingly well. I wasn’t sure exactly what to expect when I first built that but I figured that the scarcity play would be effective. I and had a few conversations with folks at MicroConf too, about this. I saw their eyes light up, and they’re like, “Oh yeah, make sure to let me know before you do that.”
Rob: That’s when you know you’re on to something.
Derrick: This is a good sign. They can appreciate it from a from a marketing ploy and then they’re like, this kind of instinct of, “By the way, I really want to know when you do that so I can get mine.”
Rob: For those listening, if you don’t know what Level is, it’s an alternative to real time chat designed for the software development workflow. I just pulled that right from your landing page but it’s ostensibly a competitor to Slack but a much less interruptive experience. More asynchronous, not the blinking red dot, I guess it’s not blinking in Slack but everything’s synchronous by default. In Slack and you’re going for the opposite in essence, and this stems from?
Derrick: From really my experience with Slack. My first time using Slack was with Drip when we were a team of like two or three. It was not painful at all at that stage, but gradually, as our team size grew, it started to get a little bit more cumbersome. I remember actually, the first time I was in a “big Slack,” team was in our building back in Fresno. That was like an early warning that, “Hmm, I think this maybe doesn’t scale so well as your team grows.”
The building chat was full of just folks tossing around various pieces of information, most of them not urgent but often pushed through with an @channel or an @here, “Hey, there’s some cookies in the in the kitchen.” And it’s like, “Do I really need to get pulled out a flow to hear that piece of information?” That was like an early sign that Slack seems kind of broken especially when there’s a lot of people chatting back and forth.
That experience was reinforced after we were acquired by Leadpages and we joined the broader company wide chat. There was about 150 people in there, and a really similar experience where a lot of well-intentioned people who weren’t trying to interrupt each other, but the tool just kind of failed as in essence and made it really hard not to accidentally interrupt people’s flow. Level is really kind of a reaction to that problem. I just observed this over the course of years and I just couldn’t get it out of my head, so now I’m building my take at a solution.
Rob: Yup. You wrote a manifesto a few months back and published it on your blog derrickreimer.com. I see now you’ve you republished it at level.app/manifesto. In essence, you’re describing the pain points you’ve just indicated—of the interruptive stuff in your story.
Derrick: Yeah. The manifesto was kind of step one actually for introducing the idea to the world. I didn’t really waste any time after moving on from Drip. I think I’ve published it on my last day at Drip, is when it kind of soft launched. Then the following Monday, I really did a big push in the manifesto. I was just sort of itching to get this out into the world. That promotion was probably, I think it worked really well because it sort of made a splash, it made a bold statement. I was able to gather quite a few email addresses off of that. I think it was maybe 300 to 400 within the first couple of days, and so that gave me a nice launching pad of folks to start engaging with. Obviously, people sharing it around on social helps too. I think that was a really effective strategy for making the first intro to the world.
Rob: II know you had kind of been noodling on it for awhile just in the background in your head and because we’re faced with the limitations of Slack everyday working on the Drip team, and you left Drip was it February of this year or was it March? I guess it was three or four months ago?
Derrick: Yeah, three or four months ago. Beginning of March, yeah.
Rob: Because that’s the more important thing for someone who’s listening to this two years from now, they don’t care what month it is. You hit the ground running. When you published the manifesto, I remember you wrote it up in a Google doc and then you had a couple of friends come in and edit and make suggestions and all that stuff, and then you published. What is it Twitter that gave you most of your sign ups? Because I remember, it didn’t go up in Hacker News, right? It got a few or something but it didn’t make it to the front page which I was frankly surprised by. How do you think you got those 300 or 400 sign up for someone else who’s thinking about doing it?
Derrick: It was predominantly Twitter. I think that was effective particularly for me because this is a product that’s marketed towards developers, and that’s kind of the premier place where designer, developer types hang out online. I think that was where most of my strategy was focused was trying to get people to retweet it, to like it, to share it. I did assemble a list of folks who are in my inner circle, friends of mine who also have a decent following on Twitter and did manual reach out to those folks just to tell them, “Hey, I’m going to be sharing this thing, if you wouldn’t mind, could you please tweet it out to your followers?”
Most people are really eager to help out. I think it’s where a lot of the lift came from. I did actually try running some Twitter ads that day. I didn’t really tuned the audience too much. I just let Twitter auto choose that by hitting the promote button. That drove probably 30% of the impressions for it but zero activity. I would say majority, I think I put in maybe $100 into that just to see if this is going to help provide any additional lift. I think a majority of it was really organic shares on social. I also emailed my own personal newsletter list which is pretty small just like a couple hundred folks on there at the time. I think I generated some shares off of that as well.
Rob: I could imagine that. I remember there were some comments, I think it was on Twitter but my favorite comments are always the ones that completely missed the point of an article. I would spend eight hours writing something. I know you spent a lot of time writing this, and then you have a one sentence that has something that is debatably, maybe factual, and someone rips into that, and you’re like, “Dude, that has nothing to do with the point.” There was one of these sentences we’re talking about, “Yeah, once we started using Slack, it was great. This is not news now, but five years ago, it was pretty groundbreaking.” There were somebody like, “Well, 12 years ago or 15 years ago, I was using IRC.” That’s not really the point, what are we even talking about right? Did you did you have much of that or was it the minority?
Derrick: It was very much the minority. I think it was on Reddit actually, and maybe I sort of attracted some of that flaming because I did post my own manifesto on there which I know is a little bit against the way you’re supposed to use the service. I was like, “Oh, what the heck. I’ll just post it in the developer subletter or whatever.” Some people took issue with the timing of when Chat was invented. The whole notion of arguing that this whole argument is invalid because I got the year wrong on when it came to the forefront, it was just laughable.
Rob: Yeah, it is what it is. Luckily, that tends to be the minority thing but it does always side track. That’s actually one of the reason that I completely disabled comments on my blog. I got tired of those conversations going on. There were good comments, and then just the ones that were irritating, or ill-informed, or just obviously looking to nitpick stuff. That’s just not helpful. That’s been my own personal journey with that.
You posted the manifesto, you got a few hundred emails, and you’re on the Art of Product Podcast with Ben Orenstein, mutual friend of ours, and you’ve been talking about your process through that, so I’m sure that that has helped get other developers interested in what you’re up to and probably slowly built your list over time. Once you had that list, what were your next steps? Because I know that you and I had talked about this a while back. This is a very ambitious project, and it’s either going to be awesome, or you’re just going to get smoked by Slack. They’re just going to stomp you, or not even notice you, and no one’s going to switch because of the high switching costs. It’s one or the other, and you’re fully aware of that upfront. What were your early steps of trying to validate the idea a bit more than just positing, “Hey, I can build a better Slack.” It’s like, “Okay, step two is…” What are you up to next?
Derrick: I was definitely leery of making the classic mistake of taking a little bit of early indication that we’re on to something, and just running with it and not talking to anybody—which is a mistake that I’ve made before in the past—and so many folks do. I really wanted to air on the side of having too many conversations with people to try to asses out is this, “Am I on the right track with this? Is this actually going to sell well in the market?”
I think it was within a few weeks after launching the manifesto, I sent an email out to the list. I decided to email the entire list which looking back was probably should have started with a smaller slice just to gauge what the response rate would be. But I basically emailed out and said, “Hey, thanks so much for signing up. I want to have a conversation with you and hear more about what your pain points have been with real time chat in the workplace. At this point, I’m not trying to propose any solution to you beyond what I’m kind of alluding to in the manifesto. I really just want to hear what particularly about real time chat isn’t working for you enough that you gave me your email address.”
I sent this out and I sent a Calendly link with that so that people could book a 20-minute slot on my calendar. I kind of reserved it to afternoons only, thankfully, to reserve the mornings for productive time. I think I got around 40 people booking time on my calendar.
Rob: Dope. That’s both really good news and also like, “Oops,” Were they 20 minutes each? What was that? 16 hours?
Derrick: Something like that. It turned out to be basically three and a half to four weeks of afternoons booked pretty solid. At first I was like, “Oh boy, this is a lot.” But I think, at the time, it’s early enough, I’m like, “This is probably where my time is best spent. Talking to people and hearing in their words what problems they’re having.” That did help guide the way I would thought about the product. I would say influenced where I thought the biggest emphasis should be.
I wasn’t sure if the emphasis should be on reducing interruptions, or just organizing content better, or should I be focused around really optimizing for asynchronous, where are the pain points actually. It helps clarify my thinking. One of the things that we’ve talked about a lot that helped in the early days of Drip was just getting feedback from people and looking for patterns. What are the things that we’re hearing over and over again, and those are likely to be things that we should be paying attention to. I did spot some of those themes and patterns. Looking back, it was helpful to have a decent sample size. If I’d only talked to 10 or 15 people, then that may not have been enough to spot patterns. I think it was good overall.
Rob: Yeah, I know it was a lot of time. It seems like you were learning quite a bit as you were going, and at that time, you didn’t have any mockups right? You really were just talking through how would this sound, or how would you use this, or that kind of stuff.
Derrick: Yeah. I tried hard not to actually tip my hand on what I was thinking. I just wanted to hear unbiased people’s take on like, “You know, if there’s one thing I could change about Slack.” or I ask questions like, “Do you use Slack threads and what do you think about them?” Or, “Do you use search heavily in Slack?” Just to get an idea of like how much are people relying on the tool to be their source of the repository of historical information, versus how much is just ephemeral conversations that get transferred into project management tools. There was a lot of things I was just trying to learn and SaaS out from people without tipping my hand too much on my thoughts of a solution.
Rob: Right. In the back your mind, obviously, you know that you need some kind of differentiation, pretty strong differentiation from Slack because everyone’s going to immediately compare you to Slack. One thing you’ve chosen is to niche down to developers, right? You know that interruptions piss developers off. It breaks your flow. You and I have experienced this first hand as our development team grew.
I used to tell people snooze your Slack for two hours, do not disturb it during this time, just try to get focus so that we can continue ship code at high velocity. You have that but there was there was one other thing, that early on, you made a decision to do that is potentially risky but it’s another differentiator. You want to talk a little bit about that?
Derrick: Sure. You and I noodled this little bit when I was just in the idea stage, and I think we were having drinks one day and I was like, “Alright. I think I figured out the one thing that’s going to really make Level stand out. Let’s open source it.” You spit your drink all over my face. There are examples of this happening, there’s Discourse, there’s Ghost, there’s GitLab, so there are companies that are already doing this.
Rob: Not in the chat space, those are in other spaces but it’s a mockup.
Derrick: Yeah. I will say there are other open source chat tools but I don’t think they’re really making any kind of headway as a business. They’re just open source only. The model of open source, the core code base, but then charge people for hosted version of the service is basically the model that I’m going for. The thinking behind it is that one, since this product is marketed towards developers, a lot of developers sort of appreciate when things are open source, when they can look at the source and see what’s happening with their data, and just sort of have that transparency, and also be able to download it, and stand up a cluster of servers, and manage it themselves if they really want to do that.
I’m sort of banking on the fact that most companies that have sufficient budget to pay for a tool aren’t going to want to go through the hassle of managing their own servers, and patching them, and keeping them up to date and all that kind of stuff. They’re just going to want to pay me for the hosted version. But if you don’t have the budget or if you’re bootstrapped, and you’re really scrappy, then by all means, download it, stand it up on your serve, and when you’re ready, you can transfer the data into the hosted service.
Rob: This was, in essence, around that you and I kept talking about, how you can have a free plan because I think you need one. We both thought you need one because that’s kind of part of the course in the space, and how are you going to do that as a bootstrapper, and not get killed by hosting costs, or not get killed by support and all that, and this is a way to do two things. That’s pretty ingenious if it works, and it’s, like you said, developers or more tech-oriented folks, this is in essence the free plan in addition to the benefit of it being open source which most people like, and then they can pay you for whatever the hosting, and the support, and as an almost SaaS app.
Derrick: Yeah, exactly. It’s not only the free plan but it also kind of paves the way for potentially offering on-prem if I’m sort of optimizing for the ability to setup the entire service from the ground up easily as opposed to just running a SaaS app or maybe you kind of cobble together your own hosting situation that’s not easily replicable. I think building it in this way paves the path for companies that don’t want to run a hosted service, or trust another company to run a hosted service for them, they can download it, and run it inside their firewall too.
Rob: Yeah, and that’s really interesting. Can you do that with Slack?
Derrick: No, I don’t think so.
Rob: There’s no on-prem version as far as I know. That could be an interesting enterprise play. I know that wouldn’t necessarily be the market you go after first, but if you get traction, you get name brand, and people are like, “Hey, not only is this open sourced–” which big companies tend to. They either hate it or love it, but if they understand it they’ll love it, and then like you said, you can do the on-prem play, and those are super expensive, that would be a really nice, high-end revenue source for you if you’re willing to put up with the headaches.
Derrick: Right. That probably would be down the line where I have traction, and a team, and I could kind of establish a team to run that end without me having to do all the sales and all that kind of stuff.
Rob: Totally, yeah. After you got all of the information from those Skype calls, I know you and I then met. I know you did a bunch of thinking on your own for a couple of weeks and then you were at a point and you said, “You know what, I have thoughts, it’s not ready to go into mockups yet. It’s not ready to build a UI. I have a bunch of ideas about different message types and how to structure these, let’s do wide port session.” And so you and I met at the local library, actually, in a nice little room, and you wanted to talk about I think, the value of that, or what that felt like and just the point of doing that.
Derrick: A lot of times there are these key points when you’re designing products where it’s like, there’s a lot of information scattered about and kind of coalescing that information into something actually tangible. It’s hard to hold that all in one person’s head, I feel like. I tried doing a little bit of solo whiteboarding, and I jotted down in a notebook, and I probably could have arrived at similar conclusions, but I think it would have taken a lot longer and probably wouldn’t have been quite as crisp and clear.
We whiteboarded for probably an hour and a half or two hours. I think we came away with some really concrete takeaways. It kind of started with like, “Okay, I have all these types of messages that people send in Slack. There’s water cooler type chat. There’s people shelling their work. There’s people announcing things to their team. There’s synchronous discussions maybe around an incident, or something happening in production where we’re needed to go back and forth quickly, and there’s people requesting something from someone else, or maybe things blocking their work.”
I had this long list of things. I was like, “Okay, I need to kind of build up what’s similar about these, what’s different, how will the application know what types of message do I need to ask the user to tell the app what type of message this is, or can we infer it. Then, how does this translate into a priority and notifications?” It was sort of like a really central piece of the application. I felt like I couldn’t just start designing UI because it all kind of hinges on how each of these types of messages is treated. I think this was a really good candidate for whiteboarding, and yeah, I felt kind of like we’ve reignited some of the magic from the Drip days–it was really fun too and motivating. I would say, if you’re solo founder, I think it can be really valuable to find a friend that you have good rapport with, and can kind of brainstorm with, and bounce ideas off of, and just get there kind of two brains thinking about the problem, it can often lead to a really great result in the end.
Rob: Yeah. I was, I don’t know–concerned is probably not the right word–but going into it I was like, “Uh-oh, Derrick’s been thinking about this for months and I’m way out of that whole process. Are we going to be able to rekindle the old magic?” On Drip, we just used to whiteboard all the time, and came up with really good stuff–I thought. I use to say, with the two of us in the room, it’s like 10 times better. We catch all the edge cases and it’s like you said, two people holding the whole thing in the collective heads rather than one person trying to do it. There’s always a back and forth, there’s your sanity checking, there’s just the collaboration, it’s just night and day. If you’re standing in front of a whiteboard on your own, I think you and I really found how different that could be when we started collaborating right on Drip.
Derrick: Yeah, because you’re thinking about stuff, and you reach these points where my train of thought hits a dead end. If you don’t have someone there to kind of either pivot it or just pick up where you left off, then it can be a really frustrating process. You feel like you’re slogging through mud, and just having a pair there to help keep things moving. There were times when we would sit there and just kind of stare off in the space for a minute or two, and that’s okay too. It was a really fun exercise.
Rob: I agree. Being comfortable with silence too. We’ve talked about this when I came on your podcast. If you are going to whiteboard with someone, one or two people, I don’t know if we ever found a third who is as in our own heads as we are, as in the flow. We certainly had some good collaborators at Drip but you and I can sit there for five minutes with complete silence and not feel weird. I think that’s a big thing is you let the other person think and you’re thinking as well.
That’s the other thing I think with whiteboarding is oftentimes, if I try to do it on my own, I’ll get to a point and I just get stuck. I just can’t get past this and that’s when you will step in, and be like, “What if we think about this?” It’s like, “Oh.” Now you got us past it, and we’re still in the flow, and then we could finish the whole rest the hour. But I would have stopped there and just got hung up on it for a day, potentially. I think that’s a good point where you’re like, you could have gotten there eventually but it may have taken you weeks, and it was 90 minutes or whatever for us. That was super fun, by the way. I came out of that feeling great.
You came out of that then with kind of a mental model of message types, and not quite UI. I know we threw you why ideas around. We never sketched anything but it was always kind of hand wavy and talking as we’re like, “This alert to do this in this flow.” Then did you go straight from there into mockups or what was your next step? I know there was a vacation in there as well, right?
Derrick: Yeah, I did take a little vacation. I’ve been having this feeling of like a little bit of guilt as a product person that I should be getting some more concrete ideas in front of users to get feedback—sort of what I alluded to at the top of the show. I did try to take a stab at building some mockups. I’ve been working on them for a little while now. It’s taking a lot longer than I expected. I think part of that is that, we had some concrete ideas formed from the whiteboarding session but like we said, they’re not actual envisioning of where the pixels will sit, and how the product will actually form together. It was still a pretty fuzzy vision of it.
It felt like I had a lot more work out of my head than I actually did when I started to lay out UI elements. I think that’s probably true of any idea where it’s easy to sort of picture this thing that’s not actually real, and once you try to make a concrete, it’s like, “Oh, there’s actually a lot here to still think through and work through.” Perhaps actually, we could whiteboard on this again and maybe burst through another kind of wall, or I just need to keep slogging through it and returning back to it every so often, and incrementally building it out.
Rob: Yeah, that makes sense. It sounds like you hit—not a robot necessarily—but it’s a bit harder, a bit more challenging than you thought it would be. Mockups are often like that. You’re almost trying to invent something new and you have to thread a needle because you can’t be Slack but you can’t be email.
Derrick: Most of the difficulty that I’m having is centering around this inbox in Level. That’s one of the core pieces of the product is–it’s something that’s really missing from Slack–is that I want to have one place where I can come to and quickly see, in priority order, all the things that need my attention. Then I can step away for six hours, go into deep focus mode, come back, and feel confident that everything I need to see with relative urgency is it’s all laid out for me just as I want it.
Once you start kind of exploring, “Well, what happens when there’s 100 messages posted in this group and 50 in this group? How does the inbox mutate over times, that things don’t become overwhelming, and it doesn’t devolve into kind of the email inbox mess that so many people experience? How can I actually make good on the promise that I am threading the needle well between email and chat?” Once I overcome this, it’s going to be, hopefully, something really good and is really going to resonate with people. But until then, I don’t feel like I can just start showing these theoretical mockups where I just kind of hand wavy say, “Oh, it’ll be always manageable for you.” I want to give some proof that I’m actually on to something–some framework or some methodology for categorizing and organizing these messages.
Rob: Right. Because the challenge when you’re building something new is to validate your most risky hypothesis–that the ones that are most likely to fail where the risk is. Typically, it’s not the code itself unless you’re going to build—“I’m going to build an AI engine to predict stocks.” Well, it’s like, “Alright, that’s your first thing. Can you even do that?” But here, you know that you can write the code to make messages go in and out of a queue and come out of the things. There’s two risks left that I see. One is, can you design a UI that is novel enough, and does thread that needle between the two, and is 3X better or 5X better than the other experience for a certain group of people. Then the last risk will be, will people pay for it?
You validated that somewhat through building your email list and having this in-person conversations. I’m guessing once you have mockups or at some point you’re probably asked for whether it’s verbal commitments, or you may take money upfront, and I don’t think you’ve decided on when you’ll do that. That is a big issue—building the mockups and figuring out how is this flow going to work, and is it as novel enough and iterating on it until it is.
Derrick: I think this is arguably one of the most important pieces to work out because without this, the whole promise falls down. It’s one thing to just introduce threads for example. Slack has kind of arguably, poorly implemented threads. If I just implemented something that was just like, “Oh, everything’s a thread. That’s great but that still doesn’t solve the problem of not being a complete catastrophe when you step away from it for a long time.” It’s one of the critical moments, I would say.
Rob: Indeed. I want to switch up a little bit. We’ve talked a lot about the specifics of Level and your process of validating it, and getting the design going. I’m curious, this is in essence, kind of the third app or third startup really that you’re launching. I know that you launched a couple that came and went pretty quickly. But then, you had obviously, Drip with me. You did Codetree, codetree.com which is kind of project management that sits on top and you did that on the side. You sold that while we were, actually, right around the time that we sold Drip, you sold that if I recall.
Derrick: I sold that, we sold Drip, and I sold my house when we moved. I had three big sales.
Rob: That was crazy.
Derrick: Talk about massive liquidation.
Rob: I know. This really is, for all intents, your third act here. I’m curious if you think it’s easier this time around, is it harder, is there more pressure. Talk me through the emotional side or the mental side of where you’re at with it.
Derrick: I think it’s unique in that, with Drip, I started out as a contractor, and so I was gathering a paycheck. Then I went full time on it and then we had HitTail bankrolling our efforts a bit. It was a self-funded endeavor that was throwing off enough money for a least a decent paycheck so that I could live. Codetree was a side thing–that was nights and weekends. I was basically sacrificing my free time, but in exchange, it wasn’t really costing me actual money. Now, this is the first time that I’m really, as an adult, going off and saying like, “I’m not going to earn any salary or revenue for the whole time that I’m building this thing, or at least until I launch it.”
I think that that introduces, in itself, a bit of pressure that I’m trying to just like always mentally overcome that. Obviously, selling Drip and Codetree helped give me a little bit of runway so that I can afford to do this. That’s arguably the whole reason why we do this is so that we can afford to work on the things we want to work on. I’ve had to do some things like, set aside my living expenses for the next year, and figure out loosely what my budget’s going to look like, and then make transfers from this account to my checking account, and just say like, “I’m paying myself for the next year. I’m not allowed to think about money or stress about it.” It’s a work in progress but working on trying to do things like that to keep myself sane and not get too stressed out.
Rob: That makes sense. I find it funny you’re like, “This isn’t the first time as an adult,” because you were an adult all the time but now you’re married. You have real expenses. You live in a city where the cost of living is not super high. But Minneapolis is definitely akin to a California city that’s not L.A. or San Francisco. It was similar to Fresno which is not super cheap. It’s not like you’re going to live on $2,000 a month here. Depending on how you live and where you live, it’s a non-trivial sum.
I’m glad you did that. I know that you were stressed early on about burning some cash. As you said, the two exits you have helped bolster that, but I think your wife also distinctly gave you permission. She’s like, “You need to do this. You earned this.” Is that the phrasing? It was something like that. Like, “That’s what you did these other ones.”
Derrick: Exactly. This is not the time now to say, “Oh, I don’t know. Maybe I should keep a job and do this nights and weekends.” She’s like, “No, no. This is the whole reason why you sell companies.” I think she has a lot of wisdom in that.
Rob: Yeah, I would agree. Cool sir. Thanks for joining me today while Mike is out of town filling in our 399th episode.
Derrick: Oh my gosh. You’re one off from 400.
Rob: Isn’t that crazy? We’re going to figure something out to do that’s like a big bang, not just Mike and I talking about five ways to wrap or something. Can we do something different? We were the worst at that. We’ve looked back and I think 300 we may have just done a normal episode, that’s kind of a shame.
Derrick: Yeah, you got to take these milestones and squeeze some juice out of them.
Rob: Yup, yup, celebrate them a bit. Cool sir. Well, if folks want to keep up with you, they can hit level.app yeah and then derrickreimer.com. That’s where you blog now and again about your experience. You’re building Level for developers out there, you’re building it in Elixir and Phoenix.
Derrick: Elixir Phoenix is the web, framework web, kind of the rails of Elixir.
Rob: GraphQL…
Derrick: GraphQL is the API layer, and then Elm on the frontend, so the Elm translates into javascript. It’s a very shiny new tech stack for me. But I’m having a lot of fun building in it.
Rob: Well, I think for most people.
Derrick: Yeah, for most people. It’s a fairly proven technology but still on the newer side. I feel it’s really exciting. It’s predominantly centered around functional programming languages. Elixir and Elm, they’re very functional. It’s a bit different from what I’ve been doing. I’ve been writing Ruby for the past eight years, but yeah, I’m having a lot of fun for it. I’m hoping that the Level codebase can be a good example of like a full-scale SaaS application that’s kind of out there in the world for people to reference.
Rob: Yeah. I obviously don’t know any of the languages you’re using but you have such a good way of organizing our codebases, and your Read Me was super clean. I was like, “Ha, if I had a few extra hours this week, I would just run these commands and try to see if I get this thing right.” It was kind of fun. It was good to see it and then get out there. Cool. Well, thanks again for coming on the show.
Derrick: Yeah, thanks for having me.
Rob: I think that wraps us up for today. If you have a question for us, call our voicemail number at 888-801-9690, email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt, it’s used under Creative Commons. Subscribe to us in iTunes by searching for Startups. Visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
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 Rob.
Derrick: I’m Derrick.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. How are you this week sir?
Derrick: Well, I am deep in the process right now of building out some mockups of my new app called Level, to hopefully get some more concrete things in front of some of my early access list folks.
Rob: That makes sense. If folks are interested just right from the top, level.app is the domain name. You have a really tight landing page. If you’re listening to this and you want to see–this is maybe 400 to 500 words of text–and it is on point. You’ve got the headings, you can skim it, at the bottom is fomo, the reserve your handle today, you can claim a little slice of real estate on level.app. Then you have the social proof, right? 3,542 people who have reserved their handle including me, and so if your name is Rob, I’m sorry but I got level.app/rob. How’s the landing page working for you?
Derrick: It’s working really well. That is actually a live query now showing the current count. It works surprisingly well. I wasn’t sure exactly what to expect when I first built that but I figured that the scarcity play would be effective. I and had a few conversations with folks at MicroConf too, about this. I saw their eyes light up, and they’re like, “Oh yeah, make sure to let me know before you do that.”
Rob: That’s when you know you’re on to something.
Derrick: This is a good sign. They can appreciate it from a from a marketing ploy and then they’re like, this kind of instinct of, “By the way, I really want to know when you do that so I can get mine.”
Rob: For those listening, if you don’t know what Level is, it’s an alternative to real time chat designed for the software development workflow. I just pulled that right from your landing page but it’s ostensibly a competitor to Slack but a much less interruptive experience. More asynchronous, not the blinking red dot, I guess it’s not blinking in Slack but everything’s synchronous by default. In Slack and you’re going for the opposite in essence, and this stems from?
Derrick: From really my experience with Slack. My first time using Slack was with Drip when we were a team of like two or three. It was not painful at all at that stage, but gradually, as our team size grew, it started to get a little bit more cumbersome. I remember actually, the first time I was in a “big Slack,” team was in our building back in Fresno. That was like an early warning that, “Hmm, I think this maybe doesn’t scale so well as your team grows.”
The building chat was full of just folks tossing around various pieces of information, most of them not urgent but often pushed through with an @channel or an @here, “Hey, there’s some cookies in the in the kitchen.” And it’s like, “Do I really need to get pulled out a flow to hear that piece of information?” That was like an early sign that Slack seems kind of broken especially when there’s a lot of people chatting back and forth.
That experience was reinforced after we were acquired by Leadpages and we joined the broader company wide chat. There was about 150 people in there, and a really similar experience where a lot of well-intentioned people who weren’t trying to interrupt each other, but the tool just kind of failed as in essence and made it really hard not to accidentally interrupt people’s flow. Level is really kind of a reaction to that problem. I just observed this over the course of years and I just couldn’t get it out of my head, so now I’m building my take at a solution.
Rob: Yup. You wrote a manifesto a few months back and published it on your blog derrickreimer.com. I see now you’ve you republished it at level.app/manifesto. In essence, you’re describing the pain points you’ve just indicated—of the interruptive stuff in your story.
Derrick: Yeah. The manifesto was kind of step one actually for introducing the idea to the world. I didn’t really waste any time after moving on from Drip. I think I’ve published it on my last day at Drip, is when it kind of soft launched. Then the following Monday, I really did a big push in the manifesto. I was just sort of itching to get this out into the world. That promotion was probably, I think it worked really well because it sort of made a splash, it made a bold statement. I was able to gather quite a few email addresses off of that. I think it was maybe 300 to 400 within the first couple of days, and so that gave me a nice launching pad of folks to start engaging with. Obviously, people sharing it around on social helps too. I think that was a really effective strategy for making the first intro to the world.
Rob: II know you had kind of been noodling on it for awhile just in the background in your head and because we’re faced with the limitations of Slack everyday working on the Drip team, and you left Drip was it February of this year or was it March? I guess it was three or four months ago?
Derrick: Yeah, three or four months ago. Beginning of March, yeah.
Rob: Because that’s the more important thing for someone who’s listening to this two years from now, they don’t care what month it is. You hit the ground running. When you published the manifesto, I remember you wrote it up in a Google doc and then you had a couple of friends come in and edit and make suggestions and all that stuff, and then you published. What is it Twitter that gave you most of your sign ups? Because I remember, it didn’t go up in Hacker News, right? It got a few or something but it didn’t make it to the front page which I was frankly surprised by. How do you think you got those 300 or 400 sign up for someone else who’s thinking about doing it?
Derrick: It was predominantly Twitter. I think that was effective particularly for me because this is a product that’s marketed towards developers, and that’s kind of the premier place where designer, developer types hang out online. I think that was where most of my strategy was focused was trying to get people to retweet it, to like it, to share it. I did assemble a list of folks who are in my inner circle, friends of mine who also have a decent following on Twitter and did manual reach out to those folks just to tell them, “Hey, I’m going to be sharing this thing, if you wouldn’t mind, could you please tweet it out to your followers?”
Most people are really eager to help out. I think it’s where a lot of the lift came from. I did actually try running some Twitter ads that day. I didn’t really tuned the audience too much. I just let Twitter auto choose that by hitting the promote button. That drove probably 30% of the impressions for it but zero activity. I would say majority, I think I put in maybe $100 into that just to see if this is going to help provide any additional lift. I think a majority of it was really organic shares on social. I also emailed my own personal newsletter list which is pretty small just like a couple hundred folks on there at the time. I think I generated some shares off of that as well.
Rob: I could imagine that. I remember there were some comments, I think it was on Twitter but my favorite comments are always the ones that completely missed the point of an article. I would spend eight hours writing something. I know you spent a lot of time writing this, and then you have a one sentence that has something that is debatably, maybe factual, and someone rips into that, and you’re like, “Dude, that has nothing to do with the point.” There was one of these sentences we’re talking about, “Yeah, once we started using Slack, it was great. This is not news now, but five years ago, it was pretty groundbreaking.” There were somebody like, “Well, 12 years ago or 15 years ago, I was using IRC.” That’s not really the point, what are we even talking about right? Did you did you have much of that or was it the minority?
Derrick: It was very much the minority. I think it was on Reddit actually, and maybe I sort of attracted some of that flaming because I did post my own manifesto on there which I know is a little bit against the way you’re supposed to use the service. I was like, “Oh, what the heck. I’ll just post it in the developer subletter or whatever.” Some people took issue with the timing of when Chat was invented. The whole notion of arguing that this whole argument is invalid because I got the year wrong on when it came to the forefront, it was just laughable.
Rob: Yeah, it is what it is. Luckily, that tends to be the minority thing but it does always side track. That’s actually one of the reason that I completely disabled comments on my blog. I got tired of those conversations going on. There were good comments, and then just the ones that were irritating, or ill-informed, or just obviously looking to nitpick stuff. That’s just not helpful. That’s been my own personal journey with that.
You posted the manifesto, you got a few hundred emails, and you’re on the Art of Product Podcast with Ben Orenstein, mutual friend of ours, and you’ve been talking about your process through that, so I’m sure that that has helped get other developers interested in what you’re up to and probably slowly built your list over time. Once you had that list, what were your next steps? Because I know that you and I had talked about this a while back. This is a very ambitious project, and it’s either going to be awesome, or you’re just going to get smoked by Slack. They’re just going to stomp you, or not even notice you, and no one’s going to switch because of the high switching costs. It’s one or the other, and you’re fully aware of that upfront. What were your early steps of trying to validate the idea a bit more than just positing, “Hey, I can build a better Slack.” It’s like, “Okay, step two is…” What are you up to next?
Derrick: I was definitely leery of making the classic mistake of taking a little bit of early indication that we’re on to something, and just running with it and not talking to anybody—which is a mistake that I’ve made before in the past—and so many folks do. I really wanted to air on the side of having too many conversations with people to try to asses out is this, “Am I on the right track with this? Is this actually going to sell well in the market?”
I think it was within a few weeks after launching the manifesto, I sent an email out to the list. I decided to email the entire list which looking back was probably should have started with a smaller slice just to gauge what the response rate would be. But I basically emailed out and said, “Hey, thanks so much for signing up. I want to have a conversation with you and hear more about what your pain points have been with real time chat in the workplace. At this point, I’m not trying to propose any solution to you beyond what I’m kind of alluding to in the manifesto. I really just want to hear what particularly about real time chat isn’t working for you enough that you gave me your email address.”
I sent this out and I sent a Calendly link with that so that people could book a 20-minute slot on my calendar. I kind of reserved it to afternoons only, thankfully, to reserve the mornings for productive time. I think I got around 40 people booking time on my calendar.
Rob: Dope. That’s both really good news and also like, “Oops,” Were they 20 minutes each? What was that? 16 hours?
Derrick: Something like that. It turned out to be basically three and a half to four weeks of afternoons booked pretty solid. At first I was like, “Oh boy, this is a lot.” But I think, at the time, it’s early enough, I’m like, “This is probably where my time is best spent. Talking to people and hearing in their words what problems they’re having.” That did help guide the way I would thought about the product. I would say influenced where I thought the biggest emphasis should be.
I wasn’t sure if the emphasis should be on reducing interruptions, or just organizing content better, or should I be focused around really optimizing for asynchronous, where are the pain points actually. It helps clarify my thinking. One of the things that we’ve talked about a lot that helped in the early days of Drip was just getting feedback from people and looking for patterns. What are the things that we’re hearing over and over again, and those are likely to be things that we should be paying attention to. I did spot some of those themes and patterns. Looking back, it was helpful to have a decent sample size. If I’d only talked to 10 or 15 people, then that may not have been enough to spot patterns. I think it was good overall.
Rob: Yeah, I know it was a lot of time. It seems like you were learning quite a bit as you were going, and at that time, you didn’t have any mockups right? You really were just talking through how would this sound, or how would you use this, or that kind of stuff.
Derrick: Yeah. I tried hard not to actually tip my hand on what I was thinking. I just wanted to hear unbiased people’s take on like, “You know, if there’s one thing I could change about Slack.” or I ask questions like, “Do you use Slack threads and what do you think about them?” Or, “Do you use search heavily in Slack?” Just to get an idea of like how much are people relying on the tool to be their source of the repository of historical information, versus how much is just ephemeral conversations that get transferred into project management tools. There was a lot of things I was just trying to learn and SaaS out from people without tipping my hand too much on my thoughts of a solution.
Rob: Right. In the back your mind, obviously, you know that you need some kind of differentiation, pretty strong differentiation from Slack because everyone’s going to immediately compare you to Slack. One thing you’ve chosen is to niche down to developers, right? You know that interruptions piss developers off. It breaks your flow. You and I have experienced this first hand as our development team grew.
I used to tell people snooze your Slack for two hours, do not disturb it during this time, just try to get focus so that we can continue ship code at high velocity. You have that but there was there was one other thing, that early on, you made a decision to do that is potentially risky but it’s another differentiator. You want to talk a little bit about that?
Derrick: Sure. You and I noodled this little bit when I was just in the idea stage, and I think we were having drinks one day and I was like, “Alright. I think I figured out the one thing that’s going to really make Level stand out. Let’s open source it.” You spit your drink all over my face. There are examples of this happening, there’s Discourse, there’s Ghost, there’s GitLab, so there are companies that are already doing this.
Rob: Not in the chat space, those are in other spaces but it’s a mockup.
Derrick: Yeah. I will say there are other open source chat tools but I don’t think they’re really making any kind of headway as a business. They’re just open source only. The model of open source, the core code base, but then charge people for hosted version of the service is basically the model that I’m going for. The thinking behind it is that one, since this product is marketed towards developers, a lot of developers sort of appreciate when things are open source, when they can look at the source and see what’s happening with their data, and just sort of have that transparency, and also be able to download it, and stand up a cluster of servers, and manage it themselves if they really want to do that.
I’m sort of banking on the fact that most companies that have sufficient budget to pay for a tool aren’t going to want to go through the hassle of managing their own servers, and patching them, and keeping them up to date and all that kind of stuff. They’re just going to want to pay me for the hosted version. But if you don’t have the budget or if you’re bootstrapped, and you’re really scrappy, then by all means, download it, stand it up on your serve, and when you’re ready, you can transfer the data into the hosted service.
Rob: This was, in essence, around that you and I kept talking about, how you can have a free plan because I think you need one. We both thought you need one because that’s kind of part of the course in the space, and how are you going to do that as a bootstrapper, and not get killed by hosting costs, or not get killed by support and all that, and this is a way to do two things. That’s pretty ingenious if it works, and it’s, like you said, developers or more tech-oriented folks, this is in essence the free plan in addition to the benefit of it being open source which most people like, and then they can pay you for whatever the hosting, and the support, and as an almost SaaS app.
Derrick: Yeah, exactly. It’s not only the free plan but it also kind of paves the way for potentially offering on-prem if I’m sort of optimizing for the ability to setup the entire service from the ground up easily as opposed to just running a SaaS app or maybe you kind of cobble together your own hosting situation that’s not easily replicable. I think building it in this way paves the path for companies that don’t want to run a hosted service, or trust another company to run a hosted service for them, they can download it, and run it inside their firewall too.
Rob: Yeah, and that’s really interesting. Can you do that with Slack?
Derrick: No, I don’t think so.
Rob: There’s no on-prem version as far as I know. That could be an interesting enterprise play. I know that wouldn’t necessarily be the market you go after first, but if you get traction, you get name brand, and people are like, “Hey, not only is this open sourced–” which big companies tend to. They either hate it or love it, but if they understand it they’ll love it, and then like you said, you can do the on-prem play, and those are super expensive, that would be a really nice, high-end revenue source for you if you’re willing to put up with the headaches.
Derrick: Right. That probably would be down the line where I have traction, and a team, and I could kind of establish a team to run that end without me having to do all the sales and all that kind of stuff.
Rob: Totally, yeah. After you got all of the information from those Skype calls, I know you and I then met. I know you did a bunch of thinking on your own for a couple of weeks and then you were at a point and you said, “You know what, I have thoughts, it’s not ready to go into mockups yet. It’s not ready to build a UI. I have a bunch of ideas about different message types and how to structure these, let’s do wide port session.” And so you and I met at the local library, actually, in a nice little room, and you wanted to talk about I think, the value of that, or what that felt like and just the point of doing that.
Derrick: A lot of times there are these key points when you’re designing products where it’s like, there’s a lot of information scattered about and kind of coalescing that information into something actually tangible. It’s hard to hold that all in one person’s head, I feel like. I tried doing a little bit of solo whiteboarding, and I jotted down in a notebook, and I probably could have arrived at similar conclusions, but I think it would have taken a lot longer and probably wouldn’t have been quite as crisp and clear.
We whiteboarded for probably an hour and a half or two hours. I think we came away with some really concrete takeaways. It kind of started with like, “Okay, I have all these types of messages that people send in Slack. There’s water cooler type chat. There’s people shelling their work. There’s people announcing things to their team. There’s synchronous discussions maybe around an incident, or something happening in production where we’re needed to go back and forth quickly, and there’s people requesting something from someone else, or maybe things blocking their work.”
I had this long list of things. I was like, “Okay, I need to kind of build up what’s similar about these, what’s different, how will the application know what types of message do I need to ask the user to tell the app what type of message this is, or can we infer it. Then, how does this translate into a priority and notifications?” It was sort of like a really central piece of the application. I felt like I couldn’t just start designing UI because it all kind of hinges on how each of these types of messages is treated. I think this was a really good candidate for whiteboarding, and yeah, I felt kind of like we’ve reignited some of the magic from the Drip days–it was really fun too and motivating. I would say, if you’re solo founder, I think it can be really valuable to find a friend that you have good rapport with, and can kind of brainstorm with, and bounce ideas off of, and just get there kind of two brains thinking about the problem, it can often lead to a really great result in the end.
Rob: Yeah. I was, I don’t know–concerned is probably not the right word–but going into it I was like, “Uh-oh, Derrick’s been thinking about this for months and I’m way out of that whole process. Are we going to be able to rekindle the old magic?” On Drip, we just used to whiteboard all the time, and came up with really good stuff–I thought. I use to say, with the two of us in the room, it’s like 10 times better. We catch all the edge cases and it’s like you said, two people holding the whole thing in the collective heads rather than one person trying to do it. There’s always a back and forth, there’s your sanity checking, there’s just the collaboration, it’s just night and day. If you’re standing in front of a whiteboard on your own, I think you and I really found how different that could be when we started collaborating right on Drip.
Derrick: Yeah, because you’re thinking about stuff, and you reach these points where my train of thought hits a dead end. If you don’t have someone there to kind of either pivot it or just pick up where you left off, then it can be a really frustrating process. You feel like you’re slogging through mud, and just having a pair there to help keep things moving. There were times when we would sit there and just kind of stare off in the space for a minute or two, and that’s okay too. It was a really fun exercise.
Rob: I agree. Being comfortable with silence too. We’ve talked about this when I came on your podcast. If you are going to whiteboard with someone, one or two people, I don’t know if we ever found a third who is as in our own heads as we are, as in the flow. We certainly had some good collaborators at Drip but you and I can sit there for five minutes with complete silence and not feel weird. I think that’s a big thing is you let the other person think and you’re thinking as well.
That’s the other thing I think with whiteboarding is oftentimes, if I try to do it on my own, I’ll get to a point and I just get stuck. I just can’t get past this and that’s when you will step in, and be like, “What if we think about this?” It’s like, “Oh.” Now you got us past it, and we’re still in the flow, and then we could finish the whole rest the hour. But I would have stopped there and just got hung up on it for a day, potentially. I think that’s a good point where you’re like, you could have gotten there eventually but it may have taken you weeks, and it was 90 minutes or whatever for us. That was super fun, by the way. I came out of that feeling great.
You came out of that then with kind of a mental model of message types, and not quite UI. I know we threw you why ideas around. We never sketched anything but it was always kind of hand wavy and talking as we’re like, “This alert to do this in this flow.” Then did you go straight from there into mockups or what was your next step? I know there was a vacation in there as well, right?
Derrick: Yeah, I did take a little vacation. I’ve been having this feeling of like a little bit of guilt as a product person that I should be getting some more concrete ideas in front of users to get feedback—sort of what I alluded to at the top of the show. I did try to take a stab at building some mockups. I’ve been working on them for a little while now. It’s taking a lot longer than I expected. I think part of that is that, we had some concrete ideas formed from the whiteboarding session but like we said, they’re not actual envisioning of where the pixels will sit, and how the product will actually form together. It was still a pretty fuzzy vision of it.
It felt like I had a lot more work out of my head than I actually did when I started to lay out UI elements. I think that’s probably true of any idea where it’s easy to sort of picture this thing that’s not actually real, and once you try to make a concrete, it’s like, “Oh, there’s actually a lot here to still think through and work through.” Perhaps actually, we could whiteboard on this again and maybe burst through another kind of wall, or I just need to keep slogging through it and returning back to it every so often, and incrementally building it out.
Rob: Yeah, that makes sense. It sounds like you hit—not a robot necessarily—but it’s a bit harder, a bit more challenging than you thought it would be. Mockups are often like that. You’re almost trying to invent something new and you have to thread a needle because you can’t be Slack but you can’t be email.
Derrick: Most of the difficulty that I’m having is centering around this inbox in Level. That’s one of the core pieces of the product is–it’s something that’s really missing from Slack–is that I want to have one place where I can come to and quickly see, in priority order, all the things that need my attention. Then I can step away for six hours, go into deep focus mode, come back, and feel confident that everything I need to see with relative urgency is it’s all laid out for me just as I want it.
Once you start kind of exploring, “Well, what happens when there’s 100 messages posted in this group and 50 in this group? How does the inbox mutate over times, that things don’t become overwhelming, and it doesn’t devolve into kind of the email inbox mess that so many people experience? How can I actually make good on the promise that I am threading the needle well between email and chat?” Once I overcome this, it’s going to be, hopefully, something really good and is really going to resonate with people. But until then, I don’t feel like I can just start showing these theoretical mockups where I just kind of hand wavy say, “Oh, it’ll be always manageable for you.” I want to give some proof that I’m actually on to something–some framework or some methodology for categorizing and organizing these messages.
Rob: Right. Because the challenge when you’re building something new is to validate your most risky hypothesis–that the ones that are most likely to fail where the risk is. Typically, it’s not the code itself unless you’re going to build—“I’m going to build an AI engine to predict stocks.” Well, it’s like, “Alright, that’s your first thing. Can you even do that?” But here, you know that you can write the code to make messages go in and out of a queue and come out of the things. There’s two risks left that I see. One is, can you design a UI that is novel enough, and does thread that needle between the two, and is 3X better or 5X better than the other experience for a certain group of people. Then the last risk will be, will people pay for it?
You validated that somewhat through building your email list and having this in-person conversations. I’m guessing once you have mockups or at some point you’re probably asked for whether it’s verbal commitments, or you may take money upfront, and I don’t think you’ve decided on when you’ll do that. That is a big issue—building the mockups and figuring out how is this flow going to work, and is it as novel enough and iterating on it until it is.
Derrick: I think this is arguably one of the most important pieces to work out because without this, the whole promise falls down. It’s one thing to just introduce threads for example. Slack has kind of arguably, poorly implemented threads. If I just implemented something that was just like, “Oh, everything’s a thread. That’s great but that still doesn’t solve the problem of not being a complete catastrophe when you step away from it for a long time.” It’s one of the critical moments, I would say.
Rob: Indeed. I want to switch up a little bit. We’ve talked a lot about the specifics of Level and your process of validating it, and getting the design going. I’m curious, this is in essence, kind of the third app or third startup really that you’re launching. I know that you launched a couple that came and went pretty quickly. But then, you had obviously, Drip with me. You did Codetree, codetree.com which is kind of project management that sits on top and you did that on the side. You sold that while we were, actually, right around the time that we sold Drip, you sold that if I recall.
Derrick: I sold that, we sold Drip, and I sold my house when we moved. I had three big sales.
Rob: That was crazy.
Derrick: Talk about massive liquidation.
Rob: I know. This really is, for all intents, your third act here. I’m curious if you think it’s easier this time around, is it harder, is there more pressure. Talk me through the emotional side or the mental side of where you’re at with it.
Derrick: I think it’s unique in that, with Drip, I started out as a contractor, and so I was gathering a paycheck. Then I went full time on it and then we had HitTail bankrolling our efforts a bit. It was a self-funded endeavor that was throwing off enough money for a least a decent paycheck so that I could live. Codetree was a side thing–that was nights and weekends. I was basically sacrificing my free time, but in exchange, it wasn’t really costing me actual money. Now, this is the first time that I’m really, as an adult, going off and saying like, “I’m not going to earn any salary or revenue for the whole time that I’m building this thing, or at least until I launch it.”
I think that that introduces, in itself, a bit of pressure that I’m trying to just like always mentally overcome that. Obviously, selling Drip and Codetree helped give me a little bit of runway so that I can afford to do this. That’s arguably the whole reason why we do this is so that we can afford to work on the things we want to work on. I’ve had to do some things like, set aside my living expenses for the next year, and figure out loosely what my budget’s going to look like, and then make transfers from this account to my checking account, and just say like, “I’m paying myself for the next year. I’m not allowed to think about money or stress about it.” It’s a work in progress but working on trying to do things like that to keep myself sane and not get too stressed out.
Rob: That makes sense. I find it funny you’re like, “This isn’t the first time as an adult,” because you were an adult all the time but now you’re married. You have real expenses. You live in a city where the cost of living is not super high. But Minneapolis is definitely akin to a California city that’s not L.A. or San Francisco. It was similar to Fresno which is not super cheap. It’s not like you’re going to live on $2,000 a month here. Depending on how you live and where you live, it’s a non-trivial sum.
I’m glad you did that. I know that you were stressed early on about burning some cash. As you said, the two exits you have helped bolster that, but I think your wife also distinctly gave you permission. She’s like, “You need to do this. You earned this.” Is that the phrasing? It was something like that. Like, “That’s what you did these other ones.”
Derrick: Exactly. This is not the time now to say, “Oh, I don’t know. Maybe I should keep a job and do this nights and weekends.” She’s like, “No, no. This is the whole reason why you sell companies.” I think she has a lot of wisdom in that.
Rob: Yeah, I would agree. Cool sir. Thanks for joining me today while Mike is out of town filling in our 399th episode.
Derrick: Oh my gosh. You’re one off from 400.
Rob: Isn’t that crazy? We’re going to figure something out to do that’s like a big bang, not just Mike and I talking about five ways to wrap or something. Can we do something different? We were the worst at that. We’ve looked back and I think 300 we may have just done a normal episode, that’s kind of a shame.
Derrick: Yeah, you got to take these milestones and squeeze some juice out of them.
Rob: Yup, yup, celebrate them a bit. Cool sir. Well, if folks want to keep up with you, they can hit level.app yeah and then derrickreimer.com. That’s where you blog now and again about your experience. You’re building Level for developers out there, you’re building it in Elixir and Phoenix.
Derrick: Elixir Phoenix is the web, framework web, kind of the rails of Elixir.
Rob: GraphQL…
Derrick: GraphQL is the API layer, and then Elm on the frontend, so the Elm translates into javascript. It’s a very shiny new tech stack for me. But I’m having a lot of fun building in it.
Rob: Well, I think for most people.
Derrick: Yeah, for most people. It’s a fairly proven technology but still on the newer side. I feel it’s really exciting. It’s predominantly centered around functional programming languages. Elixir and Elm, they’re very functional. It’s a bit different from what I’ve been doing. I’ve been writing Ruby for the past eight years, but yeah, I’m having a lot of fun for it. I’m hoping that the Level codebase can be a good example of like a full-scale SaaS application that’s kind of out there in the world for people to reference.
Rob: Yeah. I obviously don’t know any of the languages you’re using but you have such a good way of organizing our codebases, and your Read Me was super clean. I was like, “Ha, if I had a few extra hours this week, I would just run these commands and try to see if I get this thing right.” It was kind of fun. It was good to see it and then get out there. Cool. Well, thanks again for coming on the show.
Derrick: Yeah, thanks for having me.
Rob: I think that wraps us up for today. If you have a question for us, call our voicemail number at 888-801-9690, email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt, it’s used under Creative Commons. Subscribe to us in iTunes by searching for Startups. Visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 398 | SaaS Marketing Lessons You’ll Wish You’d Learned Sooner
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about SaaS marketing lessons you’ll wish you’d learned sooner. Based on an article on karolakarlson.com they break the list down to 9 key lessons including growth plans, mission statements, tracking metrics and more.
Items mentioned in this episode:
Mike: In this episode of Startups for the Rest of Us, Rob and I are going to be talking about SaaS marketing lessons you’ll wish you’d learn sooner. This is Startups for the Rest of Us, Episode 398. Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs to be awesome building, launching and growing software products, whether you put your first product or you’re just thinking about it. I’m Mike.
Rob: I’m Rob.
Mike: We’re here to share experiences to help you avoid the same mistakes we’ve made. What’s the word of this week, Rob?
Rob: The word this week is a little bit of wrestling with Google and they’re indexing in webmaster tools because I 301 redirected my entire old blog site, Software by Rob, and I got a new domain, Rob Walling, and I 301’d all that and got it all set up. There’s just always more complexity than you think there’s going to be. I had this seven-step checklist that I went through and, of course, parts of it went wrong and parts of it got cached while I was in the middle of troubleshooting and so you don’t know what the real version is.
I’m literally like–I texted Derek and I’m like, “Can you hit this URL and let me know what you see?” even though I flushed my cash and all that. It was just giving me–from different browsers, it was giving me different results. It wasn’t that big of a deal but then the redirect was fine, everything’s been working and then the Google indexing has really not started. It probably took–it’s been almost 10 days, maybe 14 days, and it’s just now picking up on the new domain. I’m looking at the search analytics and just starting to see 50 total clicks. It’s literally like one day’s worth of clicks or less than that, actually, has started to pick up.
Mike: The hard part about that is that, because Google has different Google-plexes all over the place, different people are going to be different ones so they’re not–the different indexes are in different places, which kind of sucks.
Rob: Yeah, I agree. This is just–it’s like try not to redirect stuff. You can totally do it and not lose traffic in the long term but, in the short term, it’s kind of always a bit more work and there’s always these loose ends that happen. By no means was it a disaster or anything; it was kind of a fun little thing to, I don’t know, stay busy with, but I’ll just be happy when everything’s moved over. Again, the whole site’s functional if you go to Rob Walling. You can go look around and everything’s there but, now, I’m just trying to get Google to make all the Google search results look use Rob Walling instead of the old site. How about you? What’s going on?
Mike: I was looking through some of the comments on some of our older episodes and there was one or a couple of episodes ago where we had talked about the moniker of “the Rest of Us” and how we should have trademarked that or something like that, not that we probably would have gone that road. Glen Bennett wrote and said that there was an Apple ad from the ’80s where they called it “The Computer for the Rest of Us” so we were beat by quite a lot on that.
Rob: Yeah, and that’s been a part of the English language for, I guess, 50 years. I have no idea what the first use of it was but I definitely heard it growing up, just people talking about that.
Mike: Yup. Yeah, so we definitely missed the door on that one.
Rob: Yeah, for sure. There were some other pretty interesting comments. There’s a comment from Rasmus on Episode 389, which was titled Pro Tips for Attending Conferences, and he says something else he does is go to the gym in the morning. It really makes your mind and body ready to listen and learn all day. That is something we forgot to say because I actually try to go to the gym when I’m at conferences, and it’s especially easy at MicroConf because of our 10:00 AM start time. When we used to start at 9:00, I never had time because I was too tired. That is something that I recommend, even to go for a short run, even if it’s only 15 minutes or something. I like getting up and getting out.
Another couple of comments on Episode 395, which was 20 Podcasts We Like, we had two more that requested. Kristoff Engelhart recommended How I Built This by Guy Raz. That’s at NPR podcast, I believe, and he said he specifically liked the episode with the Collision Brothers from Stripe, the guy from Home Depot and the one with the Founders of Ben and Jerry’s. I’ve listened to a few episodes of How I Built This and I liked it. I think I struggled with the fact there were some–the signal to noise for me was a bit low because it’s an NPR show and so it’s tailored to the masses and I always struggle to consume startup stuff made for the masses. Honestly, it’s a really well-produced show if you’re interested. It’s just in interview format, basically, and it’s as you would expect from NPR.
The last comment was from the same episode from Abdu, and he says, “I find it odd you didn’t mention Mixergy. Even Rob was a guest on it.” Yeah, I’ve been a guest on Mixergy six times, I think–five or six times–but it’s not something that I currently have in my rotation. I definitely used to listen to it but the volume of shows that comes out–it just hasn’t been on my radar for a while. Totally, I still see Andrew at conferences and every once and a while. When I hear that someone I know or there’s a particularly interesting interview on Mixergy, I absolutely download it and listen to it, but it’s not on my everyday podcast subscription feed anymore.
Again, that’s mostly due to the sheer volume of shows that come out of there and the interview format. Andrew was one of the early pioneers of that. They were folks who were doing startup interviews but he came on the scene and really revolutionized that, way before John Lee Dumas and several other folks who’ve done it since then. I have a ton of respect for what he’s built and, obviously, have enjoyed my conversations on Mixergy with him. I, in all honesty, listen to less interview shows than I used to. If you do look at that list of 20, there are very few truly just all interview shows. Even like This Week in Startups that we just mentioned, they do some interviews but I personally skip many of those and I listen to a lot more to the news round tables and even some of the pitching ones.
Mike: Going back to your blog redesign that you did for your website, there’s a missed business opportunity in there where somebody could have acquired Rob Walling and sold it to you.
Rob: Someone did. I bought it from another guy named Rob Walling.
Mike: Really?
Rob: Yeah, I bought it a couple of months ago.
Mike: That’s different. If you bought it from another Rob Walling whereas if you would have bought it from Mike Taber, then that would have been different.
Rob: I know. It was funny. When I emailed him, the guy was like, “Whoa, this is kind of weird.” He’s like, “I thought it was a trick email.” I was like, “No, this is actually another Rob Walling.” We had different middle names, of course, but he was funny. He said, “Well, I can tell by your name that you are a scholarly gentleman of great intelligence and manners,” or something. I was like, “Well done, Sir. This is going to be fun.” Just the negotiation and buying it from him was kind of fun.
Mike: That reminds me of when I was at Home Depot a couple of years ago. They paged Mike Taber over the intercom and so, of course, I go come to find out there’s a guy who works there named Mike Taber who lives nearby. It was interesting to meet another Mike Taber.
Rob: Yeah, totally. Very cool. What are we talking about today?
Mike: Today, we are going to be going over a blog article written by Karola Karlson, and it’s over at karolakarlson.com and we’ll link that up in the show notes. It is about SaaS marketing lessons. The title of this episode is SaaS Marketing Lessons You’ll Wish You’d Learn Sooner and what I did was I kind of consolidated a bunch of these things because there’s some things in here that overlap a lot with other topics, and there’s 35 different items in this particular blog article. We’re going to condense that down a little bit. I’m going to talk more focused about some of these different pieces where it applies specifically to the types of people who are listening to this show.
Rob: We have about 9, it looks like, down from 35.
Mike: 9 SaaS marketing lessons.
Rob: They’re making a listicle!
Mike: The first one is about finding your high expectation customer, and there’s another link that we’ll add into the show notes because there is a link over to a blog article that somebody else wrote all about finding what your high expectation customer is, and the basic definition of that is the type of customer who has very high expectations for your product and they know exactly what it is that they want to do. There’s a series of questions that you can answer very specifically about them. For example, “Who is it that needs the product? What does it do for them? How do they feel about it? What’s the true benefit for them?” and, “Will your product exceed their expectations?”
If all those criteria are met, then you have what’s called a high expectation customer because they know exactly what it is that they want and they need, and their bar is very high. If you can exceed that bar, then you’re going to satisfy a much larger number of customers. Early on, it’s going to be very difficult for you to meet that especially because they’re going to be an advanced customer; they’re not going to be an early adopter. Assuming that you can meet that bar for that customer, then you’re going to be able to sell to a much larger pool of people. This is going to help you to grow the business a lot just because of that much larger pool, and knowing those numbers helps you in a great number of other ways which we’ll talk about later in this episode.
Rob: Right, and when they define the high expectation customer, they say it’s the most discerning person within your target demographic. It’s someone who will acknowledge and enjoy your product or service for its greatest benefit, and that person needs to be someone who others aspire to emulate because they see them as clever, judicious and insightful.
Mike: The second lesson is to not sell to everyone. I think, generally speaking, this is obvious advice that’s repeated a lot by different people on the startups basis, but the real question is, “Why is this repeated so often?” It’s because it tells you who not to sell to, who should you not be targeting for your SaaS or your products, or your service. The real benefit of doing that is that, if you can get rid of those people in certain marketing channels or you avoid marketing to them because they’re not a great fit for your product, either that could be for a variety of reasons; either they churn out a lot or it’s an ancillary benefit to them, they’re not really looking for your products.
There’s all these different reasons why they might not be your ideal customer but, by removing them from the pool of people that you’re actively marketing to, then it’s going to yield a lot better ROI across all of your marketing channels and it allows you to focus much more on the types of people who are a good fit for your product versus the ones that are not as good a fit and you’re going to have to do a lot more work in order to sell them on your product.
Rob: Yeah, and, in the early days, this is all you can do, right? Especially if you’re bootstrapped but even when you’re funded. Five years ago, I thought about a venture-funded company and thought, “Man, they have infinite resources and they can just sell to everyone.” Then, of course, I worked inside Leadpages for 20 months and realized that, “No, even there, there are these massive trade offs. They just can’t hire enough good people.” Even with really high budgets, they can’t hire enough good people to sell to everyone.
I think your point about, “Yes, we hear this over and over,” is well-taken, but why do we hear it? It’s because people make this mistake over, and over, and over. In your early days, it’s really easy that anyone who gives you a dollar, you want to get the product to them because you want to maximize your revenue because every dollar means you can market more. The problem with that is you can quickly, especially if you’re a software product, go off the rails with folks who are requesting things that take you away from your core vision or the core vision that’s going to meet the needs of most people versus someone, again–if you’re selling to internet marketers or the SaaS founders and then a photographer who comes in, he can pay $1000.00 a year but he’s going to have totally different requests.
I went through this exact thing early on with Drip where we just got a request that was like, “We don’t really want to build that and that doesn’t help anybody else,” and so then that person was disappointed and they didn’t love the product. We eventually parted ways but it was a lesson I think each of us learns as we go, is just say no fairly frequently. If you don’t think they’re going to get value of it or they’re not in your core market, I would err on the side of saying no in the early days.
Mike: That kind of leads a little bit into the next one, which is to have a mission statement. I think, most of the time, this is probably not a great place to focus a lot of your time and effort but the reality is that when you have a mission statement about what it is that you are trying to do and what you are trying to achieve with the product and the business, then it allows you to use that as marketing collateral so you can tell your customers what it is that you’re trying to achieve, who you’re trying to do that for and who you are like and who you are not like.
By default, by having this mission statement, it allows you to decide what it is that you don’t do in addition to what it is that you are going to do. By having that mission statement, you can refer back to it when you’re trying to look at these customers who come in and one of them says, “Oh, I run a photography business.” You’re like, “Yeah, that’s probably not a great fit,” and you can tell that my going back and looking at your mission statement. I don’t think a mission statement is something that you can do on Day One just because it’s probably going to take some time to figure out what that is based on who your ideal customer is, and you’re not going to know that on Day One. That’s going to take some time and effort to figure that out over the course of many months or even, potentially, years. Once you have that mind, it gives you that reference point to go back and say no.
Rob: I would edit this one a bit. In the article, Kerola says that you absolutely must know your unique value proposition and your mission statement. For me, the unique value proposition comes way before a mission statement because the mission statement is that global thing of like, “Google wants to organize the world’s information.” I don’t think you know that from the start; very few people do especially if you’re bootstrapped, you’re doing customer development or even funded for that matter.
I know I often say that if you’re bootstrapped, then blah, blah, blah, but it applies to both in so many cases that if you’re just trying to figure out what to build, I don’t know that your mission statement matters as much as you’re honing in on a solution for your folks for the people who are using you or asking for you to make changes to the app. It’s like, “What separates you from the other solutions on the market?” and that’s what your unique value proposition is, the UVP. It’s UVP or USP, unique selling proposition, but it’s what makes you different.
When you’re building out an email solution, it’s like, “Well, how are you different than Yesware or than MailChimp, and you’ve just got to hone in on that because, if you’re not different, then it’s just a “me too” play. It’s possible to make a living doing that. It’s possible to build a business. Certainly, people have done it but it’s so much harder because you’re just going to be slogging it out for sales that you still don’t have enough of a differentiator. If you’re going to build something that’s a “me too” play, then you need to find a unique traffic source. You need to be really good at SEO and rank in the top three and outrank everybody else and just expect that a certain amount of people are going to sign up without looking at your competitions. There are ways to do this but, in my book, trying to figure out early on how you’re going to be differentiated from the competition is probably the number one thing I’d look at.
Mike: The next item on the list is that what you’re putting together your growth plans, you should focus on actions, not just not the numbers that you need to hit. I think both of them are absolutely important but, without those numbers, you don’t know what it is you’re trying to achieve but, without the actions, you’re never going to be able to achieve them because those actions are critical to being able to meet whatever numbers you put on paper. Based on the numbers, you can backtrack from there and decide what actions need to be taken in order to get that point.
I think in a previous episode, we’ve talked about, basically, mapping out what your goals look like and reverse based on the endpoint that you’re trying to reach and then backtracking from there. “What is it do I need to do before to I get to that point?” and continuing along that path but you need to have those actions and decide what order those actions need to be taken because, if you’re not doing it in the right order or you’re doing it in the wrong places–for example, if you want to do SEO on your website, that’s great and all in order to increase the footprint but what pages are the ones that you should start with. Certain pageants are just not going to matter at all versus other ones, and being able to prioritize those is critical.
Rob: I have mixed thoughts about this one. I agree that it should focus on both, in my opinion. I like focusing on actions, of course, because of exactly what you said and what she says in the article because, then, you’re just delivering–as Ellie said, you’re making those hard phone calls a day, not focusing on the end result and making X sails, but you’re just putting in the work. I’m also motivated by numbers and I’m motivated by the success of seeing things grow. I like to have a goal to strive for that’s not just going through the motions.
I know this is not just saying go through the motions but I think I could fall into the trap if I’m not also keeping my eye on the numbers of just doing things during the day. I think a lot of people can fall under that type. It’s like my actions are to tweet this and to do a blogpost. To do some Instagram on social media–and that could be your plan, but it’s like you have to then measure and make sure that’s moving the numbers, and maybe that’s where I’m kind of nitpicking this one, is I think it should be heavily correlated. You can’t attribute everything to numbers but, man, if you’re not getting out of the plan you’re doing, then you have to change that up. I think that’s where I’m saying–I think I focused on both actions and numbers.
Mike: Maybe focus is a wrong way to put it. It needs to include both as opposed to should focus on one or the other. If you have a growth plan and it’s just, “Hey, these are the numbers that I want to hit,” it’s going to be useless. You have to have those actions as well. If you’re going to go through those actions, you also need to do some sort of measurements and have numbers that you’re going to hit afterwards because, if you’re just doing actions, as you said, and you’re not getting any results of out it, then why are you doing those things? The critical piece here is where you have to have both; it’s not just one or the other.
Moving on, the next one is to optimize for growth, not leads, and it kind of ties back a little back to the growth plan. If you are optimizing for adding, let’s say, newsletter subscribes. That’s great and all, but how are you getting them through the rest of your funnel? Are you trying to optimize them to get them to become activated or sign up to download other things from your newsletter? Are you trying to get them over to the pricing page? What is it that you’re trying to get them to do next?
You need to track the customer or that prospect through the entire sales because, if you’re not doing that, then you can’t track those numbers and you have no way to identify how many people are moving from one step to the next. By tracking those things, it allows you to get rid of the lower IRO activities that you’re doing because those are time and money sinks, and it’s just going to take up a lot of your time and attention. You could be using to spend on other higher IRO activities because those are the things that are generated in better leaves and those and those better leads become better customers because they’re going to seek around for longer and because they’re a better fir for you.
Rob: This reminds me of a couple of conversations I’ve had over the years with folks who are measuring too early in the funnel. I was talking to one sort of founder who said, “Yeah, I have 10,000 uniques a month in my website. How many uniques do you have?” I was like, “That doesn’t matter.” It really doesn’t matter unless we’re talking about certain things but if we’re talking about just making sales, it’s like, “How many trials did you get out of that? How many converted to paid? How many stuck around for more than two or three months?”
It’s like, “Go deeper in the funnel,” which is essentially what this is saying: Don’t get hung up on these top-of-the-funnel metrics. Now, the top-of-the-funnel metrics can be important because they obviously feed the later metrics, but if you’re not closing and retaining people, you are leaking people out of the bottom of your funnel and you’re never going to grow the business. What’s funny is I think it was the same conversation. The guy said he had 10,000 uniques and, at the time, DotNetInvoice was doing 1000 uniques or 1500, but it was doing three or four grand a month, and he was blown away by that because he’s doing way more than his app.
I was like, “It’s because a lot of people who come–it’s highly-targeted traffic and so many of the people who come buy,” and it’s $300.00 a month. There all these reasons why the math work but it was just a head-exploding thing. Really, it’s just mass. It’s just, “Look at the top and you’re going to lose certain people out of each step of that funnel, whether it’s to a demo or to a trial, and then it’s to paid, and then it’s how long they stuck around. With the rules-of-thumb that we frequently covered in this podcast–have covered in talks, have covered in blog posts and such–you can tell which step of the funnel you need to focus on. That’s the biggest thing, is optimizing for growth means focus on that part of the funnel where you have the opportunity to make the biggest difference.
As you grow your app, that is going to move. It’s going to move down the funnel. Probably, early on, it’s going to be like, “Oh my, gosh. We’re not retaining anyone,” and it’s like, “Well, it’s because you don’t have product market fit,” and this can be like, “Oh my, gosh. No one’s setting up for a trial.” It’s because your marketing’s off with your product market fit now. Then, it’s like, “Oh my, gosh. We don’t have nearly enough people hitting our website. It’s like, “Yeah, it’s because you haven’t been focusing on marketing; you’ve been focusing on customer development and building your product.” You’re going to move up and then you’ll probably move the other way and move right back down one to two years in your product, assuming that you have something that’s reasonably successfully.
That actually takes us to our next one, which I think is Points 5 or 6, and it’s track the right metrics. It’s things like monthly recurring revenue, cost per acquisition, cost to acquire a customer and your lifetime value. You obviously need to look at top-of-funnel stuff like, “How many uniques to my website? How many trials am I getting? What is the visit-to-trial percentage? What is the trial-to-paid percentage?” You need to look at those, but those are not as important as the ones I just said, because the ones that MRR, cost per acquisition and the lifetime value are the ones that are optimizing for growth.
A loose rule of thumb is that lifetime value should be greater than or equal three times your cost to acquire a customer. That means it’s a solid acquisition channel if you can make those numbers line up. Now, one thing to say is that what holds true for funded companies and, typically, if you’re funded, you want to acquire a customer for less than one year of their value to you. The average revenue per user or even the revenue for this particular user is $20.00. Then, no matter how long they stick around or even if they stick around five years, if you’re funded, you tend to want to spend less than about $240.00 to acquire that person because it’s $20.00 times 12.
Now, if you’re not funded, cash is a real issue. Typically, I see folks wanting to keep their customer acquisition costs between two and four months of what they’re going to get back from that customer. I remember we hit tail on them on them with Drip as we got more money coming in, we extended that out to 5, and then 6, and then 7 and then you learn to manage your cash and you learn that this month’s cash is coming in and I can now spend more and more to acquire. The more you can spend, the more customers you can put through the funnel. You can’t do this without tracking the right metrics and you have to keep in mind not just these loose rules of thumb that are thrown around for fun in companies but, if you’re bootstrapped, it’s going to be a little bit of a tighter grip on that purse unless you have a big bucket of funding that you’re pulling from.
Mike: Just to reiterate on that piece that Rob had commented on, if you’re bootstrapped, you really want to get your money back a lot quicker if you can with Bluetick I’m going through the same thing where it’s very difficult to allocate a lot of money and resources towards acquiring customers in certain channels just because I know that it’s going to take a heck of a lot longer, and the reality is I just don’t have the money to be able to dump a lot in because if you–let’s say it costs you $500.00 to acquire a customer and, yes, you’ll get $1,500.00 out of it, but it’s going to take you a full year to get there. You can end up going broke if you try and dump all your money into that. You kind of have to play long ball there.
The point of that particular anecdote is that everything takes a lot longer than you want it to. You’re going to have to truck your funnel activity over a longer period of time, you’re probably going to get your lifetime value from these customers in a much longer period of time than you would like to, your tests will take longer to complete, then you’re going to have to analyze them and act on them, but everything is going to take a lot longer than you would like it to. That includes goals and stuff that you put forward as well. If you decide that, “Hey, we’re going to do this marketing campaign and we expect it to take 3 or 4 weeks,” it’s probably going to take you 5 or 6 if not longer just because of all the other things that are going on that are going to demand your attention in the business. Support tickets will come up, things like that, and it just takes longer to do just about everything.
Rob: Our second-to-last lesson you’ll wish you’d learned sooner is to publish with intent, and it’s basically to have a strategy behind what you publish to provide value in a consumable format, value quality over quantity and to track performance and double down on promoting content that does well. Five years ago, quantity actually went out over quality, not in every case but people just cranked out–companies that were cranking out 1 post a week, and then 3, and then 5, and then literally 10 a week twice a day during the week were winning the SEO game and the content marketing game.
That has switched. That’s changed up. Now, folks are focusing on much longer pieces of content, really pillar content, The Ultimate Guide to This and The Definitive Guide to That that might be 20-30,000 words, half the length of the book, and they make it available as a download but also, for the SEO, put it in HTML format. It’s fewer and bigger bats is what it is, and then you double down on the ones that work and you walk away from the ones that don’t. That’s essentially what Kerola’s talking about here.
Mike: The last SaaS marketing lesson you’ll wish you’d learned sooner is that prospects are people. Pretty much everybody on your mailing list that has signed up for it at some point, there’s a person behind every single one of those email addressed. People don’t generally like to be sold to; what they enjoy in going to a website is going to educate them because you’re the expert in a particular space and they’re trying to learn from you. Moving on from that, once you have established that trust, then you’re going to be able to sell your product to them, but it’s more of a situation where they’re the ones who are deciding that they’re going to take that next step.
This is mainly because it is an online marketing scenario. If you are in a direct sales demo, then you are essentially pitching, but you’re on that schedule within whatever the time of that meeting is, but when they’re coming to your website, they’re on their own schedule, and they can pick and choose when they’re going to move forward and you have very, very little control over it. The reality is you have to treat them like a person when you’re interacting with them through the mailing list and take time to build that trust; don’t try to pitch, pitch, pitch because it’s just simply not going to work. Going the education route, helping them to become better at whatever it is that they’re trying to do is going to be much more effective than trying to build all of the trust in a particular email and then sell them on a particular touch point. They’re not just going to go come to your website and buy something on the first shot.
Rob: Yeah, there are very few products that you can sell with one touch point. Often, info products are this way because they tend to be impulse purchases and you can put time constraints and reward pressure and all that stuff, and that is one reason that info marketers have these big splashy launches, is that it’s not a recurring payment. It’s just aspirational and you can sell a lot more of something when it’s aspirational. When it’s software, it requires people’s time and so, as you’re saying, folks are very unlikely to come and buy the first time and there does have to be some type of trust or relationship built up.
Now, there are ways to shortcut this. One of the ways is to have social proof, in essence, to have other people vouch for you. I should back up and say the first way to do it is just to build your own audience. You don’t have to do that to start a product. There’s a bunch of people who do it without ever having an audience of people that follow them. I’ve done it several times with several products, and it’s totally doable and it’s not a bad way to go. I don’t think building an audience is the only way to do it.
However, these days, it is easier than ever to build an audience if that’s your thing. You can do that to build trust in advance. The problem is you have to have a massive list. Let’s say you have a list of 1,000 people who are really following you and you want to sell a SaaS product that’s $10.00 or $20.00 a month. You’re not going to get to critical mass that way. You’re just not going to sell enough licenses or subscriptions to your software to make that work.
If you’re selling a book and you have 1,000 people really following you, you might sell 300 or 400 copies of that book. It would be an ambitious amount, but I’ve done it myself. My first book did that. That is enough to kind of get a ball rolling that could potentially result in stuff down the line. Those are kind of the two sides of building the audience yourself. Another way to do it, as I was saying earlier, is that the next step is to kind of have other people vouch for you, and whether that means testimonials or whether that means they’ll do joint webinars with you, in some way, endorsing your product, saying that they use it, assuming that they do.
That’s another way to kind of shortcut that trust and get growth faster than having to educate everyone individually about why they should trust you, and that was one thing that Clay Collins did really well in the early days of Leadpages, was to do the webinar model and to do with it a bunch of his internet marketing friends who would vouch for Leadpages because they were using it, and then, there you go, you have access to literally hundreds of thousands of people even though your audience is not that large.
That’s just one angle of this “prospects are people” but the real thing to think about is that every prospect, every person, makes their own decision based on what they know about you and the product and what they’ve heard about you and the product. It’s something to keep in mind, that just numbers and conversion rates can help you forget much to your detriment. To recap, the 9 SaaS marketing lessons you’ll wish you’d learn sooner are, number one, find your high expectation customer; number two, don’t sell to everyone; number three, have a mission statement; number four, growth plan should focus on actions and not numbers; number five, optimize for growth, not leads; number six, track the right metrics; number seven, everything takes time; number eight, publish with intent; and, number nine, prospects are people.
If you have a question for us, call our voicemail number at 8888-01-9690 or record an MP3 and email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Out of Control by Moot, used under Creative Commons. Subscribe to us on iTunes by searching for startups and visit Startups for the Rest of Us for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Rob: I’m Rob.
Mike: We’re here to share experiences to help you avoid the same mistakes we’ve made. What’s the word of this week, Rob?
Rob: The word this week is a little bit of wrestling with Google and they’re indexing in webmaster tools because I 301 redirected my entire old blog site, Software by Rob, and I got a new domain, Rob Walling, and I 301’d all that and got it all set up. There’s just always more complexity than you think there’s going to be. I had this seven-step checklist that I went through and, of course, parts of it went wrong and parts of it got cached while I was in the middle of troubleshooting and so you don’t know what the real version is.
I’m literally like–I texted Derek and I’m like, “Can you hit this URL and let me know what you see?” even though I flushed my cash and all that. It was just giving me–from different browsers, it was giving me different results. It wasn’t that big of a deal but then the redirect was fine, everything’s been working and then the Google indexing has really not started. It probably took–it’s been almost 10 days, maybe 14 days, and it’s just now picking up on the new domain. I’m looking at the search analytics and just starting to see 50 total clicks. It’s literally like one day’s worth of clicks or less than that, actually, has started to pick up.
Mike: The hard part about that is that, because Google has different Google-plexes all over the place, different people are going to be different ones so they’re not–the different indexes are in different places, which kind of sucks.
Rob: Yeah, I agree. This is just–it’s like try not to redirect stuff. You can totally do it and not lose traffic in the long term but, in the short term, it’s kind of always a bit more work and there’s always these loose ends that happen. By no means was it a disaster or anything; it was kind of a fun little thing to, I don’t know, stay busy with, but I’ll just be happy when everything’s moved over. Again, the whole site’s functional if you go to Rob Walling. You can go look around and everything’s there but, now, I’m just trying to get Google to make all the Google search results look use Rob Walling instead of the old site. How about you? What’s going on?
Mike: I was looking through some of the comments on some of our older episodes and there was one or a couple of episodes ago where we had talked about the moniker of “the Rest of Us” and how we should have trademarked that or something like that, not that we probably would have gone that road. Glen Bennett wrote and said that there was an Apple ad from the ’80s where they called it “The Computer for the Rest of Us” so we were beat by quite a lot on that.
Rob: Yeah, and that’s been a part of the English language for, I guess, 50 years. I have no idea what the first use of it was but I definitely heard it growing up, just people talking about that.
Mike: Yup. Yeah, so we definitely missed the door on that one.
Rob: Yeah, for sure. There were some other pretty interesting comments. There’s a comment from Rasmus on Episode 389, which was titled Pro Tips for Attending Conferences, and he says something else he does is go to the gym in the morning. It really makes your mind and body ready to listen and learn all day. That is something we forgot to say because I actually try to go to the gym when I’m at conferences, and it’s especially easy at MicroConf because of our 10:00 AM start time. When we used to start at 9:00, I never had time because I was too tired. That is something that I recommend, even to go for a short run, even if it’s only 15 minutes or something. I like getting up and getting out.
Another couple of comments on Episode 395, which was 20 Podcasts We Like, we had two more that requested. Kristoff Engelhart recommended How I Built This by Guy Raz. That’s at NPR podcast, I believe, and he said he specifically liked the episode with the Collision Brothers from Stripe, the guy from Home Depot and the one with the Founders of Ben and Jerry’s. I’ve listened to a few episodes of How I Built This and I liked it. I think I struggled with the fact there were some–the signal to noise for me was a bit low because it’s an NPR show and so it’s tailored to the masses and I always struggle to consume startup stuff made for the masses. Honestly, it’s a really well-produced show if you’re interested. It’s just in interview format, basically, and it’s as you would expect from NPR.
The last comment was from the same episode from Abdu, and he says, “I find it odd you didn’t mention Mixergy. Even Rob was a guest on it.” Yeah, I’ve been a guest on Mixergy six times, I think–five or six times–but it’s not something that I currently have in my rotation. I definitely used to listen to it but the volume of shows that comes out–it just hasn’t been on my radar for a while. Totally, I still see Andrew at conferences and every once and a while. When I hear that someone I know or there’s a particularly interesting interview on Mixergy, I absolutely download it and listen to it, but it’s not on my everyday podcast subscription feed anymore.
Again, that’s mostly due to the sheer volume of shows that come out of there and the interview format. Andrew was one of the early pioneers of that. They were folks who were doing startup interviews but he came on the scene and really revolutionized that, way before John Lee Dumas and several other folks who’ve done it since then. I have a ton of respect for what he’s built and, obviously, have enjoyed my conversations on Mixergy with him. I, in all honesty, listen to less interview shows than I used to. If you do look at that list of 20, there are very few truly just all interview shows. Even like This Week in Startups that we just mentioned, they do some interviews but I personally skip many of those and I listen to a lot more to the news round tables and even some of the pitching ones.
Mike: Going back to your blog redesign that you did for your website, there’s a missed business opportunity in there where somebody could have acquired Rob Walling and sold it to you.
Rob: Someone did. I bought it from another guy named Rob Walling.
Mike: Really?
Rob: Yeah, I bought it a couple of months ago.
Mike: That’s different. If you bought it from another Rob Walling whereas if you would have bought it from Mike Taber, then that would have been different.
Rob: I know. It was funny. When I emailed him, the guy was like, “Whoa, this is kind of weird.” He’s like, “I thought it was a trick email.” I was like, “No, this is actually another Rob Walling.” We had different middle names, of course, but he was funny. He said, “Well, I can tell by your name that you are a scholarly gentleman of great intelligence and manners,” or something. I was like, “Well done, Sir. This is going to be fun.” Just the negotiation and buying it from him was kind of fun.
Mike: That reminds me of when I was at Home Depot a couple of years ago. They paged Mike Taber over the intercom and so, of course, I go come to find out there’s a guy who works there named Mike Taber who lives nearby. It was interesting to meet another Mike Taber.
Rob: Yeah, totally. Very cool. What are we talking about today?
Mike: Today, we are going to be going over a blog article written by Karola Karlson, and it’s over at karolakarlson.com and we’ll link that up in the show notes. It is about SaaS marketing lessons. The title of this episode is SaaS Marketing Lessons You’ll Wish You’d Learn Sooner and what I did was I kind of consolidated a bunch of these things because there’s some things in here that overlap a lot with other topics, and there’s 35 different items in this particular blog article. We’re going to condense that down a little bit. I’m going to talk more focused about some of these different pieces where it applies specifically to the types of people who are listening to this show.
Rob: We have about 9, it looks like, down from 35.
Mike: 9 SaaS marketing lessons.
Rob: They’re making a listicle!
Mike: The first one is about finding your high expectation customer, and there’s another link that we’ll add into the show notes because there is a link over to a blog article that somebody else wrote all about finding what your high expectation customer is, and the basic definition of that is the type of customer who has very high expectations for your product and they know exactly what it is that they want to do. There’s a series of questions that you can answer very specifically about them. For example, “Who is it that needs the product? What does it do for them? How do they feel about it? What’s the true benefit for them?” and, “Will your product exceed their expectations?”
If all those criteria are met, then you have what’s called a high expectation customer because they know exactly what it is that they want and they need, and their bar is very high. If you can exceed that bar, then you’re going to satisfy a much larger number of customers. Early on, it’s going to be very difficult for you to meet that especially because they’re going to be an advanced customer; they’re not going to be an early adopter. Assuming that you can meet that bar for that customer, then you’re going to be able to sell to a much larger pool of people. This is going to help you to grow the business a lot just because of that much larger pool, and knowing those numbers helps you in a great number of other ways which we’ll talk about later in this episode.
Rob: Right, and when they define the high expectation customer, they say it’s the most discerning person within your target demographic. It’s someone who will acknowledge and enjoy your product or service for its greatest benefit, and that person needs to be someone who others aspire to emulate because they see them as clever, judicious and insightful.
Mike: The second lesson is to not sell to everyone. I think, generally speaking, this is obvious advice that’s repeated a lot by different people on the startups basis, but the real question is, “Why is this repeated so often?” It’s because it tells you who not to sell to, who should you not be targeting for your SaaS or your products, or your service. The real benefit of doing that is that, if you can get rid of those people in certain marketing channels or you avoid marketing to them because they’re not a great fit for your product, either that could be for a variety of reasons; either they churn out a lot or it’s an ancillary benefit to them, they’re not really looking for your products.
There’s all these different reasons why they might not be your ideal customer but, by removing them from the pool of people that you’re actively marketing to, then it’s going to yield a lot better ROI across all of your marketing channels and it allows you to focus much more on the types of people who are a good fit for your product versus the ones that are not as good a fit and you’re going to have to do a lot more work in order to sell them on your product.
Rob: Yeah, and, in the early days, this is all you can do, right? Especially if you’re bootstrapped but even when you’re funded. Five years ago, I thought about a venture-funded company and thought, “Man, they have infinite resources and they can just sell to everyone.” Then, of course, I worked inside Leadpages for 20 months and realized that, “No, even there, there are these massive trade offs. They just can’t hire enough good people.” Even with really high budgets, they can’t hire enough good people to sell to everyone.
I think your point about, “Yes, we hear this over and over,” is well-taken, but why do we hear it? It’s because people make this mistake over, and over, and over. In your early days, it’s really easy that anyone who gives you a dollar, you want to get the product to them because you want to maximize your revenue because every dollar means you can market more. The problem with that is you can quickly, especially if you’re a software product, go off the rails with folks who are requesting things that take you away from your core vision or the core vision that’s going to meet the needs of most people versus someone, again–if you’re selling to internet marketers or the SaaS founders and then a photographer who comes in, he can pay $1000.00 a year but he’s going to have totally different requests.
I went through this exact thing early on with Drip where we just got a request that was like, “We don’t really want to build that and that doesn’t help anybody else,” and so then that person was disappointed and they didn’t love the product. We eventually parted ways but it was a lesson I think each of us learns as we go, is just say no fairly frequently. If you don’t think they’re going to get value of it or they’re not in your core market, I would err on the side of saying no in the early days.
Mike: That kind of leads a little bit into the next one, which is to have a mission statement. I think, most of the time, this is probably not a great place to focus a lot of your time and effort but the reality is that when you have a mission statement about what it is that you are trying to do and what you are trying to achieve with the product and the business, then it allows you to use that as marketing collateral so you can tell your customers what it is that you’re trying to achieve, who you’re trying to do that for and who you are like and who you are not like.
By default, by having this mission statement, it allows you to decide what it is that you don’t do in addition to what it is that you are going to do. By having that mission statement, you can refer back to it when you’re trying to look at these customers who come in and one of them says, “Oh, I run a photography business.” You’re like, “Yeah, that’s probably not a great fit,” and you can tell that my going back and looking at your mission statement. I don’t think a mission statement is something that you can do on Day One just because it’s probably going to take some time to figure out what that is based on who your ideal customer is, and you’re not going to know that on Day One. That’s going to take some time and effort to figure that out over the course of many months or even, potentially, years. Once you have that mind, it gives you that reference point to go back and say no.
Rob: I would edit this one a bit. In the article, Kerola says that you absolutely must know your unique value proposition and your mission statement. For me, the unique value proposition comes way before a mission statement because the mission statement is that global thing of like, “Google wants to organize the world’s information.” I don’t think you know that from the start; very few people do especially if you’re bootstrapped, you’re doing customer development or even funded for that matter.
I know I often say that if you’re bootstrapped, then blah, blah, blah, but it applies to both in so many cases that if you’re just trying to figure out what to build, I don’t know that your mission statement matters as much as you’re honing in on a solution for your folks for the people who are using you or asking for you to make changes to the app. It’s like, “What separates you from the other solutions on the market?” and that’s what your unique value proposition is, the UVP. It’s UVP or USP, unique selling proposition, but it’s what makes you different.
When you’re building out an email solution, it’s like, “Well, how are you different than Yesware or than MailChimp, and you’ve just got to hone in on that because, if you’re not different, then it’s just a “me too” play. It’s possible to make a living doing that. It’s possible to build a business. Certainly, people have done it but it’s so much harder because you’re just going to be slogging it out for sales that you still don’t have enough of a differentiator. If you’re going to build something that’s a “me too” play, then you need to find a unique traffic source. You need to be really good at SEO and rank in the top three and outrank everybody else and just expect that a certain amount of people are going to sign up without looking at your competitions. There are ways to do this but, in my book, trying to figure out early on how you’re going to be differentiated from the competition is probably the number one thing I’d look at.
Mike: The next item on the list is that what you’re putting together your growth plans, you should focus on actions, not just not the numbers that you need to hit. I think both of them are absolutely important but, without those numbers, you don’t know what it is you’re trying to achieve but, without the actions, you’re never going to be able to achieve them because those actions are critical to being able to meet whatever numbers you put on paper. Based on the numbers, you can backtrack from there and decide what actions need to be taken in order to get that point.
I think in a previous episode, we’ve talked about, basically, mapping out what your goals look like and reverse based on the endpoint that you’re trying to reach and then backtracking from there. “What is it do I need to do before to I get to that point?” and continuing along that path but you need to have those actions and decide what order those actions need to be taken because, if you’re not doing it in the right order or you’re doing it in the wrong places–for example, if you want to do SEO on your website, that’s great and all in order to increase the footprint but what pages are the ones that you should start with. Certain pageants are just not going to matter at all versus other ones, and being able to prioritize those is critical.
Rob: I have mixed thoughts about this one. I agree that it should focus on both, in my opinion. I like focusing on actions, of course, because of exactly what you said and what she says in the article because, then, you’re just delivering–as Ellie said, you’re making those hard phone calls a day, not focusing on the end result and making X sails, but you’re just putting in the work. I’m also motivated by numbers and I’m motivated by the success of seeing things grow. I like to have a goal to strive for that’s not just going through the motions.
I know this is not just saying go through the motions but I think I could fall into the trap if I’m not also keeping my eye on the numbers of just doing things during the day. I think a lot of people can fall under that type. It’s like my actions are to tweet this and to do a blogpost. To do some Instagram on social media–and that could be your plan, but it’s like you have to then measure and make sure that’s moving the numbers, and maybe that’s where I’m kind of nitpicking this one, is I think it should be heavily correlated. You can’t attribute everything to numbers but, man, if you’re not getting out of the plan you’re doing, then you have to change that up. I think that’s where I’m saying–I think I focused on both actions and numbers.
Mike: Maybe focus is a wrong way to put it. It needs to include both as opposed to should focus on one or the other. If you have a growth plan and it’s just, “Hey, these are the numbers that I want to hit,” it’s going to be useless. You have to have those actions as well. If you’re going to go through those actions, you also need to do some sort of measurements and have numbers that you’re going to hit afterwards because, if you’re just doing actions, as you said, and you’re not getting any results of out it, then why are you doing those things? The critical piece here is where you have to have both; it’s not just one or the other.
Moving on, the next one is to optimize for growth, not leads, and it kind of ties back a little back to the growth plan. If you are optimizing for adding, let’s say, newsletter subscribes. That’s great and all, but how are you getting them through the rest of your funnel? Are you trying to optimize them to get them to become activated or sign up to download other things from your newsletter? Are you trying to get them over to the pricing page? What is it that you’re trying to get them to do next?
You need to track the customer or that prospect through the entire sales because, if you’re not doing that, then you can’t track those numbers and you have no way to identify how many people are moving from one step to the next. By tracking those things, it allows you to get rid of the lower IRO activities that you’re doing because those are time and money sinks, and it’s just going to take up a lot of your time and attention. You could be using to spend on other higher IRO activities because those are the things that are generated in better leaves and those and those better leads become better customers because they’re going to seek around for longer and because they’re a better fir for you.
Rob: This reminds me of a couple of conversations I’ve had over the years with folks who are measuring too early in the funnel. I was talking to one sort of founder who said, “Yeah, I have 10,000 uniques a month in my website. How many uniques do you have?” I was like, “That doesn’t matter.” It really doesn’t matter unless we’re talking about certain things but if we’re talking about just making sales, it’s like, “How many trials did you get out of that? How many converted to paid? How many stuck around for more than two or three months?”
It’s like, “Go deeper in the funnel,” which is essentially what this is saying: Don’t get hung up on these top-of-the-funnel metrics. Now, the top-of-the-funnel metrics can be important because they obviously feed the later metrics, but if you’re not closing and retaining people, you are leaking people out of the bottom of your funnel and you’re never going to grow the business. What’s funny is I think it was the same conversation. The guy said he had 10,000 uniques and, at the time, DotNetInvoice was doing 1000 uniques or 1500, but it was doing three or four grand a month, and he was blown away by that because he’s doing way more than his app.
I was like, “It’s because a lot of people who come–it’s highly-targeted traffic and so many of the people who come buy,” and it’s $300.00 a month. There all these reasons why the math work but it was just a head-exploding thing. Really, it’s just mass. It’s just, “Look at the top and you’re going to lose certain people out of each step of that funnel, whether it’s to a demo or to a trial, and then it’s to paid, and then it’s how long they stuck around. With the rules-of-thumb that we frequently covered in this podcast–have covered in talks, have covered in blog posts and such–you can tell which step of the funnel you need to focus on. That’s the biggest thing, is optimizing for growth means focus on that part of the funnel where you have the opportunity to make the biggest difference.
As you grow your app, that is going to move. It’s going to move down the funnel. Probably, early on, it’s going to be like, “Oh my, gosh. We’re not retaining anyone,” and it’s like, “Well, it’s because you don’t have product market fit,” and this can be like, “Oh my, gosh. No one’s setting up for a trial.” It’s because your marketing’s off with your product market fit now. Then, it’s like, “Oh my, gosh. We don’t have nearly enough people hitting our website. It’s like, “Yeah, it’s because you haven’t been focusing on marketing; you’ve been focusing on customer development and building your product.” You’re going to move up and then you’ll probably move the other way and move right back down one to two years in your product, assuming that you have something that’s reasonably successfully.
That actually takes us to our next one, which I think is Points 5 or 6, and it’s track the right metrics. It’s things like monthly recurring revenue, cost per acquisition, cost to acquire a customer and your lifetime value. You obviously need to look at top-of-funnel stuff like, “How many uniques to my website? How many trials am I getting? What is the visit-to-trial percentage? What is the trial-to-paid percentage?” You need to look at those, but those are not as important as the ones I just said, because the ones that MRR, cost per acquisition and the lifetime value are the ones that are optimizing for growth.
A loose rule of thumb is that lifetime value should be greater than or equal three times your cost to acquire a customer. That means it’s a solid acquisition channel if you can make those numbers line up. Now, one thing to say is that what holds true for funded companies and, typically, if you’re funded, you want to acquire a customer for less than one year of their value to you. The average revenue per user or even the revenue for this particular user is $20.00. Then, no matter how long they stick around or even if they stick around five years, if you’re funded, you tend to want to spend less than about $240.00 to acquire that person because it’s $20.00 times 12.
Now, if you’re not funded, cash is a real issue. Typically, I see folks wanting to keep their customer acquisition costs between two and four months of what they’re going to get back from that customer. I remember we hit tail on them on them with Drip as we got more money coming in, we extended that out to 5, and then 6, and then 7 and then you learn to manage your cash and you learn that this month’s cash is coming in and I can now spend more and more to acquire. The more you can spend, the more customers you can put through the funnel. You can’t do this without tracking the right metrics and you have to keep in mind not just these loose rules of thumb that are thrown around for fun in companies but, if you’re bootstrapped, it’s going to be a little bit of a tighter grip on that purse unless you have a big bucket of funding that you’re pulling from.
Mike: Just to reiterate on that piece that Rob had commented on, if you’re bootstrapped, you really want to get your money back a lot quicker if you can with Bluetick I’m going through the same thing where it’s very difficult to allocate a lot of money and resources towards acquiring customers in certain channels just because I know that it’s going to take a heck of a lot longer, and the reality is I just don’t have the money to be able to dump a lot in because if you–let’s say it costs you $500.00 to acquire a customer and, yes, you’ll get $1,500.00 out of it, but it’s going to take you a full year to get there. You can end up going broke if you try and dump all your money into that. You kind of have to play long ball there.
The point of that particular anecdote is that everything takes a lot longer than you want it to. You’re going to have to truck your funnel activity over a longer period of time, you’re probably going to get your lifetime value from these customers in a much longer period of time than you would like to, your tests will take longer to complete, then you’re going to have to analyze them and act on them, but everything is going to take a lot longer than you would like it to. That includes goals and stuff that you put forward as well. If you decide that, “Hey, we’re going to do this marketing campaign and we expect it to take 3 or 4 weeks,” it’s probably going to take you 5 or 6 if not longer just because of all the other things that are going on that are going to demand your attention in the business. Support tickets will come up, things like that, and it just takes longer to do just about everything.
Rob: Our second-to-last lesson you’ll wish you’d learned sooner is to publish with intent, and it’s basically to have a strategy behind what you publish to provide value in a consumable format, value quality over quantity and to track performance and double down on promoting content that does well. Five years ago, quantity actually went out over quality, not in every case but people just cranked out–companies that were cranking out 1 post a week, and then 3, and then 5, and then literally 10 a week twice a day during the week were winning the SEO game and the content marketing game.
That has switched. That’s changed up. Now, folks are focusing on much longer pieces of content, really pillar content, The Ultimate Guide to This and The Definitive Guide to That that might be 20-30,000 words, half the length of the book, and they make it available as a download but also, for the SEO, put it in HTML format. It’s fewer and bigger bats is what it is, and then you double down on the ones that work and you walk away from the ones that don’t. That’s essentially what Kerola’s talking about here.
Mike: The last SaaS marketing lesson you’ll wish you’d learned sooner is that prospects are people. Pretty much everybody on your mailing list that has signed up for it at some point, there’s a person behind every single one of those email addressed. People don’t generally like to be sold to; what they enjoy in going to a website is going to educate them because you’re the expert in a particular space and they’re trying to learn from you. Moving on from that, once you have established that trust, then you’re going to be able to sell your product to them, but it’s more of a situation where they’re the ones who are deciding that they’re going to take that next step.
This is mainly because it is an online marketing scenario. If you are in a direct sales demo, then you are essentially pitching, but you’re on that schedule within whatever the time of that meeting is, but when they’re coming to your website, they’re on their own schedule, and they can pick and choose when they’re going to move forward and you have very, very little control over it. The reality is you have to treat them like a person when you’re interacting with them through the mailing list and take time to build that trust; don’t try to pitch, pitch, pitch because it’s just simply not going to work. Going the education route, helping them to become better at whatever it is that they’re trying to do is going to be much more effective than trying to build all of the trust in a particular email and then sell them on a particular touch point. They’re not just going to go come to your website and buy something on the first shot.
Rob: Yeah, there are very few products that you can sell with one touch point. Often, info products are this way because they tend to be impulse purchases and you can put time constraints and reward pressure and all that stuff, and that is one reason that info marketers have these big splashy launches, is that it’s not a recurring payment. It’s just aspirational and you can sell a lot more of something when it’s aspirational. When it’s software, it requires people’s time and so, as you’re saying, folks are very unlikely to come and buy the first time and there does have to be some type of trust or relationship built up.
Now, there are ways to shortcut this. One of the ways is to have social proof, in essence, to have other people vouch for you. I should back up and say the first way to do it is just to build your own audience. You don’t have to do that to start a product. There’s a bunch of people who do it without ever having an audience of people that follow them. I’ve done it several times with several products, and it’s totally doable and it’s not a bad way to go. I don’t think building an audience is the only way to do it.
However, these days, it is easier than ever to build an audience if that’s your thing. You can do that to build trust in advance. The problem is you have to have a massive list. Let’s say you have a list of 1,000 people who are really following you and you want to sell a SaaS product that’s $10.00 or $20.00 a month. You’re not going to get to critical mass that way. You’re just not going to sell enough licenses or subscriptions to your software to make that work.
If you’re selling a book and you have 1,000 people really following you, you might sell 300 or 400 copies of that book. It would be an ambitious amount, but I’ve done it myself. My first book did that. That is enough to kind of get a ball rolling that could potentially result in stuff down the line. Those are kind of the two sides of building the audience yourself. Another way to do it, as I was saying earlier, is that the next step is to kind of have other people vouch for you, and whether that means testimonials or whether that means they’ll do joint webinars with you, in some way, endorsing your product, saying that they use it, assuming that they do.
That’s another way to kind of shortcut that trust and get growth faster than having to educate everyone individually about why they should trust you, and that was one thing that Clay Collins did really well in the early days of Leadpages, was to do the webinar model and to do with it a bunch of his internet marketing friends who would vouch for Leadpages because they were using it, and then, there you go, you have access to literally hundreds of thousands of people even though your audience is not that large.
That’s just one angle of this “prospects are people” but the real thing to think about is that every prospect, every person, makes their own decision based on what they know about you and the product and what they’ve heard about you and the product. It’s something to keep in mind, that just numbers and conversion rates can help you forget much to your detriment. To recap, the 9 SaaS marketing lessons you’ll wish you’d learn sooner are, number one, find your high expectation customer; number two, don’t sell to everyone; number three, have a mission statement; number four, growth plan should focus on actions and not numbers; number five, optimize for growth, not leads; number six, track the right metrics; number seven, everything takes time; number eight, publish with intent; and, number nine, prospects are people.
If you have a question for us, call our voicemail number at 8888-01-9690 or record an MP3 and email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Out of Control by Moot, used under Creative Commons. Subscribe to us on iTunes by searching for startups and visit Startups for the Rest of Us for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 397 | Customer Acquisition Strategies
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about customer acquisition strategies. Based on a themarketingstudent.com article, they break down the difference between strategies versus tactics and how to think about your acquisition strategy.
Items mentioned in this article:
Mike: In this episode of Startups For The Rest Of Us, Rob and I will be talking about customer acquisition strategies. This is Startups For The Rest Of Us episode 397.
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, watching, and growing software products. Whether you built your first product or you’re just thinking about it, I’m Mike.
Rob: And I’m Rob.
Mike: We’re here to share experiences to help you with the same mistakes we’ve made. So, trivia question for you, Rob. How many times do we say Startups For The Rest Of Us in the intro?
Rob: Three?
Mike: Yes.
Rob: That was a guess.
Mike: I remember so many commenting on that just because we’re like, “Oh, you say that a lot,” and I was like, “Three times, pretty close together but we just wish we did it three times.”
Rob: We should figure out how to shrink that. Should we also record an episode that is just a list of lists?
Mike: Sure. I think that sounds like great idea.
Rob: We got an iTunes comment. It was a four or five-star review but it’s, “Stop making lists. All your episodes are listicals or something like BuzzFeed.” So I went back and looked in the prior 20 episodes. We had three that said “X ways to do this,” or, “20 podcast we like,” or, “X approaches to this.” It’s 3 out of 20. I don’t know. That didn’t feel like everyone.
I also feel doing that list approach. I don’t do it for the BuzzFeed aspect, but I do it because I feel it helps listeners know what the episodes are going to cover. It’s a really concrete outline that people can get their head around and they know for it number three or number four, they just know how long it’s going to go.
For me, I have been using Zoom for a while. We were using it at Drip to do demos and such, and I really enjoyed it. It works well on low bandwidth. It is just a frictionless experience for people you’re trying to get on a call. I cannot stand Skype anymore. The user interface, that you have to link up with people, accept this invitation, and the fact that I can just drop a Zoom link somewhere and people just show up, and you’re there video conferencing is amazing.
I think I’m still on the free plan. With Drip we had to have a paid plan but now that I’m just doing stuff on my own, you can get quite a bit and really not have to pay for it. The other thing that I have signed up for, which I really have never done the whole Calendly send the link and then book the stuff. But I’m booking just enough things here and there and they’re all ad hoc that I decided to try it.
I actually send up for YouCanBook.me which is a bootstrap Calendly competitor. Bridget, the co-founder spoke on MicroConf a couple of years ago and then Anna, who was employee number three or four at Drip runs Customer Success for YouCanBook.me. I want to give it a try and see what the experience was like. I’ve been really pleased with it.
Again, I think I’m on their free tier as well. But it’s this combination of things that it is just saving me a lot of time and a lot of headache. I’m sure there’s pros and cons of YouCanBook.me versus Calendly versus the other 10 apps that do it but I’ve got a really good experience because it does everything I need. I has a lot of options in that app. I was impressed with it because I know it’s been around for a couple of years. But they built a ton of features into it so I just want to give them a shout out as a new user.
Mike: I think it is justified that you’re on the free plan given that you’re unemployed.
Rob: That’s right. It’s an income thing not a lack-of-features-that-I-need thing. You’re not going to let that go, are you?
Mike: No, not until you start to do startup. This could go on for as long as you want it to be.
Rob: The only way to make it stop, Rob, is to start another company.
Mike: I will shame you until you do that. No. just kidding. Other thing. I’ll make a pre-announcement for this because I don’t have a contract in place and I don’t have a confirmation on this. You can probably put it tentatively on your calendar. Hopefully we won’t have to make a correction to this. But MicroConf, you’re tentatively scheduled for October 21st to October 23rd in Croatia. Write that down, I’m hoping that next week I will not have to do a retraction. If you’re not in the mailing list for that, you can head over to microconfeurope.com and get on the mailing list for that. Just sign up and we will let you know when we have all the details worked out for everything and when tickets are on sale.
Rob: I’m stoked about this. Hope that comes together. We wanted to go to Croatia for the past several years. We almost hoped over there when we were having MicroConf in Barcelona. We never made it, so very excited.
Another thing for me and kind of a thanks and a high five from a guy named John Elliot with equipmentwallet.com and he says, “In 2012, I started a web product that I soon abandoned. As a single non-technical co-founder, I simply lack many skill sets at the time to get anywhere. However, I never stopped believing in the concept of what I set out to do. In August of 2017, I relaunched equipmentwallet.com, it’s a marketplace that matches businesses seeking equipment financing with lenders who bid for their business. Your podcast to me has been educational, tactical, and most of all motivational. It’s been part of my journey and helped me revisit my project and get it out there. Thanks to you both.”
Mike: That’s awesome. Thanks, John. We really appreciate letting us know about that.
Rob: Yup. It’s always good to hear success stories, people getting to launch, and revenue milestones and all that stuff. He also has PS, he says, “Are there any previous episode you can point me to regarding selecting or selling through affiliates, pros and cons, using a service like Commission Junction or not?”
Honestly, I would go to startupsfortherestofus.com and in that search box, type in ‘affiliates’ or ‘affiliate marketing’ and see what comes up. I am guessing in 400 episodes we’ve talked about this. I don’t know if we spent an entire episode on it, but even if you download a handful of Q&A episodes and listen through them at 2X, I think we have laid out a lot of our thoughts on this topic at some point or another.
Mike: That’s a little known hack on our website because we have all the transcripts available, everything’s searchable so you can go through and if you have a specific topic that you’re looking for, you can just go in, type in a couple of keywords, search, and see what episodes come up. Quite frequently there’s something there when you’re searching for something like affiliates or specific companies you usually find find it there. It’s nice to have that.
I remember you and I went back and forth of this number of years ago as to whether or not we were to continue doing transcripts and I always find them to be helpful to be able to go back and find them. I did see recently that Google is starting to take videos and MP3s that they find on the internet and if they have the links to them, then they also transcribed them.
Rob: Yeah. I would imagine that because they want index everything, right?
Mike: Right. They’ll do the speech-to-text translation and then make it so you can find those things and incorporate them into their search engine.
Rob: Yup. That is a little known hack that I use often. When people ask, “Have you ever spoken about this?” often times I can’t remember. I go to the site and I search it. So it is neat to have transcripts of hundreds of hours of us chatting
Mike: Definitely.
Rob: So what are we talking about today?
Mike: Today, we are going to be talking about how to pick a customer acquisition strategy. This is based very largely on an article that we’re going to link to over on themarketingstudent.com. It talks a little bit about customer acquisition strategies and difference in tactics, strategies, and how to think about them. What we’re going to do is basically run down the article itself, go through this, and use that article as an outline—come in give or take—on certain pieces of it.
Rob: Cool. Let’s dive in.
Mike: The first part is essentially differentiated between tactics and strategies because the article itself is on customer acquisition strategies. So it starts off by differentiating between those two. It says, “Tactics are the ones that you see all over the place. How do you use LinkedIn to contact people and scale up your outreach efforts or how do you reduce your onboarding by 17% and this is how such and such company did it.
But the reality is that, those are all tactics versus strategies are things that people don’t talk a lot about and they tend to be overlooked because it’s the tactics that people are going to be able to put into place that are actionable, versus the strategies which give you really a foundation for how you’re going to be approaching those things versus the tactics are stacked on top of it. That’s really how they phrase this. The strategy is the foundation and tactics are the things that you stack on top of strategy in order to make it work. If you don’t have a strategy for something then you are going to be drowning in a tactic because you’re going to be trying all these different things and they don’t necessarily all fit together well because they are not part of a cohesive strategy.
Rob: Yeah and that’s one comment I was going to make. Notice that the title of this article is ‘How to pick a customer acquisition strategy that will get you to $100 million,’ and I’m assuming ARR. I was going to say if that said ‘How to pick a customer acquisition tactic,’ that will get you there, that would be a misleading headline because I don’t believe there is—except in extremely rare cases—a single tactic that’s going to get you there. Whereas, if you have an overarching strategy for a bunch of tactics under there, then that makes more sense. I would like to think of strategy much like you said, it’s this umbrella under which a bunch of tactics fall.
Mike: The next piece that they lead into is how to think about your acquisition strategy and how do you come up with them. One way—it’s kind of obvious—is to look at existing companies that are the level that you want to get. So they use $100 million companies as the basis. If you want to get your own company to a $100 million, you look for other $100 million companies that have a similar business model to yours.
With that said, we’re going to dive into three different pieces of it that they talked about. The first one is identifying what’s your business model is. This is all about figuring out what your customer lifetime value is, how much you’re going to get from a given customer or account, or how you’re going to be selling your software or your services, how are they going to be packaged together.
From there you backtrack a little bit, say, “Okay, well how many customers or accounts is it going to take me at this number or this price point in order to get me there?” It can range anywhere from, if you have 100 customers each paying you $1 million, then that’s what will get you there versus if you have a million customers who are each paying you $100 a year, then that will also get you to $100 million. The whole point of this part one is to identify what your business model looks like and the price points that you were going to be expecting customers to come in at in order to be able to build your business out to get to that level.
Rob: And something to think about here is they keep talking about this $100 million mark because that’s what funded companies shoot for. That’s when you can get acquired for $1 billion, you can IPO or whatever. You don’t have to think like that. If you look around at successful competitors, even if let’s say they’re a bootstrapped fast company doing $2, $3, $4 million and they’re in an adjacent space but you see that they’re just killing it with a certain sales funnel, or a certain type of Facebook ad, or a certain ad network you haven’t heard of, or with affiliate webinar model.
There’s all types that you can see, and then you borrow, you adapt, and you use it in your space. But they’re not to be doing $100 million. They’re just throwing that out because I think that’s how people in the valley think. There can be successful approaches by people who get to $500K in ARR or $1 million in ARR. It may work better or worse in your space if you leverage it well and if it is something your competitors are not doing, which is a key thing. If they’re doing it, it’s not to say you shouldn’t do it but it just becomes harder because you guys are both similar products and marketing in a similar way. It just becomes a lot of noise but if you can figure out a way to again borrow something from an adjacent space and bring it into your market, that’s a good way to think about it.
Mike: And that’s what we’re doing with the way that they’ve laid out this customer acquisition strategy because you can take that number of $100 million and say, “Okay, let’s scale this down. Instead of shooting for $100 million, let’s shoot for $1 million.” How do you take this strategic approach and just chop off a couple of zeroes from that and say, “Okay, this is what we’re shooting for?”
I do find it interesting the way that they lay out the 100 customers paying you $1 million versus one million customers paying you $100 a year. The different levels they have are 100 customers, 1000, 10,000, 100,000, and then one million. They essentially map them to different types of animals. The $1 million a year customer is an elephant, and then the next one down, the $100,000 customer is a deer, then they have rabbits, mice, and then flies. That’s how they categorize these different types of customers. It’s really just a matter of scaling for them.
The second part of this is identifying the right hunting strategy that you’re going to be using to target these types of customers. They specifically call out Aaron Ross’ Spears, Nets, and Seeds Acquisition Framework for this. If you’re not familiar with that, we’ll have the links in the show notes for this. Essentially, the idea is that there’s different types of tactics that you can use to acquire those customers.
Spears is an acquisition strategy that you’re going to have to do a lot of leg work for this. You’re going to have to do outbound sales, you’re going to have to do business development, exhibits. I don’t want to call it manual labor, but there’s a lot of human elements or human labor that is involved in it that there’s just a lot of work. It’s hard to automate some of those things.
The second one is using nets and that’s something where you pull in a large number of prospects all the same time. These are things like blogging, or content networking, or webinars, or PR, things like that, and a lot of those people are going to end up being useless as prospects, but you’re going to get a lot of the ones that you’re also looking for.
Seeds is the strategy to grow your customer base essentially on its own because you’re gathering those up in such a way that you want to help them grow, and in essence they will then turn around and help you grow. It’s partly leaning on word-of-mouth, viral campaigns, and any other customer interaction where you get those people to help you grow. A very common example that people use is Dropbox where they would free storage space in exchange for you sharing it. That’s a viral campaign and it’s also customers helping you to acquire customers.
Rob: Right and they give an example of a few companies that do it and they say, “Salesforce did the spears model which is the direct human involvement, high-touch sales as we call it here. Xero, which is an accounting package just the nets model and that is blogging content, marketing, PR type stuff, and that’s what most of the B2B SaaS apps that we frequent. The non-enterprise ones that are not doing high-touch sales, that’s the common approach here. Then Dropbox and Facebook they’re doing the seeds approach.
I think this is a good through experiment. I think it’s probably pretty easy for you to answer. If your price point is going to be low, then yes, you need some virality or you need organic search or you need a traffic source that’s basically going to be free because you need customer acquisition to be very low.
I think a lot of the bootstrappers we know who do WordPress plugins, they get that free traffic in essence from wordpress.org for the plugin repo. Then they take that big wide funnel—it’s a freemium model—and they sell addons that are paid to that and you get get a nice little business based on that. That really is a net of sorts. It’s much less a viral approach so it wouldn’t be like seeds and it’s definitely not the one-on-one spears stuff.
But if you have a high purchase price, let’s say you have the potential to sell deals that are $10K a year, $20K a year and up, that’s when you really want to think about—you still want to do the nets stuff, which the where the blogging, content marketing, and PR, you still want to think of doing that and driving inbound traffic, but then using the spear approach, using the high-touch sales as much as you can because you’re just going to close a lot more sales once you do that.
I don’t remember what the exact numbers were, but I remember when we brought in on a drip, I have been doing some sales demos here and there and I really didn’t enjoy them. I wasn’t particularly good at them and always put them off because this wasn’t a think that I like to do but once we brought Anna in and started just really being customer success in sales, we started closing two times or three times the number of higher value deals.
At the time, high value was $150 a month and up or something. That’s like start moving your MRR in a hurry. If you can close 10, 20 of those a month and you’ve been growing at a few grand a month, you’re growing two, three grand a month and suddenly you can double growth by doing that.
Anyway, I see a lot of value in taking a couple of these approaches. I don’t think you need to be so focused or so differentiated between not doing parts of both. I think all three of these are good if you can make them work.
Mike: In general, I think that most of the SaaS companies that we tend to encounter on a regular basis in our circles tend to use the net strategy where you’re doing content marketing or you’re publishing articles and collecting an email list and that’s generally the way it’s done because I think with seeds, it feels to me like that’s the model that you almost need to have funding for because you need to be able to pay for that in some way, shape, or form. Like with Dropbox, they had funding so it was easy for them to pay for that.
With spears, it takes a lot of manual effort to drop a sales rep, to go to talk to some enterprise customer and six months to a year to land them as a customer, and you needed to be able to have the runway in order to do that. I feel like most bootstrap businesses tend to concentrate on the net strategy and that in some ways, dictates the types of customers that you’re going to attract as well. You can either pick which customer you’re going to go after and then hone the types of tools that you’re going to use, and the strategy that you’re going to use to get them, or if you it the other way around, then you’re going to be pointed specifically in one direction at the type of customer you’re going to end up with.
In part three of this article we’re going to basically skip over this because they drill into a couple of different things with those strategies. First one was spears. They talk about sales force, HubSpot. The second one with nets, they talk about Xero, and then with seeds they talk about Dropbox and Facebook. We’re going to go skip over those just because we’d rather talk about them a little bit. We’re going to talk more specifically about the types of approaches you can use in these areas, specifically like a bootstrap business because I think that’s going to be more relevant to people listening to us.
With spears, Rob, you did actually just had a great anecdote about how you had Anna doing some of those sales calls and those one-to-one customer success calls. Did you transition from having you do it to somebody else do it just because you didn’t like doing it or was it because you saw that there was potential there that you really wanted to capture and go after?
Rob: It was less about not liking it because frankly, if I didn’t like it and I didn’t think that there’d be very many, I would have just done them. But I felt like were leaving money on the table by not having someone who could get good at the demos, who could really work with customers, spend more time, and I did not have the time. That was much more of a time constraint.
The job of a founder over time is to fire yourself from every job, so when Derrick and I started, he was writing the code, he and I were doing product together, and I was doing everything else. There was a lot. It was marketing, it was sales, and it was demos. I was even doing email support early on before, before I brought someone else to do that.
So one by one I just started firing myself from those. Bringing Anna on I was going to hand her a lot of the marketing and the sales, and it turned out she was really good at customer success. She was good at the other things too, but customer success was where she really excelled. It turns out that there’s a nice overlap between sales and customer success if you’re doing it well and you’re trying to truly help someone understand not just what the product does but how it can help that person.
I think it’s a good example to think about in the early days you always have to be choosy about what you’re doing, but in the early days you have to be really picky about it. You have to just find that one channel, maybe two channels that are going to get you to the point where you have enough money to hire that next person. Once you have that next person, now you can either hand them one of the channels to manage, you can find them new channels, or you could hand them both the channels you already have going, and you go out and find the new ones. It depends on the type of person you hire and what you enjoy doing. Do you enjoy just walking and tackling on the stuff you already know or do you enjoy going out and finding those new strategies?
You’re not going to need 10 marketing strategies to get seven or eight figures in revenue. You can do it with really a very small amount. Often it’s between one and three that you really get working, it depends on app obviously, but if you really kept one to three cranking, you just wash, rinse, repeat, and you start doing it over and over. You look at how lead pages grew with their Clay’s affiliate webinar model. Look at how HitTail grew. It was a lot of Facebook ads and SEO were the two things that grew HitTail. We look at Moz, Rand Fishkin’s company, grew through a ton of content and content marketing. HubSpot was a combination of content plus having a sales force. It’s not like you need to master 10 different things in order to really grow a company.
Mike: I think the interesting thing here is that they talk about spears and relate them back to sales force and HubSpot. Those two are really focused on extremely large customers and they’re going after the elephants as they put it. People are going to pay them lots of money. But I think that in the very early days of the bootstrapped software company, you can use that strategy and almost you have to use that strategy because you have to try and figure out who your ideal customer is.
You don’t want to cast a wide net and end up with hundreds or thousands of people who are all the wrong fit for your company. You want to specifically pick and choose, like, “I want to go after companies that are making between $1 million and $5 million, these are the parameters, this is the person I want to talk to.” If that works and those people turn into customers, then you want to keep going after them. But if you’re casting a wide net and you’re trying to get lots of people into your sales funnel, then it’s a lot harder to do that because you’re getting a lot of data but you don’t have any way to quantify what is the right data from the right people. I think that using that, that spear strategy when you’re very, very early on to help you figure out, like are these the right people to talk to, that’s a very viable approach.
Once you gotten past the point of figuring out the attributes of your ideal customer, then you start using strategies and tactics that fall under the nets category. That’s because you know who it is you are targeting and you can run paid advertising, for example, and you can specifically target those people. You can write articles and blog posts and publish them, knowing that you’re going to attract the right types of people because in those articles, you can talk about the types of problems that those people are having. It allows you to grow the business and the number of people that you’re bringing in. Not only are we going to be a great fit but most of them will be because of what you learned using the spears approach early on.
Rob: Yeah and that’s the thing when you’re first starting out. This refers more to bootstappers because if you’re venture-funded, a lot of them setup sales forces. They do that, they do the spear stuff even to $100 million. But for bootstrappers, that is an interesting thing to think about, that progression of starting with spears, why you are doing customer development, moving to nets which is getting the phone going and getting a lot of customers in that funnel. Whether you’re closing them self-service, whether you’re doing low touch, medium touch sales, doesn’t really matter. I think the higher touch sales you can do—in almost all cases—leads to higher conversion rate, at least with people who want that kind of extra hand-holding.
With seeds, if you’re in super early stage, let’s say you have 50 customers, seeds don’t work because you don’t have the momentum yet. It’s when you get 1000, 2000, 3000 customers, that everybody starts talking about you, and then if there’s a referral program, or there’s a way to bring other people in, or you get that mini brand in that, either in the vertical or with those thousands of people, that’s when seeds stuff really start working. It is interesting to think about it as something they didn’t say in the article at all but it’s life-cycle. It’s step one, step two, step three, at least loosely.
Mike: The last one is seeds, which, it’s hard to get your customers or it’s hard to move the needle in your business if you’re relying on customers to help you let other people know they could become a customer of yours if you don’t already have customers. That’s really a classic chicken-and-egg problem. If you don’t have any customers, you’re not going to able to grow your business enough. Maybe if you got one customer and they refer one person, you can grow 100% but it’s really difficult to even get that level out of it.
So the seeds strategy is really something that you can’t really implement until after you have a customer base and you know that you’re solving their problem in such a way that makes them happy enough to be able to refer other people that they know into your application. That’s mainly because there’s a lack of trust there. You need to be able to get them to a point where you are solving the problem well enough that they trust you in order to say, “Hey, I’m willing to expend my social capital, invite some of my friends to using this product because it’s helpful or solves a valuable problem for me.”
I do think that there are cases where that is not necessarily as applicable, especially in a B2C environment. Social sharing, for example, that’s a very low ask for people versus referring somebody as an actual paying customer. So there’s a bit of a difference I think between a referral program versus, “Hey, invite somebody else to use this free app that you and 25 of your friends are already using.”
Rob: Yeah with B2B stuff, depending on how deep into B2B you are, is it truly B2C? Is it B to very small business? Is it B to prosumers, which is more like photographers? Or, are you getting into B to mid-sized business and B to enterprise? Each of those really has a different kind of seed model like a different virality. As we look, Facebook certainly is on the B2C, period. It’s not really a business platform, even though people are running businesses on it. Now I’m trying to promote them. But it spread because of the very much consumers linking up with one another. That’s going to be a different model than if for selling software that’s let’ say, $10,000, $20,000 a year. They’re not going to do things for the same reasons. They’re going to make recommendations because they go to trade shows and someone asks, “Hey, what software do you use for this?” or you can do affiliate programs. Can work, but really it depends on how much space is at that point. More as with consumers, I think the affiliate stuff and the giveaways makes a lot more sense.
We could probably do a whole episode. I don’t want to go down that rabbit hole too far but I think there’s a lot of different approaches you can use here if you’re trying to go with the seed route and go for virality.
I think that wraps us up for today. Again, we will link to the marketingstudent.com’s article that we talked through today. If you have a question for us, call our voicemail number at 888-801-9690 or email us at questions@startupsfortherestofus.com. If you do it as an MP3 or another type of audio file, those always go straight to the top of the question queue.
Our theme music is an excerpt from We’re Outta Control by MoOt. It’s used under Creative Commons. Subscribe to us in iTunes by searching for startups. Visit startupsfortherestofus.com for a full transcript to each episode. Thanks for listening. We’ll see you next time.
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, watching, and growing software products. Whether you built your first product or you’re just thinking about it, I’m Mike.
Rob: And I’m Rob.
Mike: We’re here to share experiences to help you with the same mistakes we’ve made. So, trivia question for you, Rob. How many times do we say Startups For The Rest Of Us in the intro?
Rob: Three?
Mike: Yes.
Rob: That was a guess.
Mike: I remember so many commenting on that just because we’re like, “Oh, you say that a lot,” and I was like, “Three times, pretty close together but we just wish we did it three times.”
Rob: We should figure out how to shrink that. Should we also record an episode that is just a list of lists?
Mike: Sure. I think that sounds like great idea.
Rob: We got an iTunes comment. It was a four or five-star review but it’s, “Stop making lists. All your episodes are listicals or something like BuzzFeed.” So I went back and looked in the prior 20 episodes. We had three that said “X ways to do this,” or, “20 podcast we like,” or, “X approaches to this.” It’s 3 out of 20. I don’t know. That didn’t feel like everyone.
I also feel doing that list approach. I don’t do it for the BuzzFeed aspect, but I do it because I feel it helps listeners know what the episodes are going to cover. It’s a really concrete outline that people can get their head around and they know for it number three or number four, they just know how long it’s going to go.
For me, I have been using Zoom for a while. We were using it at Drip to do demos and such, and I really enjoyed it. It works well on low bandwidth. It is just a frictionless experience for people you’re trying to get on a call. I cannot stand Skype anymore. The user interface, that you have to link up with people, accept this invitation, and the fact that I can just drop a Zoom link somewhere and people just show up, and you’re there video conferencing is amazing.
I think I’m still on the free plan. With Drip we had to have a paid plan but now that I’m just doing stuff on my own, you can get quite a bit and really not have to pay for it. The other thing that I have signed up for, which I really have never done the whole Calendly send the link and then book the stuff. But I’m booking just enough things here and there and they’re all ad hoc that I decided to try it.
I actually send up for YouCanBook.me which is a bootstrap Calendly competitor. Bridget, the co-founder spoke on MicroConf a couple of years ago and then Anna, who was employee number three or four at Drip runs Customer Success for YouCanBook.me. I want to give it a try and see what the experience was like. I’ve been really pleased with it.
Again, I think I’m on their free tier as well. But it’s this combination of things that it is just saving me a lot of time and a lot of headache. I’m sure there’s pros and cons of YouCanBook.me versus Calendly versus the other 10 apps that do it but I’ve got a really good experience because it does everything I need. I has a lot of options in that app. I was impressed with it because I know it’s been around for a couple of years. But they built a ton of features into it so I just want to give them a shout out as a new user.
Mike: I think it is justified that you’re on the free plan given that you’re unemployed.
Rob: That’s right. It’s an income thing not a lack-of-features-that-I-need thing. You’re not going to let that go, are you?
Mike: No, not until you start to do startup. This could go on for as long as you want it to be.
Rob: The only way to make it stop, Rob, is to start another company.
Mike: I will shame you until you do that. No. just kidding. Other thing. I’ll make a pre-announcement for this because I don’t have a contract in place and I don’t have a confirmation on this. You can probably put it tentatively on your calendar. Hopefully we won’t have to make a correction to this. But MicroConf, you’re tentatively scheduled for October 21st to October 23rd in Croatia. Write that down, I’m hoping that next week I will not have to do a retraction. If you’re not in the mailing list for that, you can head over to microconfeurope.com and get on the mailing list for that. Just sign up and we will let you know when we have all the details worked out for everything and when tickets are on sale.
Rob: I’m stoked about this. Hope that comes together. We wanted to go to Croatia for the past several years. We almost hoped over there when we were having MicroConf in Barcelona. We never made it, so very excited.
Another thing for me and kind of a thanks and a high five from a guy named John Elliot with equipmentwallet.com and he says, “In 2012, I started a web product that I soon abandoned. As a single non-technical co-founder, I simply lack many skill sets at the time to get anywhere. However, I never stopped believing in the concept of what I set out to do. In August of 2017, I relaunched equipmentwallet.com, it’s a marketplace that matches businesses seeking equipment financing with lenders who bid for their business. Your podcast to me has been educational, tactical, and most of all motivational. It’s been part of my journey and helped me revisit my project and get it out there. Thanks to you both.”
Mike: That’s awesome. Thanks, John. We really appreciate letting us know about that.
Rob: Yup. It’s always good to hear success stories, people getting to launch, and revenue milestones and all that stuff. He also has PS, he says, “Are there any previous episode you can point me to regarding selecting or selling through affiliates, pros and cons, using a service like Commission Junction or not?”
Honestly, I would go to startupsfortherestofus.com and in that search box, type in ‘affiliates’ or ‘affiliate marketing’ and see what comes up. I am guessing in 400 episodes we’ve talked about this. I don’t know if we spent an entire episode on it, but even if you download a handful of Q&A episodes and listen through them at 2X, I think we have laid out a lot of our thoughts on this topic at some point or another.
Mike: That’s a little known hack on our website because we have all the transcripts available, everything’s searchable so you can go through and if you have a specific topic that you’re looking for, you can just go in, type in a couple of keywords, search, and see what episodes come up. Quite frequently there’s something there when you’re searching for something like affiliates or specific companies you usually find find it there. It’s nice to have that.
I remember you and I went back and forth of this number of years ago as to whether or not we were to continue doing transcripts and I always find them to be helpful to be able to go back and find them. I did see recently that Google is starting to take videos and MP3s that they find on the internet and if they have the links to them, then they also transcribed them.
Rob: Yeah. I would imagine that because they want index everything, right?
Mike: Right. They’ll do the speech-to-text translation and then make it so you can find those things and incorporate them into their search engine.
Rob: Yup. That is a little known hack that I use often. When people ask, “Have you ever spoken about this?” often times I can’t remember. I go to the site and I search it. So it is neat to have transcripts of hundreds of hours of us chatting
Mike: Definitely.
Rob: So what are we talking about today?
Mike: Today, we are going to be talking about how to pick a customer acquisition strategy. This is based very largely on an article that we’re going to link to over on themarketingstudent.com. It talks a little bit about customer acquisition strategies and difference in tactics, strategies, and how to think about them. What we’re going to do is basically run down the article itself, go through this, and use that article as an outline—come in give or take—on certain pieces of it.
Rob: Cool. Let’s dive in.
Mike: The first part is essentially differentiated between tactics and strategies because the article itself is on customer acquisition strategies. So it starts off by differentiating between those two. It says, “Tactics are the ones that you see all over the place. How do you use LinkedIn to contact people and scale up your outreach efforts or how do you reduce your onboarding by 17% and this is how such and such company did it.
But the reality is that, those are all tactics versus strategies are things that people don’t talk a lot about and they tend to be overlooked because it’s the tactics that people are going to be able to put into place that are actionable, versus the strategies which give you really a foundation for how you’re going to be approaching those things versus the tactics are stacked on top of it. That’s really how they phrase this. The strategy is the foundation and tactics are the things that you stack on top of strategy in order to make it work. If you don’t have a strategy for something then you are going to be drowning in a tactic because you’re going to be trying all these different things and they don’t necessarily all fit together well because they are not part of a cohesive strategy.
Rob: Yeah and that’s one comment I was going to make. Notice that the title of this article is ‘How to pick a customer acquisition strategy that will get you to $100 million,’ and I’m assuming ARR. I was going to say if that said ‘How to pick a customer acquisition tactic,’ that will get you there, that would be a misleading headline because I don’t believe there is—except in extremely rare cases—a single tactic that’s going to get you there. Whereas, if you have an overarching strategy for a bunch of tactics under there, then that makes more sense. I would like to think of strategy much like you said, it’s this umbrella under which a bunch of tactics fall.
Mike: The next piece that they lead into is how to think about your acquisition strategy and how do you come up with them. One way—it’s kind of obvious—is to look at existing companies that are the level that you want to get. So they use $100 million companies as the basis. If you want to get your own company to a $100 million, you look for other $100 million companies that have a similar business model to yours.
With that said, we’re going to dive into three different pieces of it that they talked about. The first one is identifying what’s your business model is. This is all about figuring out what your customer lifetime value is, how much you’re going to get from a given customer or account, or how you’re going to be selling your software or your services, how are they going to be packaged together.
From there you backtrack a little bit, say, “Okay, well how many customers or accounts is it going to take me at this number or this price point in order to get me there?” It can range anywhere from, if you have 100 customers each paying you $1 million, then that’s what will get you there versus if you have a million customers who are each paying you $100 a year, then that will also get you to $100 million. The whole point of this part one is to identify what your business model looks like and the price points that you were going to be expecting customers to come in at in order to be able to build your business out to get to that level.
Rob: And something to think about here is they keep talking about this $100 million mark because that’s what funded companies shoot for. That’s when you can get acquired for $1 billion, you can IPO or whatever. You don’t have to think like that. If you look around at successful competitors, even if let’s say they’re a bootstrapped fast company doing $2, $3, $4 million and they’re in an adjacent space but you see that they’re just killing it with a certain sales funnel, or a certain type of Facebook ad, or a certain ad network you haven’t heard of, or with affiliate webinar model.
There’s all types that you can see, and then you borrow, you adapt, and you use it in your space. But they’re not to be doing $100 million. They’re just throwing that out because I think that’s how people in the valley think. There can be successful approaches by people who get to $500K in ARR or $1 million in ARR. It may work better or worse in your space if you leverage it well and if it is something your competitors are not doing, which is a key thing. If they’re doing it, it’s not to say you shouldn’t do it but it just becomes harder because you guys are both similar products and marketing in a similar way. It just becomes a lot of noise but if you can figure out a way to again borrow something from an adjacent space and bring it into your market, that’s a good way to think about it.
Mike: And that’s what we’re doing with the way that they’ve laid out this customer acquisition strategy because you can take that number of $100 million and say, “Okay, let’s scale this down. Instead of shooting for $100 million, let’s shoot for $1 million.” How do you take this strategic approach and just chop off a couple of zeroes from that and say, “Okay, this is what we’re shooting for?”
I do find it interesting the way that they lay out the 100 customers paying you $1 million versus one million customers paying you $100 a year. The different levels they have are 100 customers, 1000, 10,000, 100,000, and then one million. They essentially map them to different types of animals. The $1 million a year customer is an elephant, and then the next one down, the $100,000 customer is a deer, then they have rabbits, mice, and then flies. That’s how they categorize these different types of customers. It’s really just a matter of scaling for them.
The second part of this is identifying the right hunting strategy that you’re going to be using to target these types of customers. They specifically call out Aaron Ross’ Spears, Nets, and Seeds Acquisition Framework for this. If you’re not familiar with that, we’ll have the links in the show notes for this. Essentially, the idea is that there’s different types of tactics that you can use to acquire those customers.
Spears is an acquisition strategy that you’re going to have to do a lot of leg work for this. You’re going to have to do outbound sales, you’re going to have to do business development, exhibits. I don’t want to call it manual labor, but there’s a lot of human elements or human labor that is involved in it that there’s just a lot of work. It’s hard to automate some of those things.
The second one is using nets and that’s something where you pull in a large number of prospects all the same time. These are things like blogging, or content networking, or webinars, or PR, things like that, and a lot of those people are going to end up being useless as prospects, but you’re going to get a lot of the ones that you’re also looking for.
Seeds is the strategy to grow your customer base essentially on its own because you’re gathering those up in such a way that you want to help them grow, and in essence they will then turn around and help you grow. It’s partly leaning on word-of-mouth, viral campaigns, and any other customer interaction where you get those people to help you grow. A very common example that people use is Dropbox where they would free storage space in exchange for you sharing it. That’s a viral campaign and it’s also customers helping you to acquire customers.
Rob: Right and they give an example of a few companies that do it and they say, “Salesforce did the spears model which is the direct human involvement, high-touch sales as we call it here. Xero, which is an accounting package just the nets model and that is blogging content, marketing, PR type stuff, and that’s what most of the B2B SaaS apps that we frequent. The non-enterprise ones that are not doing high-touch sales, that’s the common approach here. Then Dropbox and Facebook they’re doing the seeds approach.
I think this is a good through experiment. I think it’s probably pretty easy for you to answer. If your price point is going to be low, then yes, you need some virality or you need organic search or you need a traffic source that’s basically going to be free because you need customer acquisition to be very low.
I think a lot of the bootstrappers we know who do WordPress plugins, they get that free traffic in essence from wordpress.org for the plugin repo. Then they take that big wide funnel—it’s a freemium model—and they sell addons that are paid to that and you get get a nice little business based on that. That really is a net of sorts. It’s much less a viral approach so it wouldn’t be like seeds and it’s definitely not the one-on-one spears stuff.
But if you have a high purchase price, let’s say you have the potential to sell deals that are $10K a year, $20K a year and up, that’s when you really want to think about—you still want to do the nets stuff, which the where the blogging, content marketing, and PR, you still want to think of doing that and driving inbound traffic, but then using the spear approach, using the high-touch sales as much as you can because you’re just going to close a lot more sales once you do that.
I don’t remember what the exact numbers were, but I remember when we brought in on a drip, I have been doing some sales demos here and there and I really didn’t enjoy them. I wasn’t particularly good at them and always put them off because this wasn’t a think that I like to do but once we brought Anna in and started just really being customer success in sales, we started closing two times or three times the number of higher value deals.
At the time, high value was $150 a month and up or something. That’s like start moving your MRR in a hurry. If you can close 10, 20 of those a month and you’ve been growing at a few grand a month, you’re growing two, three grand a month and suddenly you can double growth by doing that.
Anyway, I see a lot of value in taking a couple of these approaches. I don’t think you need to be so focused or so differentiated between not doing parts of both. I think all three of these are good if you can make them work.
Mike: In general, I think that most of the SaaS companies that we tend to encounter on a regular basis in our circles tend to use the net strategy where you’re doing content marketing or you’re publishing articles and collecting an email list and that’s generally the way it’s done because I think with seeds, it feels to me like that’s the model that you almost need to have funding for because you need to be able to pay for that in some way, shape, or form. Like with Dropbox, they had funding so it was easy for them to pay for that.
With spears, it takes a lot of manual effort to drop a sales rep, to go to talk to some enterprise customer and six months to a year to land them as a customer, and you needed to be able to have the runway in order to do that. I feel like most bootstrap businesses tend to concentrate on the net strategy and that in some ways, dictates the types of customers that you’re going to attract as well. You can either pick which customer you’re going to go after and then hone the types of tools that you’re going to use, and the strategy that you’re going to use to get them, or if you it the other way around, then you’re going to be pointed specifically in one direction at the type of customer you’re going to end up with.
In part three of this article we’re going to basically skip over this because they drill into a couple of different things with those strategies. First one was spears. They talk about sales force, HubSpot. The second one with nets, they talk about Xero, and then with seeds they talk about Dropbox and Facebook. We’re going to go skip over those just because we’d rather talk about them a little bit. We’re going to talk more specifically about the types of approaches you can use in these areas, specifically like a bootstrap business because I think that’s going to be more relevant to people listening to us.
With spears, Rob, you did actually just had a great anecdote about how you had Anna doing some of those sales calls and those one-to-one customer success calls. Did you transition from having you do it to somebody else do it just because you didn’t like doing it or was it because you saw that there was potential there that you really wanted to capture and go after?
Rob: It was less about not liking it because frankly, if I didn’t like it and I didn’t think that there’d be very many, I would have just done them. But I felt like were leaving money on the table by not having someone who could get good at the demos, who could really work with customers, spend more time, and I did not have the time. That was much more of a time constraint.
The job of a founder over time is to fire yourself from every job, so when Derrick and I started, he was writing the code, he and I were doing product together, and I was doing everything else. There was a lot. It was marketing, it was sales, and it was demos. I was even doing email support early on before, before I brought someone else to do that.
So one by one I just started firing myself from those. Bringing Anna on I was going to hand her a lot of the marketing and the sales, and it turned out she was really good at customer success. She was good at the other things too, but customer success was where she really excelled. It turns out that there’s a nice overlap between sales and customer success if you’re doing it well and you’re trying to truly help someone understand not just what the product does but how it can help that person.
I think it’s a good example to think about in the early days you always have to be choosy about what you’re doing, but in the early days you have to be really picky about it. You have to just find that one channel, maybe two channels that are going to get you to the point where you have enough money to hire that next person. Once you have that next person, now you can either hand them one of the channels to manage, you can find them new channels, or you could hand them both the channels you already have going, and you go out and find the new ones. It depends on the type of person you hire and what you enjoy doing. Do you enjoy just walking and tackling on the stuff you already know or do you enjoy going out and finding those new strategies?
You’re not going to need 10 marketing strategies to get seven or eight figures in revenue. You can do it with really a very small amount. Often it’s between one and three that you really get working, it depends on app obviously, but if you really kept one to three cranking, you just wash, rinse, repeat, and you start doing it over and over. You look at how lead pages grew with their Clay’s affiliate webinar model. Look at how HitTail grew. It was a lot of Facebook ads and SEO were the two things that grew HitTail. We look at Moz, Rand Fishkin’s company, grew through a ton of content and content marketing. HubSpot was a combination of content plus having a sales force. It’s not like you need to master 10 different things in order to really grow a company.
Mike: I think the interesting thing here is that they talk about spears and relate them back to sales force and HubSpot. Those two are really focused on extremely large customers and they’re going after the elephants as they put it. People are going to pay them lots of money. But I think that in the very early days of the bootstrapped software company, you can use that strategy and almost you have to use that strategy because you have to try and figure out who your ideal customer is.
You don’t want to cast a wide net and end up with hundreds or thousands of people who are all the wrong fit for your company. You want to specifically pick and choose, like, “I want to go after companies that are making between $1 million and $5 million, these are the parameters, this is the person I want to talk to.” If that works and those people turn into customers, then you want to keep going after them. But if you’re casting a wide net and you’re trying to get lots of people into your sales funnel, then it’s a lot harder to do that because you’re getting a lot of data but you don’t have any way to quantify what is the right data from the right people. I think that using that, that spear strategy when you’re very, very early on to help you figure out, like are these the right people to talk to, that’s a very viable approach.
Once you gotten past the point of figuring out the attributes of your ideal customer, then you start using strategies and tactics that fall under the nets category. That’s because you know who it is you are targeting and you can run paid advertising, for example, and you can specifically target those people. You can write articles and blog posts and publish them, knowing that you’re going to attract the right types of people because in those articles, you can talk about the types of problems that those people are having. It allows you to grow the business and the number of people that you’re bringing in. Not only are we going to be a great fit but most of them will be because of what you learned using the spears approach early on.
Rob: Yeah and that’s the thing when you’re first starting out. This refers more to bootstappers because if you’re venture-funded, a lot of them setup sales forces. They do that, they do the spear stuff even to $100 million. But for bootstrappers, that is an interesting thing to think about, that progression of starting with spears, why you are doing customer development, moving to nets which is getting the phone going and getting a lot of customers in that funnel. Whether you’re closing them self-service, whether you’re doing low touch, medium touch sales, doesn’t really matter. I think the higher touch sales you can do—in almost all cases—leads to higher conversion rate, at least with people who want that kind of extra hand-holding.
With seeds, if you’re in super early stage, let’s say you have 50 customers, seeds don’t work because you don’t have the momentum yet. It’s when you get 1000, 2000, 3000 customers, that everybody starts talking about you, and then if there’s a referral program, or there’s a way to bring other people in, or you get that mini brand in that, either in the vertical or with those thousands of people, that’s when seeds stuff really start working. It is interesting to think about it as something they didn’t say in the article at all but it’s life-cycle. It’s step one, step two, step three, at least loosely.
Mike: The last one is seeds, which, it’s hard to get your customers or it’s hard to move the needle in your business if you’re relying on customers to help you let other people know they could become a customer of yours if you don’t already have customers. That’s really a classic chicken-and-egg problem. If you don’t have any customers, you’re not going to able to grow your business enough. Maybe if you got one customer and they refer one person, you can grow 100% but it’s really difficult to even get that level out of it.
So the seeds strategy is really something that you can’t really implement until after you have a customer base and you know that you’re solving their problem in such a way that makes them happy enough to be able to refer other people that they know into your application. That’s mainly because there’s a lack of trust there. You need to be able to get them to a point where you are solving the problem well enough that they trust you in order to say, “Hey, I’m willing to expend my social capital, invite some of my friends to using this product because it’s helpful or solves a valuable problem for me.”
I do think that there are cases where that is not necessarily as applicable, especially in a B2C environment. Social sharing, for example, that’s a very low ask for people versus referring somebody as an actual paying customer. So there’s a bit of a difference I think between a referral program versus, “Hey, invite somebody else to use this free app that you and 25 of your friends are already using.”
Rob: Yeah with B2B stuff, depending on how deep into B2B you are, is it truly B2C? Is it B to very small business? Is it B to prosumers, which is more like photographers? Or, are you getting into B to mid-sized business and B to enterprise? Each of those really has a different kind of seed model like a different virality. As we look, Facebook certainly is on the B2C, period. It’s not really a business platform, even though people are running businesses on it. Now I’m trying to promote them. But it spread because of the very much consumers linking up with one another. That’s going to be a different model than if for selling software that’s let’ say, $10,000, $20,000 a year. They’re not going to do things for the same reasons. They’re going to make recommendations because they go to trade shows and someone asks, “Hey, what software do you use for this?” or you can do affiliate programs. Can work, but really it depends on how much space is at that point. More as with consumers, I think the affiliate stuff and the giveaways makes a lot more sense.
We could probably do a whole episode. I don’t want to go down that rabbit hole too far but I think there’s a lot of different approaches you can use here if you’re trying to go with the seed route and go for virality.
I think that wraps us up for today. Again, we will link to the marketingstudent.com’s article that we talked through today. If you have a question for us, call our voicemail number at 888-801-9690 or email us at questions@startupsfortherestofus.com. If you do it as an MP3 or another type of audio file, those always go straight to the top of the question queue.
Our theme music is an excerpt from We’re Outta Control by MoOt. It’s used under Creative Commons. Subscribe to us in iTunes by searching for startups. Visit startupsfortherestofus.com for a full transcript to each episode. Thanks for listening. We’ll see you next time.
Episode 396 | Revisiting 2018 Goals, Raising Funding, Marketing at Events, and More Listener Questions
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In this episode of Startups For The Rest Of Us, Rob and Mike check in with their 2018 goals, and answer listener questions on topics including raising funding and marketing at events.
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Rob: In this episode of Startups For the Rest of Us, Mike and I revisit our 2018 goals, talk about raising funding, marketing, and events, and we answer more and listen to questions. This is Startups For the Rest of Us, episode 396.
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 Rob.
Mike: I’m Mike.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, sir?
Mike: Well, I recorded a video this morning for Bluetick with somebody who’s starting a partner program and we basically walked through a process for doing LinkedIn prospecting and then feeding the prospects into Bluetick to do the email follow ups and get people onto a scheduled call, which is kind of the whole premise or at least the starting point for where Bluetick really started anyway. It’s good to see that it’s making, I’ll say, not really making a name for itself, but it’s going to be getting out there into much more people’s hands.
Rob: Do you consider Bluetick more of a cold email tool or a warm email tool?
Mike: A warm email. It does work for cold email, but cold email is basically a subset of warm email, so really like with cold email you’re just trying to make that initial contact and there’s lots of companies out there that do.
But, typically, once you’ve gotten them to reply, then they are completely hands-off, whereas, with Bluetick I’m trying to do a lot of things to structure it such that it will help you manage the conversation moving from the point where you’ve initially made contact, all the way up to the point where they become a customer, and then even after they’ve become a customer, still managing some of that sales communication, the upsells and things like that or even if somebody stops becoming a customer, you can add them into an email sequence that’s like an offboarding email sequence, for example, and feed that information back into the system, so that’s the general direction, I’ll say.
Rob: For sure. Cool. From my end, I have a couple of more podcast recommendations that came to us via Twitter and our comment thread for episode 395. Then, I have a couple of books I want to talk about that I have attempted to or have been listening to.
The two podcasts that came through, one is from Josh Duty and he is a longtime listener and MicroConf attendee, and he talked about EconTalk, which is a podcast I’ve never heard of.
He said it’s a must listen podcast for your list. I’ve listened to every episode and it’s probably the single most valuable intellectual resource I found. It’s great for understanding economics, but he’s branched out to interviews and lots of other areas over the past years. I can’t recommend it enough, so interesting podcasts. I’ll certainly add it to my list and listen to a few episodes and see if it strikes my fancy.
The other podcast is called Exponent and it’s recommended by Joe Hopkins. He says, “Hey, Rob and Mike, thanks for sharing your podcast list. You might like Exponent by Ben Thompson, the creator of the Stratechery blog,” I like the blog a lot. “It explores the business models and strategies of major tech players like Google, Apple, Uber, Facebook. Somewhat contrary, but provides a different point of view, more well-thought-out point of view than a lot of media.”
Those are two to potentially add to your podcatcher and then a couple of books that I’ve been listening to. One that I really like is called Bad Blood: Secrets and Lies in Silicon Valley and it’s the story of Theranos. Have you heard of Theranos, Mike?
Mike: Yes, I have.
Rob: So you know the story of how it imploded, so the author John Carreyrou is basically walking through the whole history and he interviewed a bunch of people and particularly got emails and he’s doing direct quotes. It kind of feels a little bit like a Nick Bilton, like a hatching Twitter or a book like that where week by week it tells the story.
The founder of Theranos, Elizabeth Holmes was like 19, maybe. She dropped out started when she was 19, but it was definitely in her early 20s and she had this youthful hubris, and so young, and so naïve, and she basically was like faking demos early on with this.
It was basically a patch that was supposed to take blood samples and look at stuff in the blood and the product never worked is an essence what, it sounds like, this book is saying. They would fake demos even to investors and they would fake demos to potential clients like Pfizer and these big drug companies.
It’s just mind-blowing, it’s like you just can’t do that, but it was like she had this reality distortion field they were saying she was trying to be Steve Jobs and she switched to kind of a wardrobe of wearing black turtlenecks, and she would bully her people, and they would just turn over constantly, turned over the entire senior leadership team over the course of a year. They turned over most of the employees and then they would just hire new ones.
It’s just this insane tale of like mismanagement hubris and thinking that the end justify the means and they would sue anyone. Like the employees would leave and then they would like sue them if they spoke out at all. It was like they were trying to keep everybody silent to the fact that this thing didn’t work.
Anyways, I’m probably 25% of the way in. It’s a really good story. It’s a little bit aggravating, because she thinks she’s Steve Jobs and that always pisses me off. It’s so irritating when people take that tact of like, “Well, he did it and so I can do it, too.” But it’s like, “Yeah, but it worked for him and you’re not going to be able to reproduce that.”
Anyways, it’s something that if you can stomach it, it’s kind of painful to listen to but if you can stomach it, it’s a really well told story.
Mike: Awesome. Yeah, I’ve seen them in the news quite a bit and, obviously, like all of the stuff that’s coming out after the fact, so I definitely kind of seen the inside scoop on some of that. I totally agree with you about people who are going out and thinking, “Oh, I’m going to be the next Steve Jobs and the end justify the means.”
That can be true to an extent, but you have to be successful at it, because if you’re not then the whole thing is going to implode, like there’s no way around that, like you’re really skating on thin ice, and you can’t violate the law when you’re doing that either, you just can’t.
Rob: That was a big problem and that’s the thing. It’s like when you look at someone like Steve Jobs who people say really was very hard to work with and he was a bully, and he just had all these really odd traits, but he figured out a way to make it work. One of the ways is that he was a deca millionaire by the time he was 21, and that kind of helped like they have that success with the Apple 1 and the Apple 2.
If you don’t have that, and you try to have this attitude, and you basically burn all of these bridges, and you burn out all of your people, and you burn your relationships like it just crumbles, and the odds of you then even achieving that first success just plummet in my opinion, so it’s a tough one.
The other book that I started reading or listening to and then just bailed on it, if anyone is considering reading this book, I really didn’t enjoy, it’s called Valley of the Gods: A Silicon Valley Story and it follows like three or four aspiring founders in a sense, but it really doesn’t.
I get the feeling the book really didn’t know what it was about. It was just kind of wandering and it talked about the Thiel Fellowship and then it talked about these founders doing stuff, and eventually I was just like, “I just don’t care about the people and I don’t care about the stories that are going on,” which is a bit disappointing because I loved these tales of startups but, again, if you’re going to come out listening to it, I would probably or reading it, I would probably recommend maybe skipping that one.
Something else I wanted to do today Mike is revisit our 2018 goals. It is approaching midway through the year and I think we talked about them back in maybe February or March. We have listener questions that we’re going to dive into, but I think it’s always helpful to kind of get status updates a couple times a year as we progress to figure out where are we with our goals, have our goals changed, and just trying to check where we’re at.
Mike: I guess I’ll kick things off, one of my carryover goals was logging at least 100 days worth of exercise this coming year and I’ll say the first couple of months I was a little lax just because I had a lot of things going on, but I am happy to say I think the last month I logged 13 days at the gym, so slowly getting up there. I think I’m a little bit behind right now. I’m thinking around 130 or so something like that.
It’s June now, by the end of June, I should be at 50, so if I did 20 days which is probably unlikely this month, just because I know I’m going to be gone for a week for family vacation. Then, I would get to about halfway, so I’m slightly behind, but I think that I’m definitely optimistic that I’ll be able to catch up and hit that goal this year.
Rob: Very cool. My first goal was to write a virtual reality program that allows me to roll around in a mattress of bitcoins. Wait, that was the goal that you set for me, remember that?
Mike: Yes, I do. How’s that coming, by the way?
Rob: I’ve not started doing that yet.
Mike: You’ve got seven more months.
Rob: I do. It’s not even going to be VR, it’s just going to be an R program, a reality program, where I actually roll on a mattress of bitcoins, a bunch of thumb drives. No, my first serious goal was to be in fewer meetings, under 10.
Mike: I think you cheated on this.
Rob: Under 10 hours a week.
Mike: You cheated.
Rob: I didn’t.
Mike: You cheated.
Rob: I did not know in December of 2017 what was going to happen in 2018, but I have nailed this one, Mike, just nailed it.
Mike: I’m sorry, man. You cheated.
Rob: No, man, I love it. I love it. So for those who aren’t understanding what we’re laughing about is by leaving Drip at the end of April, basically, I’m in almost no meetings now. This is probably the only recurring meeting I have on my calendar now as you and I recording, so I definitely achieved that. I’m looking forward to maintaining that through the rest of the year.
Mike: My other carryover goal was to make Bluetick profitable, including my time. So far I’m cautiously optimistic on this one, revenue has been going up, cleared kind of another hurdle this past month, so moving things forward.
I don’t know, I’ve got a couple of annual plans that I’ve sold as well, so those are definitely helpful in terms of the revenue. Like I said, I’ll keep people posted on it. I don’t know how much of the numbers I’m actually comfortable sharing at this point, but we’ll see. It’s something I kind of have to think about.
Rob: Do you feel like you’re on track for this by December or is it, it depends?
Mike: I don’t know if it’s an it depends. I mean, obviously, it depends, but I think the issue is like there are certain pieces of it that I’d really like to have in place for teams. I’ve had a couple of conversations lately with companies that have teams and I know that they want to add multiple people in, and it sort of supports that right now, but it’s not a great experience.
I’m just curious or I question how interested they’ll be once they see how it actually works versus what their expectations may be, and it could be just like by the time I get them to the point where they’re signed on, and on-boarded, then I’ve got that stuff in place, and it doesn’t matter, but I don’t necessarily want to churn them out before then either, do you know what I mean?
Rob: Yup, I totally do. So if this happens, keeping this goal, do you feel like it’ll be in the last couple months of the year?
Mike: Yeah. I mean, I definitely think that it’s going to be a later rather than sooner thing. The other thing is like summer right now, so I don’t expect a whole lot of it, a lot of Bluetick to be sold over the next couple of months. But once the end of August hits, I would expect things to kind of start ramping up again.
It’s also like, because it’s summer though, and I know that companies feel like the summer kind of trends downward, email follow up––interest in it might go up, because they know that they’re going to have to follow up with people more, so it may save them time. I’m not sure. It’s hard to say.
Rob: It was interesting. What I was seeing seasonally with really most of my apps, that include SaaS, and non-SaaS that I’ve owned is certainly December tends to be a train wreck, with one time purchase software, it would plummet. I remember doing an invoice plummeting like 80%.
Not every December, but there were months when it would do 1/5 of the revenue that it had done in November. But SaaS apps tend to be pretty flat in December unless you specifically get around that and do promotions and such. Then, right around tax time, it was either April or May, it would tend to not be great months.
I never noticed dips in the summer and what’s interesting is growing up in California, we really don’t have strong seasons. I mean, there’s rainy season and then there’s a lot of sun and there’s drought season, which typically in the last seven years. But, really like my work didn’t slow down in the summer like it does now that I live here, like living in Minneapolis, like I want to work a lot less, and you’ve talked about this, too.
It’s like if you live in a place where it’s snowy and the winter sucks, I feel like I get more work done in the winter, because I’m indoors and then less work done in the sunny times of the year. Whereas, again, in California, that just wasn’t the thing. We just kind of work year-round, because it was kind of the same.
I guess it depends on where your customers are coming from. I would not anticipate that the summer is going to be flat for your growth. I just don’t think. I think people are still doing business and they’re still thinking about it now. Certainly, if you have a lot of Europeans as your market and you’re looking to do something in August, I bet that month is terrible because I know a lot of folks go on month long vacations then, and there are other factors playing to it, but all of that said, I would not count on any growth in December for you.
Then, I think from now until, basically, Thanksgiving, which is the last week of November, I think you’ve got a pedal to the metal this time.
Mike: Cool, that’s comforting, I guess, but we’ll see how the actual numbers shake out. Predictions are worth what you paid for them, I guess.
Rob: Exactly. My next goal was to do at least three days of exercise per week. I have far exceeded that. I’m probably averaging five days a week, and when I was still working the day job I was hitting three then. Sometimes a day of exercise is like it’s 10 or 15 minutes.
It’s just what I can get and it might be a quick bike ride around the lake, which is like 3 miles, so it’s not the longest ride of all time or I’ll do like a 10 minute CrossFit thing, but just something to get the heart rate up, and that’s been going. So I feel like I probably need to, I don’t know if I want to increase this for next year, but definitely I’m meeting and exceeding that goal, and it feels good to do that.
This is the first year, probably, ever or I mean since college that I have consistently exercised.
Mike: Next one on my list was to read one business book at least every two weeks and I think at this point I actually might kill this one. I’ve only read a couple, but with my backing off of podcasts earlier in the year, I’ve been backing off of like just consumption of stuff in general, I don’t know if this is even realistic even if I were to try at this point, like I just don’t see it happening, so I think I want to kill this one.
Rob: I think it’s a good one. I would agree with you. I feel like it’s a distraction from your real goal, which is to stay physically healthy with exercise and to get your business to the place of profitability. Cool.
My last goal for 2018 was to ship something. I wrote a little paragraph in December when we originally talked about this and it said this, I’m not sure what it’s going to be yet, but I’ve been laying low for about 18 months, 2017 was supposed to be a rest year, and it was a hard year. So the first part of 2018 is going to continue to be rest, but I need to start shipping, either consistent blog posts, a book, a new podcast, of course, software or something.
I will say that Sherry and I shipped the entrepreneurs guide to keeping your shit together, which Sherry did the vast majority of the work on that, but I assisted with the launch, and the promotion, and writing the copy and writing emails and stuff like that to market it. In addition, we have a course that is coming out.
It’s actually a good time to talk about it actually. I haven’t talked about it yet on the podcast, but if you go to ZenFounder.com, one of the products under the how we help menu is founder family date night video course, and it’s a six-part video course. It’s 20 minutes to kind of get you in the mindset of something and then there’s a handout that you take and you’re supposed to go on a date with your significant other, it’s all about keeping you connected.
Founders don’t have a lot of time and don’t have a lot of head space in general to connect with the person that probably is the most important to them, their life partner, their significant other, and that’s what this course is designed to do is just shortcut that and give you pre-built stuff to go and have a conversation about different topics. If you’re interested in learning about that, you can always go and sign up for the ZenFounder mailing list, and we’ll be selling that probably in the next few weeks, I believe.
I was involved to filming, there was a half day or full day of filming, and then I’ve been involved honing the landing page and the copy stuff. It definitely feels like I am keeping busy. It feels good, so I don’t know. I guess the verdict is out. I feel like those count towards this goal of shipping something in quotes to kind of ramp up, and I’m guessing in 2019 I’ll need to be a little more specific and perhaps a little more ambitious with this one.
Mike: The other goals on my list, the first one was hire somebody to take over Bluetick development, and the second one was to speak at six plus conferences or events this coming year. I’ve spoken at two so far. I’ve not reached out to people to expand my profile or whatever to get on the docket for different speaking engagements, so I’m not sure how that one is going to turn out, so we’ll kind of see how that plays out.
But the other one for hiring somebody to take over Bluetick development, I’m wondering if I should actually change this from Bluetick development to implementing certain marketing strategies, because I think at this point I don’t think that I could hire somebody at the level that I need to take over Bluetick development.
I just don’t think that I could afford it. I do think that I could outsource certain parts of like marketing, sort of like different marketing campaigns, for example like, “Hey, I need this to be done and these are the things that…” like scope out what needs to get done, and then hire somebody to do them.
When I had, for example, all of the copy rewritten for the website, that was something that was a lot easier to outsource, because it was skilled labor, but it needed to get done, and it was an expertise that was, I’ll say somewhat unfamiliar to me, and it was easier to just hand it off to somebody else versus with the Bluetick development, there’s a lot of stuff there and it’d be, I think, really hard it and really expensive to hire somebody. I don’t know that given where I’m at and my goals for making it profitable by the end of the year, I don’t think that I could get there, not without funding, for example.
Rob: What was the mindset behind that goal?
Mike: It was to allow me to do the marketing. That was it. It was because I needed time to do the marketing and the development stuff needed to get to a certain point and it is, I would say, that it’s not necessarily too far off. There’s a few, I’d say, two or three major things that need to get done in terms of development and then I could probably push much more harder on the marketing side of things.
I don’t know, it’s a balancing act, I’ll say, do you know what I mean? Because like I said there’s just tons of code there and it’s all in different technologies and it’s just hard to find somebody who’s familiar with most of them.
Rob: Yeah, it always is. I mean, it’s always a balancing act, like you’re saying. That’s like the struggle of starting up from a standing stop and trying to get something to the point that is profitable. These are definitely the hardest and most uncertain time, so you may adjust that goal then is to hire someone to help take over other stuff.
Mike: Yup.
Rob: Cool. Well, now that we’ve done that, we’ll probably visit these again in three or four months. Let’s dive into a few listener questions. Our first voicemail is actually a listener success story.
Kevin: Mike and Rob, Kevin Wagstaff here from Spectora. I wanted to call in and give you guys a long overdue thank you. We have taken our company Spectora as a bootstrap startup from zero to 40 MRR in 16 months. We launched January 2017 after many months of listening to every single one of your podcasts and we have come out the gate screaming, so we’ve had ton of success I wanted to share with you guys. I hope to be on your success stories at some point and may be even be on the show. We’ve learned so much from you, thanks.
Mike: Congratulations to Kevin. That’s awesome news that you’ve gotten that far with Spectora in such a short amount of time. It sounds like you’ve really gotten a lot of value out of the podcast and really appreciate you just ringing back and letting us know that you’ve been able to take your business to the next level because of it.
Rob: Yeah, that’s awesome to hear. Just one note there, he said zero to 40 MRR, obviously, that meant 40,000, so that’s a perfect bootstrap startup to do that in 16 months, it’s pretty sweet. They’re in, it looks like, home inspections software space, which I’m imagining could be both challenging, but also a challenging vertical, would also one that if you got in there and you become kind of the name, it would be really, really hard to topple you from that.
The next question is actually a comment from Matthias Bedard from SWAAAP.com. It looks like SWAAAP has three A’s, SWAAAP.com.
He says, “Hey, Rob. I’ve thought I’d reach out and congratulate you on the Drip acquisition and your current unemployed status. I was listening to your parents on the Rogue Startups podcast, that was on a couple weeks ago, and I found your take on micro fundraising interesting, since that’s more or less what we have done. It’s cool because we’ve been able to maintain control on most of the company, but we have had to put in a lot of our own money, spent a lot of time applying for government grants, and take on a lot of side projects to keep the lights on. In the end I’m glad we took the route we took. We’ve definitely learned a lot doing so. I treasure the learning experience, but I think if we had an investor or someone on board with more knowledge of the SaaS base, and monetization strategies, we could have moved faster and take more advantage of some of the tech we’ve built, like our event matchmaking platform. I’m also an avid listener of Startups For the Rest of Us. I just want to say I really appreciate that you guys take the time to throw a bit of your knowledge out every week, cheers.”
It sounds like they didn’t take funding, but they wish they had that he feels like it would have kept them from having to do the side projects, the government grants, and, basically, they said they had to put a lot of their own money into it. It’s an interesting take on it.
Mike: Well, that’s always the trade-off, like if you take money, then you don’t have to do those things, but you also are going to have to give up some or probably more control of the company, so it’s just a matter of like how much you’re willing to give up, and sacrifice in exchange for that equity.
Rob: Our next question is a voicemail from a longtime listener and a question asker, his name is Owen, and we’ll roll that right here.
Owen: Hey, Rob and Mike, this is Owen from Bitesize Irish Gaelic. I’m a long-time listener, so I have to start by saying thanks so much for all of the information, and knowledge, and opinions that you have shared over the years.
I remember Rob talking about thinking about doing something different after HitTail, I think, and then it turned out to be Drip, and then it turned out to be selling Drip after growing it, and ending your time there, Rob. It was really cool to follow that whole journey, so thanks for sharing it along the way.
My question is, I have what you would say is against wisdom, it’s a B2C SaaS app for learning the Irish language. We tag people outside of Ireland, so they’re the people who emotionally want to make a connection to their Irish heritage by learning to speak some of that language. There are local groups that get together. They have immersion weekends, yearly events in different places.
My question is how would you think about trying to tap into those audiences to get our app in front of those people? Like, probably, I’m thinking sponsoring an event and getting our logo displayed just wouldn’t do anything. The one idea I did have was asking the organizers to send a direct email to attendees and offer some kind of discount for our app that they could click through. Anyway, if you have any thoughts, ideas, I’d appreciate it, and thanks a lot for your time, anyway, see you.
Mike: I have a bunch of thoughts on this, so there’s two answers to this. First one is a general thing that says that if you’re going to try and market at an event or sponsor an event that you’re not attending, it’s probably not going to work. I say that in reference more to larger events, so if you’re talking 100 to 200 people or larger than that, it’s probably not going to get you nearly as much as if you were to attend it.
But it sounds like Owen is after from the sounds of it like an immersion weekend where it’s probably not a huge number of people. You’re probably talking less than 50 and I think in those cases what you could do is you could approach the organizer and say, “Hey, I’ve got this workshop in a box that you could give to everybody there.”
Take an hour to go through and give them all of the materials for it, and then see if they’ll go through that workshop as part of like whatever your sponsorship is for the immersion weekend. From there, once the people are done with that workshop, then, you give them a handout of like, “Hey, here’s a coupon code that you can go and sign up for this if you’re interested in hearing more about it.”
That way they get to experience it and somebody is personally delivering it and that person is not you, but I think that you have to do a really good job about that, Bitesize Irish Gaelic in a box thing that you send to them. I wouldn’t shy away from sending them something physical, where they’ve got handouts and things like that, and just ask them, “Hey, how many people do you have?”
That can be part of what you’re doing as sponsorship, because when they walk away from the event with something in their hand, they’re much more likely to be interested and they have that thing that they can always reference as opposed to something when it gets sent in an email, which may easily get lost or overlooked, but it avoids the spam filters as well.
That’s probably my advice for something like that. Generally speaking though, sponsoring an event from afar isn’t something that generally works, but I was a member of Friends of Redgate program for a while.
One of the things that they did was they would send their Friends of Redgate around in exchange for giving them free software they would have them do demos essentially on their behalf. It worked out well in both directions, but it got them the marketing experience or the marketing exposure that they needed to smaller groups by having somebody just do the demo, and that person-to-person interaction is really the key.
Rob: That’s what I was thinking. If you could find a way that the organizer or someone there could do a demo and if you sponsor the food that they eat or whatever, even whatever amount of money you decide, it’s worth to test out. You have them do a demo and I guess the trouble there is if you think they’re not going to do a good job of it, then maybe you have to record your 60-minute Screencast commercial in essence that they play it at the beginning, and then they do get something. I like getting mentioned in the email, so that it’ll remind them, as Mike said, it could go in spam filters or could get misplace, but I think it’s the multiple touch points.
You want to get mentioned at the start. You then want to have that software somehow demoed, so people can get their heads around it, because typically most non-techies struggle to understand how software is going to help them and so seeing how easy it is or seeing what it actually does I think would be the game changer, and I think if you can’t get a demo, and like you said if you just get your logo somewhere or you just get a screenshot, I don’t think it’s worth even a small amount of money to do it, but getting the software working in front of them, I think, is a much bigger deal.
Mike: Well, that’s why I said the workshop in a box thing, because if it’s like an immersion weekend, you’re not guaranteed to have an internet connection either. So by having it there, it gets around that, and then if you give them a video file that they can play it locally through an iPad or a laptop or something like that, then that gets around to any internet connectivity problems that you might have.
I also wouldn’t go with like an hour-long demo. I might do five minutes to open like a video and you talking about it, and then have the organizers essentially manage the rest of it for whatever it is like half hour or 45 minutes or something like that. But it really has to be the right event for that kind of thing. I think it’d be hard to do it if it was immersion weekend for some other language or something like that, I think it would be tough.
Rob: I like your idea. I think that workshop in a box is a really savvy approach. Our last question for the day is about the IP of feature requests, IP standing for intellectual property. It’s from Scott and he says, “Can you guys talk about accepting feature requests from users of SaaS apps? Are there any IP concerns or something we should add in our terms of service to cover feature requests and ideas submitted by users?” What do you think, Mike?
Mike: That is a really good question and I’m not a lawyer, so I don’t know. I don’t know, I would think like having an idea for something that should be added to a product is not something you could ever ask them to put in there and then have any expectation that they’re going to do it, and that you would own it, because it was your idea.
It seems to me like that’s a foregone conclusion, but maybe there’s something in most Terms of Service that say specifically that ideas submitted are not subject to that, and you’ll get no compensation for them. I don’t know, it’s not something I’ve really given a lot of thought to.
Rob: I’m also not a lawyer, but I’ve never seen anything like that. I’ve never noticed anything like that in terms of service and I haven’t read a lot of them, but I read enough terms of service, when I’ve had lawyers draw them up for me that I’ve never noticed that offhand. You could certainly just go to a big company, look at GitHub or Dropboxes or Leadpages or Drip’s terms of service, because they have big legal teams who draft these things up.
If there’s no precedent for anyone ever suing and somehow taking ownership of an idea they sent you or posted on some board, then there probably isn’t anything in this terms of service, and you’re probably fine.
Also if you wanted to throw one sentence in, just like any feature requests or ideas submitted become the property of us, you could do that. I want to say I’ve never heard of anyone being sued over something like this or even it being an issue where people requesting things feel like they own the idea or something. I don’t know, I’ve just never thought about it in all honesty.
Mike: I think that about wraps us up for the day. If you have a question for us, you can call it into 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 Out of Control by MoOt” used under Creative Commons. Subscribe to us on iTunes by searching for startups, and visit startupsfortherestofus.com for full transcript of each episode. Thanks for listening and we’ll see you next time.
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 Rob.
Mike: I’m Mike.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, sir?
Mike: Well, I recorded a video this morning for Bluetick with somebody who’s starting a partner program and we basically walked through a process for doing LinkedIn prospecting and then feeding the prospects into Bluetick to do the email follow ups and get people onto a scheduled call, which is kind of the whole premise or at least the starting point for where Bluetick really started anyway. It’s good to see that it’s making, I’ll say, not really making a name for itself, but it’s going to be getting out there into much more people’s hands.
Rob: Do you consider Bluetick more of a cold email tool or a warm email tool?
Mike: A warm email. It does work for cold email, but cold email is basically a subset of warm email, so really like with cold email you’re just trying to make that initial contact and there’s lots of companies out there that do.
But, typically, once you’ve gotten them to reply, then they are completely hands-off, whereas, with Bluetick I’m trying to do a lot of things to structure it such that it will help you manage the conversation moving from the point where you’ve initially made contact, all the way up to the point where they become a customer, and then even after they’ve become a customer, still managing some of that sales communication, the upsells and things like that or even if somebody stops becoming a customer, you can add them into an email sequence that’s like an offboarding email sequence, for example, and feed that information back into the system, so that’s the general direction, I’ll say.
Rob: For sure. Cool. From my end, I have a couple of more podcast recommendations that came to us via Twitter and our comment thread for episode 395. Then, I have a couple of books I want to talk about that I have attempted to or have been listening to.
The two podcasts that came through, one is from Josh Duty and he is a longtime listener and MicroConf attendee, and he talked about EconTalk, which is a podcast I’ve never heard of.
He said it’s a must listen podcast for your list. I’ve listened to every episode and it’s probably the single most valuable intellectual resource I found. It’s great for understanding economics, but he’s branched out to interviews and lots of other areas over the past years. I can’t recommend it enough, so interesting podcasts. I’ll certainly add it to my list and listen to a few episodes and see if it strikes my fancy.
The other podcast is called Exponent and it’s recommended by Joe Hopkins. He says, “Hey, Rob and Mike, thanks for sharing your podcast list. You might like Exponent by Ben Thompson, the creator of the Stratechery blog,” I like the blog a lot. “It explores the business models and strategies of major tech players like Google, Apple, Uber, Facebook. Somewhat contrary, but provides a different point of view, more well-thought-out point of view than a lot of media.”
Those are two to potentially add to your podcatcher and then a couple of books that I’ve been listening to. One that I really like is called Bad Blood: Secrets and Lies in Silicon Valley and it’s the story of Theranos. Have you heard of Theranos, Mike?
Mike: Yes, I have.
Rob: So you know the story of how it imploded, so the author John Carreyrou is basically walking through the whole history and he interviewed a bunch of people and particularly got emails and he’s doing direct quotes. It kind of feels a little bit like a Nick Bilton, like a hatching Twitter or a book like that where week by week it tells the story.
The founder of Theranos, Elizabeth Holmes was like 19, maybe. She dropped out started when she was 19, but it was definitely in her early 20s and she had this youthful hubris, and so young, and so naïve, and she basically was like faking demos early on with this.
It was basically a patch that was supposed to take blood samples and look at stuff in the blood and the product never worked is an essence what, it sounds like, this book is saying. They would fake demos even to investors and they would fake demos to potential clients like Pfizer and these big drug companies.
It’s just mind-blowing, it’s like you just can’t do that, but it was like she had this reality distortion field they were saying she was trying to be Steve Jobs and she switched to kind of a wardrobe of wearing black turtlenecks, and she would bully her people, and they would just turn over constantly, turned over the entire senior leadership team over the course of a year. They turned over most of the employees and then they would just hire new ones.
It’s just this insane tale of like mismanagement hubris and thinking that the end justify the means and they would sue anyone. Like the employees would leave and then they would like sue them if they spoke out at all. It was like they were trying to keep everybody silent to the fact that this thing didn’t work.
Anyways, I’m probably 25% of the way in. It’s a really good story. It’s a little bit aggravating, because she thinks she’s Steve Jobs and that always pisses me off. It’s so irritating when people take that tact of like, “Well, he did it and so I can do it, too.” But it’s like, “Yeah, but it worked for him and you’re not going to be able to reproduce that.”
Anyways, it’s something that if you can stomach it, it’s kind of painful to listen to but if you can stomach it, it’s a really well told story.
Mike: Awesome. Yeah, I’ve seen them in the news quite a bit and, obviously, like all of the stuff that’s coming out after the fact, so I definitely kind of seen the inside scoop on some of that. I totally agree with you about people who are going out and thinking, “Oh, I’m going to be the next Steve Jobs and the end justify the means.”
That can be true to an extent, but you have to be successful at it, because if you’re not then the whole thing is going to implode, like there’s no way around that, like you’re really skating on thin ice, and you can’t violate the law when you’re doing that either, you just can’t.
Rob: That was a big problem and that’s the thing. It’s like when you look at someone like Steve Jobs who people say really was very hard to work with and he was a bully, and he just had all these really odd traits, but he figured out a way to make it work. One of the ways is that he was a deca millionaire by the time he was 21, and that kind of helped like they have that success with the Apple 1 and the Apple 2.
If you don’t have that, and you try to have this attitude, and you basically burn all of these bridges, and you burn out all of your people, and you burn your relationships like it just crumbles, and the odds of you then even achieving that first success just plummet in my opinion, so it’s a tough one.
The other book that I started reading or listening to and then just bailed on it, if anyone is considering reading this book, I really didn’t enjoy, it’s called Valley of the Gods: A Silicon Valley Story and it follows like three or four aspiring founders in a sense, but it really doesn’t.
I get the feeling the book really didn’t know what it was about. It was just kind of wandering and it talked about the Thiel Fellowship and then it talked about these founders doing stuff, and eventually I was just like, “I just don’t care about the people and I don’t care about the stories that are going on,” which is a bit disappointing because I loved these tales of startups but, again, if you’re going to come out listening to it, I would probably or reading it, I would probably recommend maybe skipping that one.
Something else I wanted to do today Mike is revisit our 2018 goals. It is approaching midway through the year and I think we talked about them back in maybe February or March. We have listener questions that we’re going to dive into, but I think it’s always helpful to kind of get status updates a couple times a year as we progress to figure out where are we with our goals, have our goals changed, and just trying to check where we’re at.
Mike: I guess I’ll kick things off, one of my carryover goals was logging at least 100 days worth of exercise this coming year and I’ll say the first couple of months I was a little lax just because I had a lot of things going on, but I am happy to say I think the last month I logged 13 days at the gym, so slowly getting up there. I think I’m a little bit behind right now. I’m thinking around 130 or so something like that.
It’s June now, by the end of June, I should be at 50, so if I did 20 days which is probably unlikely this month, just because I know I’m going to be gone for a week for family vacation. Then, I would get to about halfway, so I’m slightly behind, but I think that I’m definitely optimistic that I’ll be able to catch up and hit that goal this year.
Rob: Very cool. My first goal was to write a virtual reality program that allows me to roll around in a mattress of bitcoins. Wait, that was the goal that you set for me, remember that?
Mike: Yes, I do. How’s that coming, by the way?
Rob: I’ve not started doing that yet.
Mike: You’ve got seven more months.
Rob: I do. It’s not even going to be VR, it’s just going to be an R program, a reality program, where I actually roll on a mattress of bitcoins, a bunch of thumb drives. No, my first serious goal was to be in fewer meetings, under 10.
Mike: I think you cheated on this.
Rob: Under 10 hours a week.
Mike: You cheated.
Rob: I didn’t.
Mike: You cheated.
Rob: I did not know in December of 2017 what was going to happen in 2018, but I have nailed this one, Mike, just nailed it.
Mike: I’m sorry, man. You cheated.
Rob: No, man, I love it. I love it. So for those who aren’t understanding what we’re laughing about is by leaving Drip at the end of April, basically, I’m in almost no meetings now. This is probably the only recurring meeting I have on my calendar now as you and I recording, so I definitely achieved that. I’m looking forward to maintaining that through the rest of the year.
Mike: My other carryover goal was to make Bluetick profitable, including my time. So far I’m cautiously optimistic on this one, revenue has been going up, cleared kind of another hurdle this past month, so moving things forward.
I don’t know, I’ve got a couple of annual plans that I’ve sold as well, so those are definitely helpful in terms of the revenue. Like I said, I’ll keep people posted on it. I don’t know how much of the numbers I’m actually comfortable sharing at this point, but we’ll see. It’s something I kind of have to think about.
Rob: Do you feel like you’re on track for this by December or is it, it depends?
Mike: I don’t know if it’s an it depends. I mean, obviously, it depends, but I think the issue is like there are certain pieces of it that I’d really like to have in place for teams. I’ve had a couple of conversations lately with companies that have teams and I know that they want to add multiple people in, and it sort of supports that right now, but it’s not a great experience.
I’m just curious or I question how interested they’ll be once they see how it actually works versus what their expectations may be, and it could be just like by the time I get them to the point where they’re signed on, and on-boarded, then I’ve got that stuff in place, and it doesn’t matter, but I don’t necessarily want to churn them out before then either, do you know what I mean?
Rob: Yup, I totally do. So if this happens, keeping this goal, do you feel like it’ll be in the last couple months of the year?
Mike: Yeah. I mean, I definitely think that it’s going to be a later rather than sooner thing. The other thing is like summer right now, so I don’t expect a whole lot of it, a lot of Bluetick to be sold over the next couple of months. But once the end of August hits, I would expect things to kind of start ramping up again.
It’s also like, because it’s summer though, and I know that companies feel like the summer kind of trends downward, email follow up––interest in it might go up, because they know that they’re going to have to follow up with people more, so it may save them time. I’m not sure. It’s hard to say.
Rob: It was interesting. What I was seeing seasonally with really most of my apps, that include SaaS, and non-SaaS that I’ve owned is certainly December tends to be a train wreck, with one time purchase software, it would plummet. I remember doing an invoice plummeting like 80%.
Not every December, but there were months when it would do 1/5 of the revenue that it had done in November. But SaaS apps tend to be pretty flat in December unless you specifically get around that and do promotions and such. Then, right around tax time, it was either April or May, it would tend to not be great months.
I never noticed dips in the summer and what’s interesting is growing up in California, we really don’t have strong seasons. I mean, there’s rainy season and then there’s a lot of sun and there’s drought season, which typically in the last seven years. But, really like my work didn’t slow down in the summer like it does now that I live here, like living in Minneapolis, like I want to work a lot less, and you’ve talked about this, too.
It’s like if you live in a place where it’s snowy and the winter sucks, I feel like I get more work done in the winter, because I’m indoors and then less work done in the sunny times of the year. Whereas, again, in California, that just wasn’t the thing. We just kind of work year-round, because it was kind of the same.
I guess it depends on where your customers are coming from. I would not anticipate that the summer is going to be flat for your growth. I just don’t think. I think people are still doing business and they’re still thinking about it now. Certainly, if you have a lot of Europeans as your market and you’re looking to do something in August, I bet that month is terrible because I know a lot of folks go on month long vacations then, and there are other factors playing to it, but all of that said, I would not count on any growth in December for you.
Then, I think from now until, basically, Thanksgiving, which is the last week of November, I think you’ve got a pedal to the metal this time.
Mike: Cool, that’s comforting, I guess, but we’ll see how the actual numbers shake out. Predictions are worth what you paid for them, I guess.
Rob: Exactly. My next goal was to do at least three days of exercise per week. I have far exceeded that. I’m probably averaging five days a week, and when I was still working the day job I was hitting three then. Sometimes a day of exercise is like it’s 10 or 15 minutes.
It’s just what I can get and it might be a quick bike ride around the lake, which is like 3 miles, so it’s not the longest ride of all time or I’ll do like a 10 minute CrossFit thing, but just something to get the heart rate up, and that’s been going. So I feel like I probably need to, I don’t know if I want to increase this for next year, but definitely I’m meeting and exceeding that goal, and it feels good to do that.
This is the first year, probably, ever or I mean since college that I have consistently exercised.
Mike: Next one on my list was to read one business book at least every two weeks and I think at this point I actually might kill this one. I’ve only read a couple, but with my backing off of podcasts earlier in the year, I’ve been backing off of like just consumption of stuff in general, I don’t know if this is even realistic even if I were to try at this point, like I just don’t see it happening, so I think I want to kill this one.
Rob: I think it’s a good one. I would agree with you. I feel like it’s a distraction from your real goal, which is to stay physically healthy with exercise and to get your business to the place of profitability. Cool.
My last goal for 2018 was to ship something. I wrote a little paragraph in December when we originally talked about this and it said this, I’m not sure what it’s going to be yet, but I’ve been laying low for about 18 months, 2017 was supposed to be a rest year, and it was a hard year. So the first part of 2018 is going to continue to be rest, but I need to start shipping, either consistent blog posts, a book, a new podcast, of course, software or something.
I will say that Sherry and I shipped the entrepreneurs guide to keeping your shit together, which Sherry did the vast majority of the work on that, but I assisted with the launch, and the promotion, and writing the copy and writing emails and stuff like that to market it. In addition, we have a course that is coming out.
It’s actually a good time to talk about it actually. I haven’t talked about it yet on the podcast, but if you go to ZenFounder.com, one of the products under the how we help menu is founder family date night video course, and it’s a six-part video course. It’s 20 minutes to kind of get you in the mindset of something and then there’s a handout that you take and you’re supposed to go on a date with your significant other, it’s all about keeping you connected.
Founders don’t have a lot of time and don’t have a lot of head space in general to connect with the person that probably is the most important to them, their life partner, their significant other, and that’s what this course is designed to do is just shortcut that and give you pre-built stuff to go and have a conversation about different topics. If you’re interested in learning about that, you can always go and sign up for the ZenFounder mailing list, and we’ll be selling that probably in the next few weeks, I believe.
I was involved to filming, there was a half day or full day of filming, and then I’ve been involved honing the landing page and the copy stuff. It definitely feels like I am keeping busy. It feels good, so I don’t know. I guess the verdict is out. I feel like those count towards this goal of shipping something in quotes to kind of ramp up, and I’m guessing in 2019 I’ll need to be a little more specific and perhaps a little more ambitious with this one.
Mike: The other goals on my list, the first one was hire somebody to take over Bluetick development, and the second one was to speak at six plus conferences or events this coming year. I’ve spoken at two so far. I’ve not reached out to people to expand my profile or whatever to get on the docket for different speaking engagements, so I’m not sure how that one is going to turn out, so we’ll kind of see how that plays out.
But the other one for hiring somebody to take over Bluetick development, I’m wondering if I should actually change this from Bluetick development to implementing certain marketing strategies, because I think at this point I don’t think that I could hire somebody at the level that I need to take over Bluetick development.
I just don’t think that I could afford it. I do think that I could outsource certain parts of like marketing, sort of like different marketing campaigns, for example like, “Hey, I need this to be done and these are the things that…” like scope out what needs to get done, and then hire somebody to do them.
When I had, for example, all of the copy rewritten for the website, that was something that was a lot easier to outsource, because it was skilled labor, but it needed to get done, and it was an expertise that was, I’ll say somewhat unfamiliar to me, and it was easier to just hand it off to somebody else versus with the Bluetick development, there’s a lot of stuff there and it’d be, I think, really hard it and really expensive to hire somebody. I don’t know that given where I’m at and my goals for making it profitable by the end of the year, I don’t think that I could get there, not without funding, for example.
Rob: What was the mindset behind that goal?
Mike: It was to allow me to do the marketing. That was it. It was because I needed time to do the marketing and the development stuff needed to get to a certain point and it is, I would say, that it’s not necessarily too far off. There’s a few, I’d say, two or three major things that need to get done in terms of development and then I could probably push much more harder on the marketing side of things.
I don’t know, it’s a balancing act, I’ll say, do you know what I mean? Because like I said there’s just tons of code there and it’s all in different technologies and it’s just hard to find somebody who’s familiar with most of them.
Rob: Yeah, it always is. I mean, it’s always a balancing act, like you’re saying. That’s like the struggle of starting up from a standing stop and trying to get something to the point that is profitable. These are definitely the hardest and most uncertain time, so you may adjust that goal then is to hire someone to help take over other stuff.
Mike: Yup.
Rob: Cool. Well, now that we’ve done that, we’ll probably visit these again in three or four months. Let’s dive into a few listener questions. Our first voicemail is actually a listener success story.
Kevin: Mike and Rob, Kevin Wagstaff here from Spectora. I wanted to call in and give you guys a long overdue thank you. We have taken our company Spectora as a bootstrap startup from zero to 40 MRR in 16 months. We launched January 2017 after many months of listening to every single one of your podcasts and we have come out the gate screaming, so we’ve had ton of success I wanted to share with you guys. I hope to be on your success stories at some point and may be even be on the show. We’ve learned so much from you, thanks.
Mike: Congratulations to Kevin. That’s awesome news that you’ve gotten that far with Spectora in such a short amount of time. It sounds like you’ve really gotten a lot of value out of the podcast and really appreciate you just ringing back and letting us know that you’ve been able to take your business to the next level because of it.
Rob: Yeah, that’s awesome to hear. Just one note there, he said zero to 40 MRR, obviously, that meant 40,000, so that’s a perfect bootstrap startup to do that in 16 months, it’s pretty sweet. They’re in, it looks like, home inspections software space, which I’m imagining could be both challenging, but also a challenging vertical, would also one that if you got in there and you become kind of the name, it would be really, really hard to topple you from that.
The next question is actually a comment from Matthias Bedard from SWAAAP.com. It looks like SWAAAP has three A’s, SWAAAP.com.
He says, “Hey, Rob. I’ve thought I’d reach out and congratulate you on the Drip acquisition and your current unemployed status. I was listening to your parents on the Rogue Startups podcast, that was on a couple weeks ago, and I found your take on micro fundraising interesting, since that’s more or less what we have done. It’s cool because we’ve been able to maintain control on most of the company, but we have had to put in a lot of our own money, spent a lot of time applying for government grants, and take on a lot of side projects to keep the lights on. In the end I’m glad we took the route we took. We’ve definitely learned a lot doing so. I treasure the learning experience, but I think if we had an investor or someone on board with more knowledge of the SaaS base, and monetization strategies, we could have moved faster and take more advantage of some of the tech we’ve built, like our event matchmaking platform. I’m also an avid listener of Startups For the Rest of Us. I just want to say I really appreciate that you guys take the time to throw a bit of your knowledge out every week, cheers.”
It sounds like they didn’t take funding, but they wish they had that he feels like it would have kept them from having to do the side projects, the government grants, and, basically, they said they had to put a lot of their own money into it. It’s an interesting take on it.
Mike: Well, that’s always the trade-off, like if you take money, then you don’t have to do those things, but you also are going to have to give up some or probably more control of the company, so it’s just a matter of like how much you’re willing to give up, and sacrifice in exchange for that equity.
Rob: Our next question is a voicemail from a longtime listener and a question asker, his name is Owen, and we’ll roll that right here.
Owen: Hey, Rob and Mike, this is Owen from Bitesize Irish Gaelic. I’m a long-time listener, so I have to start by saying thanks so much for all of the information, and knowledge, and opinions that you have shared over the years.
I remember Rob talking about thinking about doing something different after HitTail, I think, and then it turned out to be Drip, and then it turned out to be selling Drip after growing it, and ending your time there, Rob. It was really cool to follow that whole journey, so thanks for sharing it along the way.
My question is, I have what you would say is against wisdom, it’s a B2C SaaS app for learning the Irish language. We tag people outside of Ireland, so they’re the people who emotionally want to make a connection to their Irish heritage by learning to speak some of that language. There are local groups that get together. They have immersion weekends, yearly events in different places.
My question is how would you think about trying to tap into those audiences to get our app in front of those people? Like, probably, I’m thinking sponsoring an event and getting our logo displayed just wouldn’t do anything. The one idea I did have was asking the organizers to send a direct email to attendees and offer some kind of discount for our app that they could click through. Anyway, if you have any thoughts, ideas, I’d appreciate it, and thanks a lot for your time, anyway, see you.
Mike: I have a bunch of thoughts on this, so there’s two answers to this. First one is a general thing that says that if you’re going to try and market at an event or sponsor an event that you’re not attending, it’s probably not going to work. I say that in reference more to larger events, so if you’re talking 100 to 200 people or larger than that, it’s probably not going to get you nearly as much as if you were to attend it.
But it sounds like Owen is after from the sounds of it like an immersion weekend where it’s probably not a huge number of people. You’re probably talking less than 50 and I think in those cases what you could do is you could approach the organizer and say, “Hey, I’ve got this workshop in a box that you could give to everybody there.”
Take an hour to go through and give them all of the materials for it, and then see if they’ll go through that workshop as part of like whatever your sponsorship is for the immersion weekend. From there, once the people are done with that workshop, then, you give them a handout of like, “Hey, here’s a coupon code that you can go and sign up for this if you’re interested in hearing more about it.”
That way they get to experience it and somebody is personally delivering it and that person is not you, but I think that you have to do a really good job about that, Bitesize Irish Gaelic in a box thing that you send to them. I wouldn’t shy away from sending them something physical, where they’ve got handouts and things like that, and just ask them, “Hey, how many people do you have?”
That can be part of what you’re doing as sponsorship, because when they walk away from the event with something in their hand, they’re much more likely to be interested and they have that thing that they can always reference as opposed to something when it gets sent in an email, which may easily get lost or overlooked, but it avoids the spam filters as well.
That’s probably my advice for something like that. Generally speaking though, sponsoring an event from afar isn’t something that generally works, but I was a member of Friends of Redgate program for a while.
One of the things that they did was they would send their Friends of Redgate around in exchange for giving them free software they would have them do demos essentially on their behalf. It worked out well in both directions, but it got them the marketing experience or the marketing exposure that they needed to smaller groups by having somebody just do the demo, and that person-to-person interaction is really the key.
Rob: That’s what I was thinking. If you could find a way that the organizer or someone there could do a demo and if you sponsor the food that they eat or whatever, even whatever amount of money you decide, it’s worth to test out. You have them do a demo and I guess the trouble there is if you think they’re not going to do a good job of it, then maybe you have to record your 60-minute Screencast commercial in essence that they play it at the beginning, and then they do get something. I like getting mentioned in the email, so that it’ll remind them, as Mike said, it could go in spam filters or could get misplace, but I think it’s the multiple touch points.
You want to get mentioned at the start. You then want to have that software somehow demoed, so people can get their heads around it, because typically most non-techies struggle to understand how software is going to help them and so seeing how easy it is or seeing what it actually does I think would be the game changer, and I think if you can’t get a demo, and like you said if you just get your logo somewhere or you just get a screenshot, I don’t think it’s worth even a small amount of money to do it, but getting the software working in front of them, I think, is a much bigger deal.
Mike: Well, that’s why I said the workshop in a box thing, because if it’s like an immersion weekend, you’re not guaranteed to have an internet connection either. So by having it there, it gets around that, and then if you give them a video file that they can play it locally through an iPad or a laptop or something like that, then that gets around to any internet connectivity problems that you might have.
I also wouldn’t go with like an hour-long demo. I might do five minutes to open like a video and you talking about it, and then have the organizers essentially manage the rest of it for whatever it is like half hour or 45 minutes or something like that. But it really has to be the right event for that kind of thing. I think it’d be hard to do it if it was immersion weekend for some other language or something like that, I think it would be tough.
Rob: I like your idea. I think that workshop in a box is a really savvy approach. Our last question for the day is about the IP of feature requests, IP standing for intellectual property. It’s from Scott and he says, “Can you guys talk about accepting feature requests from users of SaaS apps? Are there any IP concerns or something we should add in our terms of service to cover feature requests and ideas submitted by users?” What do you think, Mike?
Mike: That is a really good question and I’m not a lawyer, so I don’t know. I don’t know, I would think like having an idea for something that should be added to a product is not something you could ever ask them to put in there and then have any expectation that they’re going to do it, and that you would own it, because it was your idea.
It seems to me like that’s a foregone conclusion, but maybe there’s something in most Terms of Service that say specifically that ideas submitted are not subject to that, and you’ll get no compensation for them. I don’t know, it’s not something I’ve really given a lot of thought to.
Rob: I’m also not a lawyer, but I’ve never seen anything like that. I’ve never noticed anything like that in terms of service and I haven’t read a lot of them, but I read enough terms of service, when I’ve had lawyers draw them up for me that I’ve never noticed that offhand. You could certainly just go to a big company, look at GitHub or Dropboxes or Leadpages or Drip’s terms of service, because they have big legal teams who draft these things up.
If there’s no precedent for anyone ever suing and somehow taking ownership of an idea they sent you or posted on some board, then there probably isn’t anything in this terms of service, and you’re probably fine.
Also if you wanted to throw one sentence in, just like any feature requests or ideas submitted become the property of us, you could do that. I want to say I’ve never heard of anyone being sued over something like this or even it being an issue where people requesting things feel like they own the idea or something. I don’t know, I’ve just never thought about it in all honesty.
Mike: I think that about wraps us up for the day. If you have a question for us, you can call it into 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 Out of Control by MoOt” used under Creative Commons. Subscribe to us on iTunes by searching for startups, and visit startupsfortherestofus.com for full transcript of each episode. Thanks for listening and we’ll see you next time.
Episode 395 | 20 Podcasts We Like
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Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about the 20 podcasts they listen to. They separate the podcasts into three categories, bootstrapping, startups/business, and off topic/entertainment.
Items mentioned in this episode:
Podcasts mentioned:
- The Art of Product
- Build Your SaaS
- Bootstrapped Web
- Founder’s Journey
- Hooked on Product
- RogueStartups
- The Tropical MBA
- Indie Hackers
- ZenFounder
- This Week in Startups
- Startup
- Akimbo
- Stacking Benjamins
- Money For The Rest Of Us
- Planet Money
- Reply All
- Daily Tech Headlines
- Current Geek
- 99% Invisible
- System Mastery
Rob: In this episode of Startups For the Rest of Us, Mike and I talk about 20 podcasts we like. But first, I have a trivia question for you Mike. What color is Mace Windu’s lightsaber?
Mike: It’s purple isn’t it?
Rob: Nailed it. Nice. You are a Star Wars nerd, sir.
Mike: Thank you.
Rob: This is Startups For the Rest of Us episode 395. 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 Rob.
Mike: And I’m Nerdy Mike.
Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Nerdy Mike?
Mike: I almost got you laugh there. I almost got you to totally screw up.
Rob: You almost – to screw up the intro. The reason I ask that question is because A, I got it wrong when I came up on a trivia thing and both of my kids, my 11-year-old and 7-year-old, got it right. We’ve been watching the—I was going to say the Trilogy, but we’ve been watching Star Wars in machete order. So you go four five, two three, we’re about to hit six. I don’t know when we’re going to do Rogue One because it obviously fits between three and four, but you don’t want to watch it first because it’s not the early stuff.
Anyways, I’ve been immersed with Star Wars with the kids for the past couple of weeks. My 11-year-old is rewatching but the seven’s are basically seeing them for the first time. It’s been cool. It’s always fun to watch Star Wars with someone for the first time when they’re enjoying it. But aside from that, what’s going on with you?
Mike: Not much. I’ve got a couple of announcements to make. The first one is about Microcomp Europe. We’re going to be making some announcements in the next couple of weeks about when MicroConf Europe is going to be coming. If you want to hear more about that, make sure that you’re on the mailing list or you can go over to microconfeurope.com. Enter in your email address into the mailing list and if you’re not already added, you’ll be added into there. When you make the announcements in a couple of weeks, you’ll get the emails and start planning accordingly. We’re hoping to have the final location and dates nailed down hopefully in the next two weeks or so, but it’s just taking a little bit more time than we expected.
Rob: It always depends. It’s hard to find the right hotel in the right country on the right dates that don’t conflict with some major, major other event whether it’s another conference or a national holiday or something.
Mike: The other announcement is for MicroConf 2019, which will be in March of next year from the 24th to the 28th. The 24th, 25th, and 26th, that’s Sunday, Monday, Tuesday, that will be growth edition. Tuesday, Wednesday, Thursday is going to be starter editions, so the 26th, 27th, and 28th will be starter edition.
Rob: Mark your calendars. That will be in the Tropicana in Las Vegas. We’ll have tickets available for that. I don’t know. We haven’t talked about when we’re going to sell them but certainly prior to the end of the year, now that we know the location and all that stuff. On my end, I wanted to mention, I am getting probably five emails a day right now from apps saying, “We’ve updated our privacy policy for GDPR.” Are you getting the same crap?
Mike: Yes.
Rob: I’m deleting them all. I’m not even reading them. It’s irritating.
Mike: I want to send an email that says I’m not updating my privacy policy.
Rob: Hey, everybody, look at this. I’m not doing that.
Mike: It’s ridiculous.
Rob: Yes. Now that I’m seeing it, we’ve talked about that on the show a lot from the kind of company perspective, or the owner, the founder perspective. But now I’m seeing from the consumer perspective, and I hate it already. It’s annoying. People check in the box because they got to check the box.
Mike: Which is interesting because I also see emails from people who are talking about GDPR and it’s clear from the emails that they don’t completely understand what it is that they’re supposed to be doing. I’ve seen all these email coming through. There’s a general trend or thread that you can see, and someone is wrong. I’m not saying I’ve done the research to figure out exactly, and in certain situations whether the vast majority of people are right or the vast majority of the people are wrong, but there’s definitely variations between what some people are doing versus others. I don’t know. It’s totally screwed up and there’s no good answer for it.
Rob: Yes, for sure. On a lighter note, I had mentioned my brother was in town last week. When we were kids, we played obviously, the original Nintendo, the NAS. We played the SEGA Genesis System. He bought it when he was in college. This was the one with Sonic, Altered Beast, and some of those early SEGA classics. Once they got ahead of Nintendo if I recall, and this was the console that—they eventually lost the battle. There’s a good book about this. I wasn’t sure I figure out what the name of it is but it tells the inside story of all that.
When MicroConf Vegas is here, we gave away some of these classic consoles where you spend—it’s between $40-$100 and you can get an SNAS, or an NAS, or a SEGA Genesis System, and it comes with the games built in right on some hard drive. I noticed the SEGA Genesis was $40 on Amazon, so I just bought it while he’s in town, and I’m probably going to sell it on Amazon as a used console here in the next few weeks because I don’t really want to keep it. We had a blast, man.
We hung out a couple of the nights he was here. Just drank some whiskey and played Altered Beast and all the old games you remember from that era for hours and hours.
One thing I was disappointed with, the console’s fine. It’s pretty cheaply made. It’s not made by SEGA. It’s made by some third party and they threw on a bunch of games. They say it has 81 games but it’s really like 40 SEGA games and then 40 games that this company made in the past 10 years that are kind of garbage, so you don’t even play those. But what I did notice is that games like Altered Beast, and there’s couple of adventure games you used to be able to on the original SEGA continue forever and that’s how you would win it. You would just keep hitting start and you had infinite credits, but on this classic console, you don’t. You have two or three credits and once you’re done with it, you’re done.
It took all of the fun out of it because we couldn’t win any of the games. It’s pretty hard to do, but be we just aren’t in our peak chops for these games.
Mike: You’re losers.
Rob: I know. It’s funny though to realize that, “Oh, this isn’t,” I’m like tempted to go buy a real console. The old console you see them on eBay for $20 or $30, get the actual cartridge then you know that you’ll get the original experience. It’s just a bummer that they modified the original experience. I guess that’s how I feel. Why would they do that? Why would they change it from the way it was in the 90s.
Mike: I don’t know. It’s funny you’ve mentioned Altered Beast a couple of times, but I remember in college, there was a contest at the arcade at college where you could win the full version or the stand up version of the Altered Beast game, the arcade version. All you had to do is you had to get the highest score in a certain month. I went down there with a couple of dollars and a friend of mine, and ended up getting the high score and won it for—I spent less than $10 trying to win it.
Rob: That’s crazy for you. Few weeks ago, we had a question from a listener asking what podcasts we are listening to, and every so often, we do this. We probably do it once a year but we do it probably once every 18 months to 24 months because this change, I know it changes for me pretty frequently and it depends on the phase of the product I’m in, or the phase of the business. I know once we sold Drip, I just couldn’t listen to all the growth hacks anymore. It kind of killed me because I wasn’t in the midst of that anymore, so I had to just weed myself off of those.
Depending on what phase you’re at, it depends on what you don’t want to listen to. We picked our top 20 podcasts. We just grouped them into three different areas. We have the bootstrapping crew, we have the startups/business area, and we have off topic. We’re just going to run through these 20 and we’ll list them in the show notes as well. These are what I consider the highest quality and most relevant to our listeners.
There’s certainly some podcasts I listen to that are really infrequent and we exclude them from here. I also listen to a bunch of podcasts about tabletop gaming or role-playing games. Well, we could mention those. It’s probably not interesting to the majority of folks listening, so we won’t cover those. In no particular order, because we just went to our podcast feeds and send them in.
The first product is The Art of Product, and this obviously my Drip co-founder, Derrick, and Ben Orenstein who’s been a MicroConf speaker. They put together a really tight show where they just talk through the updates from the other person, what they’ve been doing in the last week and they’ve gone from—Derrick is working at Drip and Ben had a full time job. Ben went out on his own and did info products. Derrick left Drip and Ben got a full time job and they swapped. Then Ben left and he’s now doing a startup and Derrick’s doing his startup. Really interesting conversation from two smart people who are discussing topics that would be highly relevant to you as a listener of Startups For the Rest of Us.
Mike: The next one on the list is Bootstrapped Web from Brian Castle and Jordan Gal. Brian Castle runs Audience Ops. Jordan runs CartHook, and I think you’re an investor in CartHook as well, right?
Rob: Yes.
Mike: Those two have some really interesting stuff that they talk about. For obvious reasons, they don’t talk about everything that’s going on in their businesses, but it is a fascinating look at the stuff that they are working on. I really like hearing them talk about the stuff that they’re doing and the challenges they’ve run into. There’s just some fascinating topics that come up. Sometimes it’s just not even directly relevant to their business, or about technology, or marketing itself. Sometimes it’s just people management. How do you deal with different situations that come up, or how do you negotiate, or how do you solve a particular problem that was not your own like if somebody got dumped on your lap from some other vendor or partner of yours. How do you move forward from that? How do you recover from a fiasco that is largely out of your control.
Both of them are super sharp guys. I really like listening to them and hearing about it, and then just reconnecting with them. I used to work at MicroConf and Brian also runs a big Snowtime in Conf, so I usually see him when I go to that and it’s a winner as well.
Rob: I’ve been a long time listener of their podcast. I’ve been on on a couple of times, two or three times talking about stuff. Really, can’t recommend it enough. Again, heavy overlap in terms of concepts, topics, and really goals of what you and I espouse on this podcast.
Another podcast, I just recently started listening to it actually, is called Build Your SaaS, and it’s Justin Jackson and his co-founder of Transistor.fm, which is a podcast hosting company. It’s cool. It’s early stage stuff. They’re talking about their pricing. They’re talking about funding versus not and just talking about the two sides of it. I think it’s a fun romp. It’s always fun to hear Justin’s energy on their podcast and they do a good job with it.
Mike: Next one the the list id Rogue Startups from Dave Rodenbaugh and Craig Hewitt. Both of these guys have been long time MicroConf attendees. Craig used to headspoke at MicroConf Europe. I believe it was last year. Dave Rodenbaugh has given an attendee talk at MicroConf in Vegas as well. Dave has transitioned over the years from running just a series of WordPress businesses over onto his SaaS called Recapture. Craig Hewitt has been running Podcast Motor for a long time and he’s starting to branch out into other types of products in the podcasting space.
It’s just interesting hearing the journey over time and the different perspectives that they both bring to the table, partly because Craig moved over to Europe. He lives in France at this point. He Brought his family and two young kids over there. Some of the conversations talk about what it’s like to bring them over, and the differences in the school systems, and the challenges associated with going back and forth as a family, and how to integrate into the local culture and essentially run the business as a location independent business.
Rob: I’ve been a long time listener of Rogue Startups as well and a fan. Dave has multiple WordPress plugins, as well as Recapture.io, which is a small SaaS up he acquired. Craig Hewitt is running a couple of things but really past those is what I know he really focuses a lot of his time on which is podcast hosting. It’s kind of fun to hear their trials, tribulations, victories, and defeats, much in line with the stuff we talk about here.
Next podcast that I’ve enjoyed is Founder’s Journey, and this is from Josh Pigford at Baremetrics. He basically reads his blog post which I enjoy because I don’t read many blogs anymore. Really, I don’t read any blogs. I actually like that I’m able to kind of keep up with his thoughts on entrepreneurship and renting a relatively small startup without having to read text. I can do it while I’m running or riding my bike. It’s cool. It doesn’t have a regular publishing schedule but it’s short. When it comes out, it’s like 10 minutes. Since it is packing a blog post into that 10 minutes, it’s very compact. It feels like a 30-minute episode packed into 10 minutes, which is something I enjoy about it.
Mike: Next one on our list is the Tropical MBA from Dan and Ian. This is probably the single podcast I’ve listened to the longest. I’ve started to listen to it very early on when it came out. I’ve been listening to it for seven or eight years at this point. They have actually more episodes than Startups For the Rest of Us.
Rob: That is unfair.
Mike: I know. I think the thing that strikes me as interesting is that it feels to me like they’ve been on a parallel path with us, or we’ve been on a parallel path with them. Only they were aimed mainly at location independent entrepreneurs versus we focus much more on software entrepreneurs. Their ethos, ideas, and approach towards business really feels like it very much aligns with us. I think that’s why I’ve felt like it resonated so much with me. Dan and Ian had spoken at MicroConf in Europe. It was either 2013 or 2014, I forgot. It was in Prague. It was great to have them up there.
It was the only time we’ve ever had two people give a talk at MicroConf and it was fantastic. They fed off of each other really well and it looked like they rehearsed the entire thing. I imagine that they probably didn’t just because they have that natural interaction between each other that works really, really well. I think that’s part of why I like the podcast so much.
Rob: I’m with you. I’ve started listening really early on. I describe Tropical MBA as our sister podcast. I say that all the time. I feel like we’re two siblings, you know, they say sister cities, that kind of feels the same but in different places. It’s very similar in terms of, like you said, the ethos because it’s about building a life that you want and building a business to help you do that.
Their early focus was on location independence. They were in Bali, the Philippines, and other areas of the world, and you and I are on a different situation. We already had wives and kids when we started this podcast, and so we didn’t talk about the travel aspect of it, but we’re all talking about building a business to help you build a better life. I agree. I really can’t recommend Tropical MBA highly enough and as you mentioned, it’s one of the very few podcasts that has more episodes than we do.
Mike: I think they’re also one of the few people who’s taken over the Startups For the Rest of Us podcast as well. Do you remember the episode—it was the April 1st episode. We let them take over Startups For the Rest of Us and we took over the Tropical MBA for that one day. I think the only other time was when we had our wives come on and do the episode instead.
Rob: That’s right. We need to do another one of those at some point.
Mike: Yes, definitely.
Rob: That was fun. Cool. Our next podcast is a newer one. I think they only have 10 or 11 episodes. It’s called Hooked on Products, and it’s from Phil Derksen and John Turner. Also folks we’ve met through MicroConf long time, actually long time Micro Academy FounderCafe members. They’re hustling, they’re WordPress plugins, they’ve both gone independent at this point after a few years of building and acquiring products. It’s fun to listen to their interviews. Their origin stories are pretty cool. They just released how each of them got to where they are, and that is always fun for me to hear folks talk about that, because the founder’s story, it kind of never gets old hearing how founders got to where they are today.
Mike: The last podcast in our bootstrapping category is Indie Hackers which is run by Courtland Allen who does all the speaking and interviews, and then his brother Channing Allen does all the backend stuff for Indie Hackers. I find this fascinating just because he talks to people that are very early stage all the way up to they’ve sold their business and maybe they made millions of dollars from it.
You get this broad spectrum of people who are building profitable businesses, and you hear about the trials, the tribulations, and the things that have gone really well. You also hear about the things that did not go so well and the mistakes made along the way. I just love hearing that. All the different stories and things that people have run into, because if you’re working on your own business, you have this one view of the world and of your own business, but you don’t necessarily get that perspective that other people might have.
Hearing all those different stories gives you that perspective and makes you think about things that you might not otherwise have thought about that relate to your own business. Did you notice, by the way, in our bootstrapping section, every single person on this list who has those podcasts, all of them have been to MicroConf?
Rob: I know. I know, as we were saying this, I was like, “That’s interesting.” I don’t know why that is. I don’t know if it’s because we know them, I’m more interested in listening to their podcast, or if just people who are going to start a podcast in the space are naturally going to gravitate towards our community because it is their people in essence.
Mike: I don’t know. I’d have to think about that a little bit more, but I just find it interesting and looking at the list afterwards like, “Huh, every single person here, I’ve met them at MicroConf.”
Rob: Yes, that’s cool. Our next category is the startups/business category and this is podcasts that are focused on bootstrapping but they are still relevant to folks who listen to Startups For the Rest of Us.
The first is, if you’re not tired of hearing me every week on Startups For the Rest of Us, you should check out ZenFounder. It’s the other podcast that I co-host. I co-host this one with my wife, Dr. Sherry Walling, who is a clinical psychologist, and I think we’ve been doing this I think three, three and a half years now. It’s crazy to hear that it’s that long because I think we’re on episode in the 150, 160 range. It’s some really good stuff. The Founder Origin Stories have been a big hit where we’ve interviewed founders. Sherry doesn’t jus interview them about how they got there in their business but in their life. Like growing up, all the adversity they faced, how they got to where they are, and there are some amazing stories about folks who were in jail, folks who were almost killed, folks who lost parents, and about how that impacted who they are as a founder. ZenFounder.com or ZenFounder on iTunes if you haven’t checked about it. There are some good stuff coming out of there.
Mike: I definitely recommend ZenFounder as well. It’s been three years. I think it came out in 2015 and I still listen to it all the time. It’s one of those other ones that’s kind of made it into the—I use the app called Cast and it’s in the category called My Top Podcasts, which basically those at the front of the list out of all the other ones that I subscribe to.
Rob: Well, that’s cool. Thanks for the endorsement, sir.
Mike: the next one on our list is This Week in Startups. I started listening to this a while ago. This is run by Jason Calcanis. If you’re not familiar with him, he does a lot of angel investing and talks about startups in the Silicon Valley area. I found that I didn’t necessarily resonate with a lot of the things that were said, but I felt like I needed to be at least aware of the things that were going on. It’s not like being in the Valley is something that I’m really particularly interested in. I don’t want to go out and raise millions of dollars, but I also feel that I shouldn’t be completely ignorant of the things that go on and the types of stories that come out of those.
Obviously, funding works for some people and it doesn’t work for others. I can’t say that I would take that swing for the friends’ approach right now just because of the situation that I’m in, but I can certainly appreciate the value of raising a lot of money and doing something where you wouldn’t be able to do that without that funding, but not everybody can take those chances.
Some of the things that they talk about, I don’t necessarily agree with, but Jason’s definitely got a say something of an over the top attitude about—attitude probably is not the right word, but approach, I’ll say towards business. You should definitely do this. I think it’s just more of him being an extrovert than me being uncomfortable being an introvert.
Rob: Sure. Yes, he’s definitely opinionated. He’s a really smart guy and hard working as well. He kind of pulled himself up by his bootstraps from a very working class family. At first when I listened to it years ago, I was so irritated. I thought he was obnoxious and now, I realize he’s a smart dude who worked his ass off his whole life. I’ve come to respect his opinions. I find that I agree with him more often than not now. Not sure that I did the entire time that I listen to it, but when I disagree with him I can at least say, “Yeah, we just disagree and we see things differently,” kind of in my head. He has such a unique take on a lot of topics. That’s what I like to see. He kind of challenges some of my thinking and some of his guests do, as well.
There’s a really good episode, probably my top three episodes of this podcast are when he interviewed David Heinemeier Hansson, and they talked about funding and they go toe-to-toe, because DHH is very adamant one way and Calcanis really was just like, “Here are examples where that just wouldn’t have worked period.” I actually felt like Calcanis won the discussion. He had really good points about it.
The other one, I liked, Joel Spolsky, he’s been on there once or twice which was always fun because I’ve followed Joel for so long. And then, Chris Sacca did a two-part where he talked about all kinds of stuff. That’s what I like because I never would have followed or even been aware of Chris Sacca, but hearing Calcanis interview him made me think about things in a way that I have never done before. It kind of expanded my horizons.
That’s what I look for in This Week in Startups. I agree with you, a lot of the stuff on there. There’ll be interviews with someone doing some drones startup and I skipped those. I delete those because I just don’t have that much interest. But the news roundtable’s keeping me somewhat in touch with a world that, you’re right, is not our world because it’s more of the Silicon Valley startup, but it is tangentially related.
It’s certainly not a sister podcast, but maybe it’s like a second cousin. There’s something out there that I think is important for us to be abreast of given that we’re in technology.
Mike: It’s the long lost Uncle Joe who comes over and gets drunk and causes a raucous. If we’re talking family relationships, that’s probably it. I think your description of him of being opinionated is probably the one that is most in line with what I was thinking. I couldn’t come up with the right word, the right phrase, and also place the right amount of respect on him, it’s opinionated, it’s definitely it.
He does things and says stuff that I wouldn’t necessarily do myself but I can certainly appreciate the value of going through those steps towards building a business or putting your startup out there. I’m not going to say that it’s for me but that’s partly because, like I said, I’m an introvert and it’s just not for me. It’s not that it’s wrong, it’s just I wouldn’t probably approach it that way.
Rob: Right. And when we say opinionated, that’s not a negative thing. It just what it is. He has strong opinions and sometimes it can come off negative, but other times it’s like, “Wow, he’s really taking a stand here.” I appreciate that and respect that. Again. More often than not, I think he’s on the right track with what he’s thinking.
Our next podcast is really purely for entertainment so I debated whether to put it on here, but it’s kind of like you got to give a nod to Alex Blumberg. It’s StartUp and it is on Gimlet Media. It was Alex Blumberg’s podcast, but essentially, he left This American Life to do StartUp. The first season or two were phenomenal. The most recent seasons, two or three seasons have been less so. They’re interesting but they’re just following stories of stuff.
It’s like Planet Money for startups, but I struggle a little bit with the lack of reality. If you think This Week in Startups interviews a lot of people just raising $20 million, $30 million, at least that is actually happening. A lot of stuff Alex was looking at on the first couple of seasons at StartUp were such a beginner view of things which, I hate to say it that way, it sounds pejorative like I’m saying you should never be a beginner. But it sounds like it never examined the possibility of that bootstrapping or a small angel round is a totally viable option for most businesses. Maybe he wasn’t able to do that but it was never brought up.
It was kind of presented as, “Hey, if you want to start a company, you raise funds.” That really has been the message at the entire time. I don’t love that about it, and frankly I should probably write in or send something just to be like, “Hey, this is another take on it,” but all that to say, it’s entertaining and worth listening to, but I don’t think you can take any business lessons away from it.
Mike: I’m with you on that. I’ve felt the same way about it being and again, you used a phrase and you said, I don’t want to be pejorative about calling it very beginner focused or having that beginner view, because everybody’s got to start somewhere, but it felt like there was no research done to say what are the options here? It was just like, “Hey, go raise funding. This is what will make your business successful.” I don’t know. I listened to it for a while. I haven’t listened to the StartUp in quite some time actually, probably at least a year or so.
Rob: I don’t even remember what the prior season was. There’s one coming out right now that’s fine, but the one before it was okay. I don’t think you’re missing that much. Our last podcast for startups/business is Akimbo, it’s Seth Godin’s podcast. He had said for years he wasn’t doing a podcast because he just didn’t have the time. He has to be really choosy about his projects but he’s doing a podcast now. It comes out every week and he talks about a lot of stuff you’ve heard from him in his books and his talks and such, it’s solid. It’s not blowing my mind because I’ve heard a lot of this from him before because I’ve followed him for years.
I often find that he’s talking about a trend or an idea that I don’t know what to do with. All right, so you have a dip. So what? You know, there’s not enough detail or like, “Okay, culture changes and here’s how it is.” And it’s like, “Okay, so then what do I do with that?” That’s always been my struggle, but at the same time, Seth is a genius and Seth, he sees trends that others of us don’t see. He thinks and he talks about things in a way that most of us do not. I like it because it expands my mind and helps me think about things in a new way.
Mike: Bonus podcast here would also be Seth Godin’s Startup School. That’s a 15 episode podcast. He did it in the past. I think back in 2013 or so. It was an interesting look at the journey of entrepreneurship and all the different things that you could and should be thinking about when you’re trying to build a business. I think it was based off of—didn’t they have a group of people that went through, it was kind of a classroom or a little startup school as he put it, where they put people through this program and a lot of the things that come out of that, or clips from Q&A sessions with the people that were in there.
It’s fascinating to hear the types of questions that they come up with and then his off the cuff answers. Obviously, everything is edited, but still as you said, Seth’s a genius. He sees things that other people don’t and a lot of times, it’s stuff that is even just on the fly he sees it. It’s fascinating to kind of watch him work through something and bring you to a logical conclusion that is also correct and astounding that he came up with it on the spot.
Rob: And like you said, it was 15 episodes and it was done. It was back in 2013. It’s still on iTunes and you can listen to it. I should probably listen to it again because it’s been a few years, but I thought that was really well done.
So now we’re going to dive into our off topic podcast and we have a handful of them, seven or eight. These are things that we like to dig in to. The kind of nerdy pursuits or just edification. I listen to a number of personal finance investing podcasts because it’s always been a hobby. One all throughout there is called Stacking Benjamins, comes out three times a week. It’s got a big audience. They make it entertaining and kind of fun to think about. They look at the headlines. They interview somebody, and they have a discussion, and some trivia and stuff. If you’re into that kind of topic, if it’s a hobby, I think you should check it out and even if not, you can probably learn something about saving for retirement and some money tips and such.
Mike: The next one on the list is Planet Money. I got into this, I forgot how I ended up finding this one, but it’s an NPR podcast. They talk about all these different things related to money, whether it’s a class action lawsuits about civil rights cases, or they have one on called The Less Deadly Catch. The podcast traverses a lot of different business types, whether it’s the vodka industry, or Valentine’s Day, or Super Bowl, they look at money topics related to all different types of businesses, and they drill in specifically into particular problems.
Mostly episodes are pretty short. They’re anywhere between 15 and 25 minutes long. Some of them are a little bit longer than that. They talk about issues related to either having money available or how businesses make money, or things that you wouldn’t necessarily think are obvious. And because it’s an NPR podcast, they have the ability to do some investigative journalism and drill in to things that you would not normally learn about. They’ll send a reporter out to do interviews and find out information and they’ll interview people on the podcast.
Essentially, I find it just educational because there’s lots of business types that I’m not aware of. We’re in the SaaS industry or software industry, and you’ll hear about these things that, I think on the last episode they talked a little bit about Tree House Brewery near where I live and it’s a fascinating business model, but had I not been there, I would not have heard about it, but with Planet Money, you get to hear about those types of things.
Rob: Yes, and Planet Money is a spinoff of This American Life. They did that during a financial crisis. They did maybe a two-parter on what happened trying to unravel and explain, and it was so popular they decided to form an entire podcast and that’s when it started.
Mike: Got it. Yes, that must be where I heard it from.
Rob: My next podcast is another investing podcast. It’s called Money For The Rest of Us. Actually, when I stumbled upon it, I was emailed the guy, David Stein. I was like, “Hey, I run a podcast with a similar name.” He’s like, “I had no idea your podcast was out.” Because we were earlier, right? We’ve been since 2010 or 2011, and then I think his is maybe three years old. He’s like, “I’m so sorry. I hope you don’t feel like I took your thing.” He said he just came up with it out of his own head, so no hurt feelings.
If you go into iTunes and search for the rest of us, you’ll see buckets of podcasts with that name, so it’s not like something we own the trademark on it.
Mike: We don’t have a license to it. We did not trademark that.
Rob: Exactly.
Mike: That’s like a big mistake.
Rob: Exactly. But J, David Stein was an institutional money manager. He would advise these endowments and he would help them like colleges and universities. I think it was non-profits only and he would help just manage their money and keep the assets allocated. What I like about him is he’s super even keeled. He’s not sensationalist. He’s not saying, “Buy, buy, buy, sell, sell,” It’s all about asset allocation and big buckets. He’s very calculated and looks at a lot of indicators.
He says he invests at the leading edge of the present. He’s like, “I’m not guessing where the economy is going,” but he does move money in and out of these big asset classes based on, he sees that emerging markets are way overvalued and he’s probably going to eke a little money out of that. He’s pulled money out of that asset. He’s not trying to time the market per se, but like he said, he does at the leading edge of the present, so very smart guy.
The main podcast is good. It’s evergreen content. I don’t get a ton of value out of it. It’s just stuff to think about. His Money For The Rest of Us Plus which is the one you pay for, and it’s very inexpensive. I think it’s probably $20 a month or something like that, or $199 a year. It’s in that rance. In my opinion, is one of the most underpriced things that I pay for. I hope he’s not listening to this, but he could multiply the price by five and I would still pay for it because he gives his take on where the economy is. And it’s not just him making things up, he looks at PMI and all these data sources that he used as a professional money manager. It helps me think through, as I’m moving money in and out of things. I don’t necessarily do the exact thing that he’s doing but at least I have the context for it.
To me it’s more valuable than if I were to pay a money manager to actually be managing my money. He’s giving just tons of really solid information. In the financial investing space, he’s one of the people that I respect most.
Mike: You know what he should do is multiply his price by five and then grandfather people in. That should be your advice to him.
Rob: That should be as long as I get grandfathered, totally.
Mike: The next one on our list is The Daily Tech News. There’s also a spinoff of this to which I hadn’t actually been aware of that you had mentioned to me, which is called Daily Tech Headlines, which is a much shortened version of it. The Daily Tech Headlines is just the headlines themselves. The Daily Tech News Show, they go into the detail on each of the different headlines. I find that a lot of the discussions from The Daily Tech News Show very fascinating.
They have different people who come on and Tom Merritt kind of runs the show for the most part, and there’s different people that he brings on to have discussions about different topics on different days of the week. It comes out every single day. It is somewhat difficult to keep up with all the different discussions, but The Daily Tech Headlines is probably a better place if you just want to hear the headlines, and if you want to drill into those and hear a lot more detail about them, then you can go to The Daily Tech News Show.
Rob: The Daily Tech News Show is what, like 20-30 minutes?
Mike: Yes.
Rob: And The Daily Tech Headlines is four or five, and that’s why I switched. It is five days a week. I couldn’t keep up with the full discussion and I just backed off to the headlines and I’ve really enjoyed doing that. I’m the biggest fan of Tom Merritt. I respect the heck out of him as someone who just, he has opinions but he’s willing to have conversations about them. He’s very well-informed. He doesn’t make rash comments or extremist things in either direction. He’s always pretty even keeled and that’s what I respect about him. He worked with Leo Laporte at TWiT and then left to do his own thing with Daily Tech News Show.
Mike: I always liked how he can see both sides of the argument whether it’s talking about self-driving cars, for example, and what are the moral implications of those things. Not just around the classical question of who do you kill if there’s a mother and a baby in front of you and some construction workers to the side. The car is going to have to choose somebody, who do you choose? He can talk to those things but he can also talk about the fact that these self-driving cars are going to be putting people out of work, truck drivers, for example. And what are the implications of that not just on the economy but the moral implications moving forward.
He’s got very broad view. Like you said, I just respect his opinions on it and him being able to listen to those things and talk about them without necessarily coming down very hand-fisted on a particular point of view.
Rob: One of Tom Merritt’s other podcast that I enjoy is called CurrentGeek. It’s a weekly podcast that they used to do every week. We’ll look at the current weekend geek news, movies, and the light tech stuff. They recently, I think it’s every other week they do that, and now they’re watching some movies, some classic movies and talking about them which is still interesting. When I first heard that they were doing that, I was like, “Oh, no.” Tom and his co-hosts are so entertaining to listen to that I listen to those episodes as well, and then we’re going back and watching pilot episodes of things. They did pilot episodes of Lost in Space. They did Lost. They did Breaking Bad, and Seinfeld. It’s funny to hear them talk through. They do research on it and then they talk about the changes, and what went down. They don’t just talk about the show itself but a lot of the behind the scenes which is fun.
Mike: Next one on our off topic list is 99% invisible. I like this one because it doesn’t tell me anything about startups, or business, or anything like that, but it gives you insight on just interesting stories that you would otherwise have no idea that those things existed, or that somebody had even thought of them. One episode that sticks out of my mind is one where they talked about how buildings are made specifically for high rise buildings, hotels, and things like that. Like if you go to the stairwells, for example, they tend to be just like a giant cinder block. It’s almost like a chimney and their stairs metal is very barren. Almost every hotel that you go into, when you fo to the stairway, there’s nothing there. It doesn’t look pretty in any way, shape, or form. The reason is because they use those as fire escapes because they learned year and years ago that when buildings start to burn down, people need to get out. If those areas of the building catch on fire, people can’t get out. There’s building codes in place that they talked about. They just talk specifically about why those buildings are designed that way and structured that way, and it’s to clue you in. It’s just to help those people get out. Those are the last things of the building that will burn up giving people the most time to get out.
And then, there’s other things. There’s stairs that go nowhere that they’ll talk about or statues in a particular city. Again. It’s the things that you would not otherwise have any idea that they existed except for this podcast, goes out and drills into those things and talks about them. It’s just interesting stories. I use it for more entertainment value than anything else. It’s definitely one to check out if you’ve got some time. The episodes are very well done and very well researched.
Rob: Yes, that’s the thing. It’s an NPR podcast and it’s really well done. The title comes from, like you said, it’s things that most of us don’t think about. They’re kind of invisible to us.
Last three podcasts, I’ll run through quickly, really to do with an honorable mention. The first one is another Gimlet Media podcast called Reply All. I just heard an episode after StartUp at one point, recommended it and I’ve been really impressed with the hosts and the production value of it. It’s a podcast about—I cannot compare it to something.
It’s at a production level of a Planet Money or This American Life, but it’s dealing with more Internet, online stuff, online trends, and memes, and that kind of stuff in a pretty cool and interesting way.
The next podcast is Clay Collins’ podcast about cryptocurrency. It’s called The Flippening. He interview big players. He knows a bunch of the people in the space. It’s interesting to hear him talk to people who are pushing that whole space forward. If you’re already hearing about it, then you may want to avoid this one, but I think that Clay really has his finger on the pulse of where crypto is headed and I do believe that it’s around for long term.
The last one I just added, we we’re talking because I realized, the funniest podcast I listen to is called System Mastery. It’s vulgar as all heck. These two guys are cracking jokes. They will, week to week, I think the main feed is them reviewing old and even new roleplaying game manuals. They read through them and they talk about how the roles are good here and how they’re dumb here, but then they have all these feeds that they’ve combined into one. I hear System Mastery, which is them reviewing these role-playing systems. They also talk about, they do Expounded Universe where they read Star Wars expanded universe novels and they make fun of them because a lot of them are poorly written. They watch movies, which I think is called Movie Mastery. What’s funny is, I would say they make fun of them but they do it—when the movie’s good, they don’t just make fun of it. They talk about how much they like it, but they still do it in a humorous way.
For some reason, I have all that in one feed and I don’t know if that’s because I support them via Patreon or not. It’s either going to be your speed or it’s not because they use a lot of foul language but it’s also really funny. It’s funny if you’re a nerd and you get all their references because they make some deep, deep references. I really like what they’re putting together. I think most of it is improve, which is pretty impressive.
Those are our 20 or 21 podcast that we are liking these days.
Mike: I think that about wraps us up for the day. If you have a question for us, you can call it into our voice mail number, 1-888-801-9690, or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Out of Control by MoOt” used under Creative Commons. Subscribe to us on iTunes by searching for startups, and visit startupsfortherestofus.com for full transcript of each episode. Thanks for listening and we’ll see you next time.
Rob: Before we go, if you have a podcast you feel like should have made our list, please either email it in or post it to the comments of this episode, episode 395.
Mike: Rob, the interesting thing about recording this episode on the top 20 podcasts that we like is that, I actually stopped listening to podcasts about a month and a half ago.
Rob: Did you? You’re just cold turkey, just all of them.
Mike: It was mainly because what I realized was that as I would listen to podcasts when I was mowing the lawn, or when I was driving, or when I was going to the gym, what I realized was that it made me feel for the most part like I was still working. It just extended my workday especially with any of the podcasts that were about business, startups or anything like that. It just made me feel like I was working all the time.
Rob: Yes, because you’re thinking about work all the time. That makes a lot of sense. I’m glad I didn’t title the episode 20 podcasts we listen to. Podcast we like is accurate, right?
Mike: We, as in you.
Rob: Exactly. My guess is you’ll come back to them at some point, but I hear you. I don’t think that’s a bad thing to do for a season. I certainly have gone through spells where I have cut. I used to listen to 55 podcasts, not all of them get on every week, or whatever I called it way down. I was down to 10, and it was stuff like Daily Tech News Show that didn’t make me feel like I was working because it was more about entertainment and news. I had almost nothing in the startup space and then slowly, I kind of worked my way back into doing that. I think there’s a case to be made for both directions. I think you can swing too far with constantly shoving information in your head and not giving yourself space to feel like you can relax.
Mike: I think it’s also the ability to take a step back. I’ve noticed this in certain situations or certain times of the year where I will be heads down working and not really come up and look at the landscape from a broader perspective or a strategic view of things. If you’re always implementing things, you’re always working in the business, then you’re never necessarily doing the planning stages and looking at the big picture. The problem is I felt like I was getting too far into the weez with all the mechanics and the tactics, things like that, but never actually taking that step back to do any strategy and look at the bigger picture.
Rob: I agree. I think that you need quiet time to be able to do that. If you are busy, because you’re busy with your business, you’re helping with your wife’s business, watching the kids, doing all the stuff you have to do, if you don’t have time during the day to sit back and just think, I don’t disagree that dishwashing, mowing the lawn couldn’t be that time.
These days, I have time during my days now to do that. I’m sitting thinking during the day, so when I am doing dishes or mowing the lawn, I don’t want to keep thinking about stuff. I’m already doing some big picture thinking, so I think it’s kind of a phase you’re in.
The other thing too is a lot of podcasts, they aren’t that constructive. They aren’t necessarily pushing your thoughts or your business forward, whereas audiobooks could be. You can listen to fiction to make yourself feel like you’re really not working. Or some folks I know just go away from podcast and go audiobooks only because they an information dense resource.
Mike: That’s a big difference between something like an audiobook versus a podcast, whereas a podcast is much less directed and focused on a particular thing. You can get an idea of what a podcast is about from the title or from the description, but that doesn’t necessarily mean that it’s going to be helpful to you versus a book, where if you buy a book about a very particular topic like sales strategies, or how to use Facebook ads or something like that, it’s going to be very focused on that one thing that you intentionally and deliberately decided that you are going to learn more about versus a podcast, where you might pick up some things and you might not, but it’s probably not going to be terribly actionable versus something like a book or an instruction manual.
Rob: That totally makes sense.
Mike: The other thing is it kind of makes me think about the conversations we had on a podcast about the consumption versus production modes between people. Should we be making things or consuming, it’s hard to do both at the same time. Right now, I’m producing stuff so it’s hard for me to consume stuff at the same time. It just makes my brain go sideways a little bit I guess.
Rob: Big time. I put up a blog post at one point. It was producer versus consumer or something like that. If you Google that, you can find it. There’s a really good comment thread after I published it. It was a good conversation about this. What I proposed there, I don’t think I talked about phases. I said certain people produced a lot of stuff and certain people consume a lot of stuff, and what I’ve realized since then, it’s not people, it’s phases.
That’s what you’re talking about now. What I find is, when I’m done with a hurdle, let’s say I sold a business, or I’m done growing it, or whatever, then I want to consume a bunch of stuff because I’m trying to figure out what to do next and taking a lot of information helps. But as soon as you focus on the goal, because you know exactly what your goals are this year, right? You’re growing Bluetick and you’re doing it this way.
You don’t need a bunch of information. You just need that point in time learning. I’m going to do Facebook ads next week so I got to learn that—Boom, do it, launch it. You don’t want just a bunch of inputs about things that are going to distract you in essence.
Mike: I find that the podcasts in general are distracting because they’re making me think about things that are not nearly as relevant to me as I need them to be. It’s better if I just take that time to think about the business itself and what I’m going to do next versus what other people are doing in their own businesses. As entertaining as it is, it doesn’t actually help me.
Rob: That’s right. Cool, man. We should probably wrap this.
Mike: All right. Well, take it easy. Talk to you next time.
Rob: Peace out.
Mike: It’s purple isn’t it?
Rob: Nailed it. Nice. You are a Star Wars nerd, sir.
Mike: Thank you.
Rob: This is Startups For the Rest of Us episode 395. 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 Rob.
Mike: And I’m Nerdy Mike.
Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Nerdy Mike?
Mike: I almost got you laugh there. I almost got you to totally screw up.
Rob: You almost – to screw up the intro. The reason I ask that question is because A, I got it wrong when I came up on a trivia thing and both of my kids, my 11-year-old and 7-year-old, got it right. We’ve been watching the—I was going to say the Trilogy, but we’ve been watching Star Wars in machete order. So you go four five, two three, we’re about to hit six. I don’t know when we’re going to do Rogue One because it obviously fits between three and four, but you don’t want to watch it first because it’s not the early stuff.
Anyways, I’ve been immersed with Star Wars with the kids for the past couple of weeks. My 11-year-old is rewatching but the seven’s are basically seeing them for the first time. It’s been cool. It’s always fun to watch Star Wars with someone for the first time when they’re enjoying it. But aside from that, what’s going on with you?
Mike: Not much. I’ve got a couple of announcements to make. The first one is about Microcomp Europe. We’re going to be making some announcements in the next couple of weeks about when MicroConf Europe is going to be coming. If you want to hear more about that, make sure that you’re on the mailing list or you can go over to microconfeurope.com. Enter in your email address into the mailing list and if you’re not already added, you’ll be added into there. When you make the announcements in a couple of weeks, you’ll get the emails and start planning accordingly. We’re hoping to have the final location and dates nailed down hopefully in the next two weeks or so, but it’s just taking a little bit more time than we expected.
Rob: It always depends. It’s hard to find the right hotel in the right country on the right dates that don’t conflict with some major, major other event whether it’s another conference or a national holiday or something.
Mike: The other announcement is for MicroConf 2019, which will be in March of next year from the 24th to the 28th. The 24th, 25th, and 26th, that’s Sunday, Monday, Tuesday, that will be growth edition. Tuesday, Wednesday, Thursday is going to be starter editions, so the 26th, 27th, and 28th will be starter edition.
Rob: Mark your calendars. That will be in the Tropicana in Las Vegas. We’ll have tickets available for that. I don’t know. We haven’t talked about when we’re going to sell them but certainly prior to the end of the year, now that we know the location and all that stuff. On my end, I wanted to mention, I am getting probably five emails a day right now from apps saying, “We’ve updated our privacy policy for GDPR.” Are you getting the same crap?
Mike: Yes.
Rob: I’m deleting them all. I’m not even reading them. It’s irritating.
Mike: I want to send an email that says I’m not updating my privacy policy.
Rob: Hey, everybody, look at this. I’m not doing that.
Mike: It’s ridiculous.
Rob: Yes. Now that I’m seeing it, we’ve talked about that on the show a lot from the kind of company perspective, or the owner, the founder perspective. But now I’m seeing from the consumer perspective, and I hate it already. It’s annoying. People check in the box because they got to check the box.
Mike: Which is interesting because I also see emails from people who are talking about GDPR and it’s clear from the emails that they don’t completely understand what it is that they’re supposed to be doing. I’ve seen all these email coming through. There’s a general trend or thread that you can see, and someone is wrong. I’m not saying I’ve done the research to figure out exactly, and in certain situations whether the vast majority of people are right or the vast majority of the people are wrong, but there’s definitely variations between what some people are doing versus others. I don’t know. It’s totally screwed up and there’s no good answer for it.
Rob: Yes, for sure. On a lighter note, I had mentioned my brother was in town last week. When we were kids, we played obviously, the original Nintendo, the NAS. We played the SEGA Genesis System. He bought it when he was in college. This was the one with Sonic, Altered Beast, and some of those early SEGA classics. Once they got ahead of Nintendo if I recall, and this was the console that—they eventually lost the battle. There’s a good book about this. I wasn’t sure I figure out what the name of it is but it tells the inside story of all that.
When MicroConf Vegas is here, we gave away some of these classic consoles where you spend—it’s between $40-$100 and you can get an SNAS, or an NAS, or a SEGA Genesis System, and it comes with the games built in right on some hard drive. I noticed the SEGA Genesis was $40 on Amazon, so I just bought it while he’s in town, and I’m probably going to sell it on Amazon as a used console here in the next few weeks because I don’t really want to keep it. We had a blast, man.
We hung out a couple of the nights he was here. Just drank some whiskey and played Altered Beast and all the old games you remember from that era for hours and hours.
One thing I was disappointed with, the console’s fine. It’s pretty cheaply made. It’s not made by SEGA. It’s made by some third party and they threw on a bunch of games. They say it has 81 games but it’s really like 40 SEGA games and then 40 games that this company made in the past 10 years that are kind of garbage, so you don’t even play those. But what I did notice is that games like Altered Beast, and there’s couple of adventure games you used to be able to on the original SEGA continue forever and that’s how you would win it. You would just keep hitting start and you had infinite credits, but on this classic console, you don’t. You have two or three credits and once you’re done with it, you’re done.
It took all of the fun out of it because we couldn’t win any of the games. It’s pretty hard to do, but be we just aren’t in our peak chops for these games.
Mike: You’re losers.
Rob: I know. It’s funny though to realize that, “Oh, this isn’t,” I’m like tempted to go buy a real console. The old console you see them on eBay for $20 or $30, get the actual cartridge then you know that you’ll get the original experience. It’s just a bummer that they modified the original experience. I guess that’s how I feel. Why would they do that? Why would they change it from the way it was in the 90s.
Mike: I don’t know. It’s funny you’ve mentioned Altered Beast a couple of times, but I remember in college, there was a contest at the arcade at college where you could win the full version or the stand up version of the Altered Beast game, the arcade version. All you had to do is you had to get the highest score in a certain month. I went down there with a couple of dollars and a friend of mine, and ended up getting the high score and won it for—I spent less than $10 trying to win it.
Rob: That’s crazy for you. Few weeks ago, we had a question from a listener asking what podcasts we are listening to, and every so often, we do this. We probably do it once a year but we do it probably once every 18 months to 24 months because this change, I know it changes for me pretty frequently and it depends on the phase of the product I’m in, or the phase of the business. I know once we sold Drip, I just couldn’t listen to all the growth hacks anymore. It kind of killed me because I wasn’t in the midst of that anymore, so I had to just weed myself off of those.
Depending on what phase you’re at, it depends on what you don’t want to listen to. We picked our top 20 podcasts. We just grouped them into three different areas. We have the bootstrapping crew, we have the startups/business area, and we have off topic. We’re just going to run through these 20 and we’ll list them in the show notes as well. These are what I consider the highest quality and most relevant to our listeners.
There’s certainly some podcasts I listen to that are really infrequent and we exclude them from here. I also listen to a bunch of podcasts about tabletop gaming or role-playing games. Well, we could mention those. It’s probably not interesting to the majority of folks listening, so we won’t cover those. In no particular order, because we just went to our podcast feeds and send them in.
The first product is The Art of Product, and this obviously my Drip co-founder, Derrick, and Ben Orenstein who’s been a MicroConf speaker. They put together a really tight show where they just talk through the updates from the other person, what they’ve been doing in the last week and they’ve gone from—Derrick is working at Drip and Ben had a full time job. Ben went out on his own and did info products. Derrick left Drip and Ben got a full time job and they swapped. Then Ben left and he’s now doing a startup and Derrick’s doing his startup. Really interesting conversation from two smart people who are discussing topics that would be highly relevant to you as a listener of Startups For the Rest of Us.
Mike: The next one on the list is Bootstrapped Web from Brian Castle and Jordan Gal. Brian Castle runs Audience Ops. Jordan runs CartHook, and I think you’re an investor in CartHook as well, right?
Rob: Yes.
Mike: Those two have some really interesting stuff that they talk about. For obvious reasons, they don’t talk about everything that’s going on in their businesses, but it is a fascinating look at the stuff that they are working on. I really like hearing them talk about the stuff that they’re doing and the challenges they’ve run into. There’s just some fascinating topics that come up. Sometimes it’s just not even directly relevant to their business, or about technology, or marketing itself. Sometimes it’s just people management. How do you deal with different situations that come up, or how do you negotiate, or how do you solve a particular problem that was not your own like if somebody got dumped on your lap from some other vendor or partner of yours. How do you move forward from that? How do you recover from a fiasco that is largely out of your control.
Both of them are super sharp guys. I really like listening to them and hearing about it, and then just reconnecting with them. I used to work at MicroConf and Brian also runs a big Snowtime in Conf, so I usually see him when I go to that and it’s a winner as well.
Rob: I’ve been a long time listener of their podcast. I’ve been on on a couple of times, two or three times talking about stuff. Really, can’t recommend it enough. Again, heavy overlap in terms of concepts, topics, and really goals of what you and I espouse on this podcast.
Another podcast, I just recently started listening to it actually, is called Build Your SaaS, and it’s Justin Jackson and his co-founder of Transistor.fm, which is a podcast hosting company. It’s cool. It’s early stage stuff. They’re talking about their pricing. They’re talking about funding versus not and just talking about the two sides of it. I think it’s a fun romp. It’s always fun to hear Justin’s energy on their podcast and they do a good job with it.
Mike: Next one the the list id Rogue Startups from Dave Rodenbaugh and Craig Hewitt. Both of these guys have been long time MicroConf attendees. Craig used to headspoke at MicroConf Europe. I believe it was last year. Dave Rodenbaugh has given an attendee talk at MicroConf in Vegas as well. Dave has transitioned over the years from running just a series of WordPress businesses over onto his SaaS called Recapture. Craig Hewitt has been running Podcast Motor for a long time and he’s starting to branch out into other types of products in the podcasting space.
It’s just interesting hearing the journey over time and the different perspectives that they both bring to the table, partly because Craig moved over to Europe. He lives in France at this point. He Brought his family and two young kids over there. Some of the conversations talk about what it’s like to bring them over, and the differences in the school systems, and the challenges associated with going back and forth as a family, and how to integrate into the local culture and essentially run the business as a location independent business.
Rob: I’ve been a long time listener of Rogue Startups as well and a fan. Dave has multiple WordPress plugins, as well as Recapture.io, which is a small SaaS up he acquired. Craig Hewitt is running a couple of things but really past those is what I know he really focuses a lot of his time on which is podcast hosting. It’s kind of fun to hear their trials, tribulations, victories, and defeats, much in line with the stuff we talk about here.
Next podcast that I’ve enjoyed is Founder’s Journey, and this is from Josh Pigford at Baremetrics. He basically reads his blog post which I enjoy because I don’t read many blogs anymore. Really, I don’t read any blogs. I actually like that I’m able to kind of keep up with his thoughts on entrepreneurship and renting a relatively small startup without having to read text. I can do it while I’m running or riding my bike. It’s cool. It doesn’t have a regular publishing schedule but it’s short. When it comes out, it’s like 10 minutes. Since it is packing a blog post into that 10 minutes, it’s very compact. It feels like a 30-minute episode packed into 10 minutes, which is something I enjoy about it.
Mike: Next one on our list is the Tropical MBA from Dan and Ian. This is probably the single podcast I’ve listened to the longest. I’ve started to listen to it very early on when it came out. I’ve been listening to it for seven or eight years at this point. They have actually more episodes than Startups For the Rest of Us.
Rob: That is unfair.
Mike: I know. I think the thing that strikes me as interesting is that it feels to me like they’ve been on a parallel path with us, or we’ve been on a parallel path with them. Only they were aimed mainly at location independent entrepreneurs versus we focus much more on software entrepreneurs. Their ethos, ideas, and approach towards business really feels like it very much aligns with us. I think that’s why I’ve felt like it resonated so much with me. Dan and Ian had spoken at MicroConf in Europe. It was either 2013 or 2014, I forgot. It was in Prague. It was great to have them up there.
It was the only time we’ve ever had two people give a talk at MicroConf and it was fantastic. They fed off of each other really well and it looked like they rehearsed the entire thing. I imagine that they probably didn’t just because they have that natural interaction between each other that works really, really well. I think that’s part of why I like the podcast so much.
Rob: I’m with you. I’ve started listening really early on. I describe Tropical MBA as our sister podcast. I say that all the time. I feel like we’re two siblings, you know, they say sister cities, that kind of feels the same but in different places. It’s very similar in terms of, like you said, the ethos because it’s about building a life that you want and building a business to help you do that.
Their early focus was on location independence. They were in Bali, the Philippines, and other areas of the world, and you and I are on a different situation. We already had wives and kids when we started this podcast, and so we didn’t talk about the travel aspect of it, but we’re all talking about building a business to help you build a better life. I agree. I really can’t recommend Tropical MBA highly enough and as you mentioned, it’s one of the very few podcasts that has more episodes than we do.
Mike: I think they’re also one of the few people who’s taken over the Startups For the Rest of Us podcast as well. Do you remember the episode—it was the April 1st episode. We let them take over Startups For the Rest of Us and we took over the Tropical MBA for that one day. I think the only other time was when we had our wives come on and do the episode instead.
Rob: That’s right. We need to do another one of those at some point.
Mike: Yes, definitely.
Rob: That was fun. Cool. Our next podcast is a newer one. I think they only have 10 or 11 episodes. It’s called Hooked on Products, and it’s from Phil Derksen and John Turner. Also folks we’ve met through MicroConf long time, actually long time Micro Academy FounderCafe members. They’re hustling, they’re WordPress plugins, they’ve both gone independent at this point after a few years of building and acquiring products. It’s fun to listen to their interviews. Their origin stories are pretty cool. They just released how each of them got to where they are, and that is always fun for me to hear folks talk about that, because the founder’s story, it kind of never gets old hearing how founders got to where they are today.
Mike: The last podcast in our bootstrapping category is Indie Hackers which is run by Courtland Allen who does all the speaking and interviews, and then his brother Channing Allen does all the backend stuff for Indie Hackers. I find this fascinating just because he talks to people that are very early stage all the way up to they’ve sold their business and maybe they made millions of dollars from it.
You get this broad spectrum of people who are building profitable businesses, and you hear about the trials, the tribulations, and the things that have gone really well. You also hear about the things that did not go so well and the mistakes made along the way. I just love hearing that. All the different stories and things that people have run into, because if you’re working on your own business, you have this one view of the world and of your own business, but you don’t necessarily get that perspective that other people might have.
Hearing all those different stories gives you that perspective and makes you think about things that you might not otherwise have thought about that relate to your own business. Did you notice, by the way, in our bootstrapping section, every single person on this list who has those podcasts, all of them have been to MicroConf?
Rob: I know. I know, as we were saying this, I was like, “That’s interesting.” I don’t know why that is. I don’t know if it’s because we know them, I’m more interested in listening to their podcast, or if just people who are going to start a podcast in the space are naturally going to gravitate towards our community because it is their people in essence.
Mike: I don’t know. I’d have to think about that a little bit more, but I just find it interesting and looking at the list afterwards like, “Huh, every single person here, I’ve met them at MicroConf.”
Rob: Yes, that’s cool. Our next category is the startups/business category and this is podcasts that are focused on bootstrapping but they are still relevant to folks who listen to Startups For the Rest of Us.
The first is, if you’re not tired of hearing me every week on Startups For the Rest of Us, you should check out ZenFounder. It’s the other podcast that I co-host. I co-host this one with my wife, Dr. Sherry Walling, who is a clinical psychologist, and I think we’ve been doing this I think three, three and a half years now. It’s crazy to hear that it’s that long because I think we’re on episode in the 150, 160 range. It’s some really good stuff. The Founder Origin Stories have been a big hit where we’ve interviewed founders. Sherry doesn’t jus interview them about how they got there in their business but in their life. Like growing up, all the adversity they faced, how they got to where they are, and there are some amazing stories about folks who were in jail, folks who were almost killed, folks who lost parents, and about how that impacted who they are as a founder. ZenFounder.com or ZenFounder on iTunes if you haven’t checked about it. There are some good stuff coming out of there.
Mike: I definitely recommend ZenFounder as well. It’s been three years. I think it came out in 2015 and I still listen to it all the time. It’s one of those other ones that’s kind of made it into the—I use the app called Cast and it’s in the category called My Top Podcasts, which basically those at the front of the list out of all the other ones that I subscribe to.
Rob: Well, that’s cool. Thanks for the endorsement, sir.
Mike: the next one on our list is This Week in Startups. I started listening to this a while ago. This is run by Jason Calcanis. If you’re not familiar with him, he does a lot of angel investing and talks about startups in the Silicon Valley area. I found that I didn’t necessarily resonate with a lot of the things that were said, but I felt like I needed to be at least aware of the things that were going on. It’s not like being in the Valley is something that I’m really particularly interested in. I don’t want to go out and raise millions of dollars, but I also feel that I shouldn’t be completely ignorant of the things that go on and the types of stories that come out of those.
Obviously, funding works for some people and it doesn’t work for others. I can’t say that I would take that swing for the friends’ approach right now just because of the situation that I’m in, but I can certainly appreciate the value of raising a lot of money and doing something where you wouldn’t be able to do that without that funding, but not everybody can take those chances.
Some of the things that they talk about, I don’t necessarily agree with, but Jason’s definitely got a say something of an over the top attitude about—attitude probably is not the right word, but approach, I’ll say towards business. You should definitely do this. I think it’s just more of him being an extrovert than me being uncomfortable being an introvert.
Rob: Sure. Yes, he’s definitely opinionated. He’s a really smart guy and hard working as well. He kind of pulled himself up by his bootstraps from a very working class family. At first when I listened to it years ago, I was so irritated. I thought he was obnoxious and now, I realize he’s a smart dude who worked his ass off his whole life. I’ve come to respect his opinions. I find that I agree with him more often than not now. Not sure that I did the entire time that I listen to it, but when I disagree with him I can at least say, “Yeah, we just disagree and we see things differently,” kind of in my head. He has such a unique take on a lot of topics. That’s what I like to see. He kind of challenges some of my thinking and some of his guests do, as well.
There’s a really good episode, probably my top three episodes of this podcast are when he interviewed David Heinemeier Hansson, and they talked about funding and they go toe-to-toe, because DHH is very adamant one way and Calcanis really was just like, “Here are examples where that just wouldn’t have worked period.” I actually felt like Calcanis won the discussion. He had really good points about it.
The other one, I liked, Joel Spolsky, he’s been on there once or twice which was always fun because I’ve followed Joel for so long. And then, Chris Sacca did a two-part where he talked about all kinds of stuff. That’s what I like because I never would have followed or even been aware of Chris Sacca, but hearing Calcanis interview him made me think about things in a way that I have never done before. It kind of expanded my horizons.
That’s what I look for in This Week in Startups. I agree with you, a lot of the stuff on there. There’ll be interviews with someone doing some drones startup and I skipped those. I delete those because I just don’t have that much interest. But the news roundtable’s keeping me somewhat in touch with a world that, you’re right, is not our world because it’s more of the Silicon Valley startup, but it is tangentially related.
It’s certainly not a sister podcast, but maybe it’s like a second cousin. There’s something out there that I think is important for us to be abreast of given that we’re in technology.
Mike: It’s the long lost Uncle Joe who comes over and gets drunk and causes a raucous. If we’re talking family relationships, that’s probably it. I think your description of him of being opinionated is probably the one that is most in line with what I was thinking. I couldn’t come up with the right word, the right phrase, and also place the right amount of respect on him, it’s opinionated, it’s definitely it.
He does things and says stuff that I wouldn’t necessarily do myself but I can certainly appreciate the value of going through those steps towards building a business or putting your startup out there. I’m not going to say that it’s for me but that’s partly because, like I said, I’m an introvert and it’s just not for me. It’s not that it’s wrong, it’s just I wouldn’t probably approach it that way.
Rob: Right. And when we say opinionated, that’s not a negative thing. It just what it is. He has strong opinions and sometimes it can come off negative, but other times it’s like, “Wow, he’s really taking a stand here.” I appreciate that and respect that. Again. More often than not, I think he’s on the right track with what he’s thinking.
Our next podcast is really purely for entertainment so I debated whether to put it on here, but it’s kind of like you got to give a nod to Alex Blumberg. It’s StartUp and it is on Gimlet Media. It was Alex Blumberg’s podcast, but essentially, he left This American Life to do StartUp. The first season or two were phenomenal. The most recent seasons, two or three seasons have been less so. They’re interesting but they’re just following stories of stuff.
It’s like Planet Money for startups, but I struggle a little bit with the lack of reality. If you think This Week in Startups interviews a lot of people just raising $20 million, $30 million, at least that is actually happening. A lot of stuff Alex was looking at on the first couple of seasons at StartUp were such a beginner view of things which, I hate to say it that way, it sounds pejorative like I’m saying you should never be a beginner. But it sounds like it never examined the possibility of that bootstrapping or a small angel round is a totally viable option for most businesses. Maybe he wasn’t able to do that but it was never brought up.
It was kind of presented as, “Hey, if you want to start a company, you raise funds.” That really has been the message at the entire time. I don’t love that about it, and frankly I should probably write in or send something just to be like, “Hey, this is another take on it,” but all that to say, it’s entertaining and worth listening to, but I don’t think you can take any business lessons away from it.
Mike: I’m with you on that. I’ve felt the same way about it being and again, you used a phrase and you said, I don’t want to be pejorative about calling it very beginner focused or having that beginner view, because everybody’s got to start somewhere, but it felt like there was no research done to say what are the options here? It was just like, “Hey, go raise funding. This is what will make your business successful.” I don’t know. I listened to it for a while. I haven’t listened to the StartUp in quite some time actually, probably at least a year or so.
Rob: I don’t even remember what the prior season was. There’s one coming out right now that’s fine, but the one before it was okay. I don’t think you’re missing that much. Our last podcast for startups/business is Akimbo, it’s Seth Godin’s podcast. He had said for years he wasn’t doing a podcast because he just didn’t have the time. He has to be really choosy about his projects but he’s doing a podcast now. It comes out every week and he talks about a lot of stuff you’ve heard from him in his books and his talks and such, it’s solid. It’s not blowing my mind because I’ve heard a lot of this from him before because I’ve followed him for years.
I often find that he’s talking about a trend or an idea that I don’t know what to do with. All right, so you have a dip. So what? You know, there’s not enough detail or like, “Okay, culture changes and here’s how it is.” And it’s like, “Okay, so then what do I do with that?” That’s always been my struggle, but at the same time, Seth is a genius and Seth, he sees trends that others of us don’t see. He thinks and he talks about things in a way that most of us do not. I like it because it expands my mind and helps me think about things in a new way.
Mike: Bonus podcast here would also be Seth Godin’s Startup School. That’s a 15 episode podcast. He did it in the past. I think back in 2013 or so. It was an interesting look at the journey of entrepreneurship and all the different things that you could and should be thinking about when you’re trying to build a business. I think it was based off of—didn’t they have a group of people that went through, it was kind of a classroom or a little startup school as he put it, where they put people through this program and a lot of the things that come out of that, or clips from Q&A sessions with the people that were in there.
It’s fascinating to hear the types of questions that they come up with and then his off the cuff answers. Obviously, everything is edited, but still as you said, Seth’s a genius. He sees things that other people don’t and a lot of times, it’s stuff that is even just on the fly he sees it. It’s fascinating to kind of watch him work through something and bring you to a logical conclusion that is also correct and astounding that he came up with it on the spot.
Rob: And like you said, it was 15 episodes and it was done. It was back in 2013. It’s still on iTunes and you can listen to it. I should probably listen to it again because it’s been a few years, but I thought that was really well done.
So now we’re going to dive into our off topic podcast and we have a handful of them, seven or eight. These are things that we like to dig in to. The kind of nerdy pursuits or just edification. I listen to a number of personal finance investing podcasts because it’s always been a hobby. One all throughout there is called Stacking Benjamins, comes out three times a week. It’s got a big audience. They make it entertaining and kind of fun to think about. They look at the headlines. They interview somebody, and they have a discussion, and some trivia and stuff. If you’re into that kind of topic, if it’s a hobby, I think you should check it out and even if not, you can probably learn something about saving for retirement and some money tips and such.
Mike: The next one on the list is Planet Money. I got into this, I forgot how I ended up finding this one, but it’s an NPR podcast. They talk about all these different things related to money, whether it’s a class action lawsuits about civil rights cases, or they have one on called The Less Deadly Catch. The podcast traverses a lot of different business types, whether it’s the vodka industry, or Valentine’s Day, or Super Bowl, they look at money topics related to all different types of businesses, and they drill in specifically into particular problems.
Mostly episodes are pretty short. They’re anywhere between 15 and 25 minutes long. Some of them are a little bit longer than that. They talk about issues related to either having money available or how businesses make money, or things that you wouldn’t necessarily think are obvious. And because it’s an NPR podcast, they have the ability to do some investigative journalism and drill in to things that you would not normally learn about. They’ll send a reporter out to do interviews and find out information and they’ll interview people on the podcast.
Essentially, I find it just educational because there’s lots of business types that I’m not aware of. We’re in the SaaS industry or software industry, and you’ll hear about these things that, I think on the last episode they talked a little bit about Tree House Brewery near where I live and it’s a fascinating business model, but had I not been there, I would not have heard about it, but with Planet Money, you get to hear about those types of things.
Rob: Yes, and Planet Money is a spinoff of This American Life. They did that during a financial crisis. They did maybe a two-parter on what happened trying to unravel and explain, and it was so popular they decided to form an entire podcast and that’s when it started.
Mike: Got it. Yes, that must be where I heard it from.
Rob: My next podcast is another investing podcast. It’s called Money For The Rest of Us. Actually, when I stumbled upon it, I was emailed the guy, David Stein. I was like, “Hey, I run a podcast with a similar name.” He’s like, “I had no idea your podcast was out.” Because we were earlier, right? We’ve been since 2010 or 2011, and then I think his is maybe three years old. He’s like, “I’m so sorry. I hope you don’t feel like I took your thing.” He said he just came up with it out of his own head, so no hurt feelings.
If you go into iTunes and search for the rest of us, you’ll see buckets of podcasts with that name, so it’s not like something we own the trademark on it.
Mike: We don’t have a license to it. We did not trademark that.
Rob: Exactly.
Mike: That’s like a big mistake.
Rob: Exactly. But J, David Stein was an institutional money manager. He would advise these endowments and he would help them like colleges and universities. I think it was non-profits only and he would help just manage their money and keep the assets allocated. What I like about him is he’s super even keeled. He’s not sensationalist. He’s not saying, “Buy, buy, buy, sell, sell,” It’s all about asset allocation and big buckets. He’s very calculated and looks at a lot of indicators.
He says he invests at the leading edge of the present. He’s like, “I’m not guessing where the economy is going,” but he does move money in and out of these big asset classes based on, he sees that emerging markets are way overvalued and he’s probably going to eke a little money out of that. He’s pulled money out of that asset. He’s not trying to time the market per se, but like he said, he does at the leading edge of the present, so very smart guy.
The main podcast is good. It’s evergreen content. I don’t get a ton of value out of it. It’s just stuff to think about. His Money For The Rest of Us Plus which is the one you pay for, and it’s very inexpensive. I think it’s probably $20 a month or something like that, or $199 a year. It’s in that rance. In my opinion, is one of the most underpriced things that I pay for. I hope he’s not listening to this, but he could multiply the price by five and I would still pay for it because he gives his take on where the economy is. And it’s not just him making things up, he looks at PMI and all these data sources that he used as a professional money manager. It helps me think through, as I’m moving money in and out of things. I don’t necessarily do the exact thing that he’s doing but at least I have the context for it.
To me it’s more valuable than if I were to pay a money manager to actually be managing my money. He’s giving just tons of really solid information. In the financial investing space, he’s one of the people that I respect most.
Mike: You know what he should do is multiply his price by five and then grandfather people in. That should be your advice to him.
Rob: That should be as long as I get grandfathered, totally.
Mike: The next one on our list is The Daily Tech News. There’s also a spinoff of this to which I hadn’t actually been aware of that you had mentioned to me, which is called Daily Tech Headlines, which is a much shortened version of it. The Daily Tech Headlines is just the headlines themselves. The Daily Tech News Show, they go into the detail on each of the different headlines. I find that a lot of the discussions from The Daily Tech News Show very fascinating.
They have different people who come on and Tom Merritt kind of runs the show for the most part, and there’s different people that he brings on to have discussions about different topics on different days of the week. It comes out every single day. It is somewhat difficult to keep up with all the different discussions, but The Daily Tech Headlines is probably a better place if you just want to hear the headlines, and if you want to drill into those and hear a lot more detail about them, then you can go to The Daily Tech News Show.
Rob: The Daily Tech News Show is what, like 20-30 minutes?
Mike: Yes.
Rob: And The Daily Tech Headlines is four or five, and that’s why I switched. It is five days a week. I couldn’t keep up with the full discussion and I just backed off to the headlines and I’ve really enjoyed doing that. I’m the biggest fan of Tom Merritt. I respect the heck out of him as someone who just, he has opinions but he’s willing to have conversations about them. He’s very well-informed. He doesn’t make rash comments or extremist things in either direction. He’s always pretty even keeled and that’s what I respect about him. He worked with Leo Laporte at TWiT and then left to do his own thing with Daily Tech News Show.
Mike: I always liked how he can see both sides of the argument whether it’s talking about self-driving cars, for example, and what are the moral implications of those things. Not just around the classical question of who do you kill if there’s a mother and a baby in front of you and some construction workers to the side. The car is going to have to choose somebody, who do you choose? He can talk to those things but he can also talk about the fact that these self-driving cars are going to be putting people out of work, truck drivers, for example. And what are the implications of that not just on the economy but the moral implications moving forward.
He’s got very broad view. Like you said, I just respect his opinions on it and him being able to listen to those things and talk about them without necessarily coming down very hand-fisted on a particular point of view.
Rob: One of Tom Merritt’s other podcast that I enjoy is called CurrentGeek. It’s a weekly podcast that they used to do every week. We’ll look at the current weekend geek news, movies, and the light tech stuff. They recently, I think it’s every other week they do that, and now they’re watching some movies, some classic movies and talking about them which is still interesting. When I first heard that they were doing that, I was like, “Oh, no.” Tom and his co-hosts are so entertaining to listen to that I listen to those episodes as well, and then we’re going back and watching pilot episodes of things. They did pilot episodes of Lost in Space. They did Lost. They did Breaking Bad, and Seinfeld. It’s funny to hear them talk through. They do research on it and then they talk about the changes, and what went down. They don’t just talk about the show itself but a lot of the behind the scenes which is fun.
Mike: Next one on our off topic list is 99% invisible. I like this one because it doesn’t tell me anything about startups, or business, or anything like that, but it gives you insight on just interesting stories that you would otherwise have no idea that those things existed, or that somebody had even thought of them. One episode that sticks out of my mind is one where they talked about how buildings are made specifically for high rise buildings, hotels, and things like that. Like if you go to the stairwells, for example, they tend to be just like a giant cinder block. It’s almost like a chimney and their stairs metal is very barren. Almost every hotel that you go into, when you fo to the stairway, there’s nothing there. It doesn’t look pretty in any way, shape, or form. The reason is because they use those as fire escapes because they learned year and years ago that when buildings start to burn down, people need to get out. If those areas of the building catch on fire, people can’t get out. There’s building codes in place that they talked about. They just talk specifically about why those buildings are designed that way and structured that way, and it’s to clue you in. It’s just to help those people get out. Those are the last things of the building that will burn up giving people the most time to get out.
And then, there’s other things. There’s stairs that go nowhere that they’ll talk about or statues in a particular city. Again. It’s the things that you would not otherwise have any idea that they existed except for this podcast, goes out and drills into those things and talks about them. It’s just interesting stories. I use it for more entertainment value than anything else. It’s definitely one to check out if you’ve got some time. The episodes are very well done and very well researched.
Rob: Yes, that’s the thing. It’s an NPR podcast and it’s really well done. The title comes from, like you said, it’s things that most of us don’t think about. They’re kind of invisible to us.
Last three podcasts, I’ll run through quickly, really to do with an honorable mention. The first one is another Gimlet Media podcast called Reply All. I just heard an episode after StartUp at one point, recommended it and I’ve been really impressed with the hosts and the production value of it. It’s a podcast about—I cannot compare it to something.
It’s at a production level of a Planet Money or This American Life, but it’s dealing with more Internet, online stuff, online trends, and memes, and that kind of stuff in a pretty cool and interesting way.
The next podcast is Clay Collins’ podcast about cryptocurrency. It’s called The Flippening. He interview big players. He knows a bunch of the people in the space. It’s interesting to hear him talk to people who are pushing that whole space forward. If you’re already hearing about it, then you may want to avoid this one, but I think that Clay really has his finger on the pulse of where crypto is headed and I do believe that it’s around for long term.
The last one I just added, we we’re talking because I realized, the funniest podcast I listen to is called System Mastery. It’s vulgar as all heck. These two guys are cracking jokes. They will, week to week, I think the main feed is them reviewing old and even new roleplaying game manuals. They read through them and they talk about how the roles are good here and how they’re dumb here, but then they have all these feeds that they’ve combined into one. I hear System Mastery, which is them reviewing these role-playing systems. They also talk about, they do Expounded Universe where they read Star Wars expanded universe novels and they make fun of them because a lot of them are poorly written. They watch movies, which I think is called Movie Mastery. What’s funny is, I would say they make fun of them but they do it—when the movie’s good, they don’t just make fun of it. They talk about how much they like it, but they still do it in a humorous way.
For some reason, I have all that in one feed and I don’t know if that’s because I support them via Patreon or not. It’s either going to be your speed or it’s not because they use a lot of foul language but it’s also really funny. It’s funny if you’re a nerd and you get all their references because they make some deep, deep references. I really like what they’re putting together. I think most of it is improve, which is pretty impressive.
Those are our 20 or 21 podcast that we are liking these days.
Mike: I think that about wraps us up for the day. If you have a question for us, you can call it into our voice mail number, 1-888-801-9690, or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Out of Control by MoOt” used under Creative Commons. Subscribe to us on iTunes by searching for startups, and visit startupsfortherestofus.com for full transcript of each episode. Thanks for listening and we’ll see you next time.
Rob: Before we go, if you have a podcast you feel like should have made our list, please either email it in or post it to the comments of this episode, episode 395.
Mike: Rob, the interesting thing about recording this episode on the top 20 podcasts that we like is that, I actually stopped listening to podcasts about a month and a half ago.
Rob: Did you? You’re just cold turkey, just all of them.
Mike: It was mainly because what I realized was that as I would listen to podcasts when I was mowing the lawn, or when I was driving, or when I was going to the gym, what I realized was that it made me feel for the most part like I was still working. It just extended my workday especially with any of the podcasts that were about business, startups or anything like that. It just made me feel like I was working all the time.
Rob: Yes, because you’re thinking about work all the time. That makes a lot of sense. I’m glad I didn’t title the episode 20 podcasts we listen to. Podcast we like is accurate, right?
Mike: We, as in you.
Rob: Exactly. My guess is you’ll come back to them at some point, but I hear you. I don’t think that’s a bad thing to do for a season. I certainly have gone through spells where I have cut. I used to listen to 55 podcasts, not all of them get on every week, or whatever I called it way down. I was down to 10, and it was stuff like Daily Tech News Show that didn’t make me feel like I was working because it was more about entertainment and news. I had almost nothing in the startup space and then slowly, I kind of worked my way back into doing that. I think there’s a case to be made for both directions. I think you can swing too far with constantly shoving information in your head and not giving yourself space to feel like you can relax.
Mike: I think it’s also the ability to take a step back. I’ve noticed this in certain situations or certain times of the year where I will be heads down working and not really come up and look at the landscape from a broader perspective or a strategic view of things. If you’re always implementing things, you’re always working in the business, then you’re never necessarily doing the planning stages and looking at the big picture. The problem is I felt like I was getting too far into the weez with all the mechanics and the tactics, things like that, but never actually taking that step back to do any strategy and look at the bigger picture.
Rob: I agree. I think that you need quiet time to be able to do that. If you are busy, because you’re busy with your business, you’re helping with your wife’s business, watching the kids, doing all the stuff you have to do, if you don’t have time during the day to sit back and just think, I don’t disagree that dishwashing, mowing the lawn couldn’t be that time.
These days, I have time during my days now to do that. I’m sitting thinking during the day, so when I am doing dishes or mowing the lawn, I don’t want to keep thinking about stuff. I’m already doing some big picture thinking, so I think it’s kind of a phase you’re in.
The other thing too is a lot of podcasts, they aren’t that constructive. They aren’t necessarily pushing your thoughts or your business forward, whereas audiobooks could be. You can listen to fiction to make yourself feel like you’re really not working. Or some folks I know just go away from podcast and go audiobooks only because they an information dense resource.
Mike: That’s a big difference between something like an audiobook versus a podcast, whereas a podcast is much less directed and focused on a particular thing. You can get an idea of what a podcast is about from the title or from the description, but that doesn’t necessarily mean that it’s going to be helpful to you versus a book, where if you buy a book about a very particular topic like sales strategies, or how to use Facebook ads or something like that, it’s going to be very focused on that one thing that you intentionally and deliberately decided that you are going to learn more about versus a podcast, where you might pick up some things and you might not, but it’s probably not going to be terribly actionable versus something like a book or an instruction manual.
Rob: That totally makes sense.
Mike: The other thing is it kind of makes me think about the conversations we had on a podcast about the consumption versus production modes between people. Should we be making things or consuming, it’s hard to do both at the same time. Right now, I’m producing stuff so it’s hard for me to consume stuff at the same time. It just makes my brain go sideways a little bit I guess.
Rob: Big time. I put up a blog post at one point. It was producer versus consumer or something like that. If you Google that, you can find it. There’s a really good comment thread after I published it. It was a good conversation about this. What I proposed there, I don’t think I talked about phases. I said certain people produced a lot of stuff and certain people consume a lot of stuff, and what I’ve realized since then, it’s not people, it’s phases.
That’s what you’re talking about now. What I find is, when I’m done with a hurdle, let’s say I sold a business, or I’m done growing it, or whatever, then I want to consume a bunch of stuff because I’m trying to figure out what to do next and taking a lot of information helps. But as soon as you focus on the goal, because you know exactly what your goals are this year, right? You’re growing Bluetick and you’re doing it this way.
You don’t need a bunch of information. You just need that point in time learning. I’m going to do Facebook ads next week so I got to learn that—Boom, do it, launch it. You don’t want just a bunch of inputs about things that are going to distract you in essence.
Mike: I find that the podcasts in general are distracting because they’re making me think about things that are not nearly as relevant to me as I need them to be. It’s better if I just take that time to think about the business itself and what I’m going to do next versus what other people are doing in their own businesses. As entertaining as it is, it doesn’t actually help me.
Rob: That’s right. Cool, man. We should probably wrap this.
Mike: All right. Well, take it easy. Talk to you next time.
Rob: Peace out.
