Episode 106 | Moving from Consulting to Products (with Brennan Dunn)

Show Notes

Transcript

[00:00] Mike: This is Startups for the Rest of Us: Episode 106.

[00:03] Music

[00:11] Mike: Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike.

[00:19] Rob: And I’m Rob.

[00:20] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. So, what’s the word this week, Rob?

[00:24] Rob: Well, we just launched the HitTail Basecamp integration that I talked about last week. So it’s all live. If you go to hittail.com/basecamp, you get a brief walk through,  some screenshots of how that works. And I’m pretty excited. Like I said, it’s really – I’ve mentioned it was the first integration we’ve done but it’s actually the second I realized because the first one was with kind of the – the one-click article service but that one was written by me. On this one my product manager really banged this one out and it’s all architected well and I think I told you he wrote OAuth and OAuth Library in Classic ASP from scratch. I can’t imagine. I wouldn’t definitely not have been that just — I wouldn’t have that coding forwarded to to sit down and do that. But anyways, we’re excited, you know, we’re both doing – going to start a little of bit promotion. We’re kind of doing a soft launch right now. We’d just want to get more people using it just to make sure it’s all good and also have a little bit of paid acquisition with some HitTail and Basecamp stuff going on. So, it’s pretty good. How about you?

[01:17] Mike: Well, I have this new developer starting in a couple of weeks. I just kind of worked out some arrangements with him. We’re going to try – we’re going to try doing some stuff for about three weeks or so and see how it works out and then kind of reevaluate things from there. So, hopefully, that works out.

[01:31] Rob: AuditShark?

[01:31] Mike: He will be working on other stuff first and then if that – if everything works out, then probably transition him over to working on AuditShark.

[01:38] Rob: Got it.

[01:39] Mike: As I said, it’s a trial period and we’ll just see how it goes but I really need somebody who I can put on AuditShark to work on some of the core guts of it. I’ve been working on a lot of this database synchronization code for AuditShark and I’m about at the point where I can actually start testing it but I have all these to-do comments and they’re like different events and things that should be logged. So, you know, some of them have security implications. Some of them just have synchronization implications and I haven’t actually implemented any of the login code behind it and if I had to go look, there’s probably close to a hundred places where I’ve literally documented to do log this or, you know, to do make sure that you double check this data or et cetera. So, to be honest about it, it’s not necessarily worth your time to be doing that. I mean there’s other places that your time is better spent.

[02:27] Rob: Right and that’s the thing is, you know, my 12-year career writing software, I’ve always gold plated everything especially as a consultant and working for – I was a salary employee for credit card company for years like you wrote things to the nines and so when I say I’m a hack what I mean is a hack compared to that where I would spend weeks writing this, the single routine and testing every possible option and doing all kinds of stuff and I just don’t do that anymore. Get kind of the minimum viable function out and then revisit it later. And the thing is that I can – I can just move so quickly, right? If there is actually a bug or any types of problem, I can go in and edit the stuff and it’s not a – a 2-day process to get a change in to production like it used to be. So, it’s more of taking advantage of your agility as a very small startup or a very small software company. You can really be much more, more fast moving than – than larger competitors. So, you have different pros and cons than a larger company maybe doing or building the same software.

[03:21] Mike: Right, I mean there’s just different priorities when you’re working on stuff. That’s really all it comes down to.

[03:25] Rob: Well, hey, if you haven’t checked out episode 36 of the Stock Exchange Podcast, it’s definitely worth a listen. It retells in great detail their Hurricane Sandy story of logging those buckets of gasoline up the stairs after they lost power. We’ve briefly mentioned it last week but I heard the episode. It’s just to hear that kind of that, they had like eight or nine people on this podcast since it’s a round table and they’re just telling their story of, “You know, it’s midnight on this day and then the power goes out and then you just…” One guy had a knife and another guy had a plastic vodka bottle that they cut the bottom out of and used as a funnel for the gas. I mean it was just so cool to hear the innovation and just the get it doneness of the entrepreneurs, right? They didn’t sit around complaining. They just figured out how to make it work and how to log this gas up the thing to keep – it was Fog Creek Software and Square Space were the kind of the two people on this podcast. So, pretty – pretty cool story.

[04:18] Mike: Yeah, that is cool. I haven’t – I haven’t had a chance to listen to it yet. I’ve got some time up in New York and I’m going to be spending down there again. So, I’ve got a 3-hour drive back and forth and I definitely be listening to that though.

[04:28] Rob: Nice, what else is going on?

[04:29] Mike: Oh, you know what? I think that you had said that you tried the Facebook ads.

[04:34] Rob: I did, indeed.

[04:34] Mike: I’m going to be doing that soon. My wife is kind of venturing out to actually start her own business at this point. She’s going to be – she’s a certified Zumba instructor. She’s had enough people approached her to teach at different places that she has decided to kind of take the next step and start building up her own fitness company. She was asking me about how to not necessarily how to drive people to her, you know, to her classes and stuff but she’s kind of talking about some of the issues that she’s got with that, “Oh, well, I’ve got to make sure that I have this number of people there and if I don’t, then I either break even or lose money.” And I just kind of offered to help her drive some people there and my first thought was, well this seems perfect for using Facebook ads.

[05:15] Rob: Absolutely, I really agree. I think that’s a good choice because it’s definitely a consumer-type thing. Now, for people who don’t know what Zumba is right –

[05:22] Mike: Yeah, it’s kind of a dance fitness. There’s kind of a Zumba fitness organization that oversees it and there’s all these rules and regulations about how you can use their logo and brand and everything else. So, she can’t have a brand name that says Zumba and or anything like that. But it’s – it’s very well tied to overall health and fitness and incorporates a lot of dance moves. So, she’ll teach at Curves which – Curves is a fitness facility that is exclusively for women and she has to teach it like the YWCA and there’s a couple of independent fitness studios around that she goes in to. So, she’s been subbing for different classes and somebody had said, “Oh well, I can’t do this class anymore. Can you do it or do you want to take it over?” And she said, “Well, I’ll take it over if you’re not going to do it anymore but I kind of want control over everything at that point, you know, I’m no longer going to be just doing it as a substitute.” So, she’s going to essentially expand from there.

[06:14] Rob: That’s cool. And Facebook is neat for geographically targeting like that. A mutual friend of ours was actually trying to relocate and his wife worked for a government agency that would only transfer her job if she could find someone at the new location to swap with her and so he went on to Facebook and targeted that location and that government agency because you can say people who work for –

[06:34] Mike: Oh –

[06:34] Rob: … and type it in. And so, he did that and was showing ads to like say, “Do you want to move to X,” you know, where they currently live and he got some people to come through. I don’t know that he ever actually – if that’s where they actually found the person or not but he definitely got inquiries and he just had a like a Google doc form or some, you know, e-mail link or something and people can drop a line. So, it’s pretty cool with local stuff. It’s super easy to target across a lot more demographics than any other system I’ve ever seen.

[07:02] Mike: Right. She was – she already has like a Facebook fan page set up that, you know, she’s going on there and letting people know because one of the issues she has is if there aren’t enough people attending that sometimes they have to cancel depending on the location, so, there are, you know, there’s usually post that go out on Facebook that says, “Hey, if you – please RSVP or let us know if you’re going to be able to make it tonight,” and then they’ll cancel class within like an hour so that people aren’t driving there and then find out that it’s canceled. And that was what she was thinking that she would be using Facebook for and I said, “Well, you have access to or you can get access through the Facebook ad system to all the people in this geographic area and you can advertise explicitly to those people.” And I don’t think that was something she’d ever really considered before and I don’t think that any of other instructors she’s worked with have done anything like that either. It would be interesting to see how that turns out.

[07:49] Rob: I agree. Keep us posted. I want to give a shout out thanks to Andrea Conti [Phonetic]. He put together a detailed list of the podcasts that we mentioned in Episode 104 because I just had it as kind of a bulleted list and he put up all the links and he put it in to nice HTML table and so, that’s now live in Episode 104 in the show notes. So, I’d just wanted to thank him for that.

[08:11] Music

[08:14] Rob: So, Mike and I are very pleased to have with us today, Brennan Dunn. He’s a long time Micropreneur Academy member. He also runs his own consulting firm, founder of Planscope and that’s at planscope.io which is project management software for freelancers. It’s a software service application. You know, he’s also written an E-book for freelancers. He has a podcast. He does workshops, all kinds of stuff but before we get in to that, I wanted Brennan to say hi to everybody.

[08:38] Brennan: Hey, everyone.

[08:39] Rob: So, talk to us a little bit about just maybe a 1 or 2-minute intro kind of where you come from, what you’ve been up to the last few years and how you found yourself launching Planscope, you know, having the E-book and workshop and everything.

[08:49] Brennan: Sure, six years ago, I went out of my own became a freelancer. And a little over two years ago, I decided to grow a company. Well, really, I got it so much work than I really had to scale. I kind of went out on a whim and just decided to open up a brick and mortar consultancy. And we grew to ten people and it was a rush but really, I was bit by the product bug and I really wanted to escape consulting once and for all and just kind of build products that I owned and produced recurring revenue for me because consulting can be extremely draining. Yeah, so I decided to – really what happened first was I took Amy Hoy’s 30×500 class and I also at the same time signed up for the Micropreneur Academy. So, I did my research. I discovered that there is a need for something like Planscope and I built it and launched it at LessConf last year, I believe last February.

[09:43] And it’s been growing pretty steadily but the problem with SaaS revenue is even at a 10% growth rate, when you started from zero, it’s still going to take a while to kind of become really that profitable. So, basically I promoted somebody at the consultancy to run it in my absence and I’ve been heads down on products ever since. And last summer, I released a book which in turn led me to managing a newsletter for freelancers and just recently I launched my first online workshop. So, all of it really appeals to the same audience, freelancers and they all kind of feed off to each other. So, that’s kind of my last six years in the nutshell.

[10:22] Rob: Very nice. So, your consultancy is still running kind of in the background, is that right?

[10:27] Brennan: It is. Most of the people that used to work for me fulltime had now been converted back to independent contractors and the guy, Zack who used to lead business development, I really promoted him the COO and really, I get a once a week phone call with updates and how we’re doing and everything else.

[10:44] Rob: Very cool. So, you are very much working on your business not in your business, I would say.

[10:49] Brennan: Correct.

[10:49] Rob: We’re going to be talking about moving from consulting to products and this is something that all three of us on this podcast here, you know, might have done or in the process of doing. And I think it’s a very common path and even if folks are simply moving from salaried employment to products, it can often be, you know, a similar type of set up or you’re just trying to buy out enough time, enough of your time to actually get an app off of the ground. And as you said, if you have a SaaS app, you do tend to need a pretty long runway in order to make it there. So, I guess the first question and you partially addressed this already but you mentioned that, you know, consulting obviously brings in good revenue. So, what is your motivation? Why do you – why do you thirst to own products?

[11:32] Brennan: I think because I know a lot of product owners and I know that they are significantly happier than I ever was working 12 hours a day managing a consultancy, going through the churn of client after client and really having no ownership at the end of the day of anything I produced. So, products were always kind of, you know, the light at the end of the tunnel and people were paying me to build products for them. So, I had everything I needed to build my own. The problem of being that, you know, consulting like an illicit drug gives you an immediate benefit whereas products tend to take a little longer.

[12:03] Rob: Right, so consulting is like an illicit drug and products are like exercise perhaps?

[12:08] Brennan: [Laughter] Yeah, I’ve always actually compared consulting to crack cocaine.

[12:13] Rob: How about you, Mike? What are your thoughts?

[12:15] Mike: It’s really hard to breakaway from consulting once you’re there though. I mean, I really admire what you’ve done in terms of being able to be in a position to I’ll say essentially walked away from that consulting business without having to pay attention to it because you had somebody there who you could rely on and essentially help maintain the business.

[12:34] Rob: Yeah, for sure. I think I’ve, you know, my thoughts on this as well as are similar to Brennan’s and that I was always doing it for the lifestyle element but more for the freedom of it initially and I thought that once I have the freedom that, man, I would just totally be happy and it turns out that the freedom was part of that but I also needed to continue to have challenges as well and you know, I’m certainly in the same boat as you, as you guys. So, the next question I have for you guys to throw on the table is after you realized, you know, let’s say you’re a consultant or even a salaried employee, what’s the first step you recommend once someone has made that decision that they want to go all in and they want to move to building products and they want – essentially, I think, obviously, the first step is replacing their income but, you know, even before that like what do you think now that you guys are both, you know, in the midst of it, what would you recommend someone do?

[13:19] Brennan: So, I’ve seen a lot of consultants who try to enter to the product space and the ones that fail, end up treating their product really like a side project. What I realized earlier on was that if I wanted any of my products to actually succeed, I would really need to treat it like first-class client project, not I”ll deal when I have time or I really had to make sure that I dedicated two days a week to doing nothing but working on my product while spending the other three days really fulltime heads down on, you know, paying my own personal bills. Now, I’ve kind of had it a little easier because in running the consultancy, my employees were paying my bills. So, made it a little easier to write Planscope but had I been a freelancer, it would have taken longer but the same outcome, hopefully, would have occurred.

[14:04] Rob: Very nice, yeah, you definitely have the luxury of having that consulting and it isn’t like something that was hand to. You had built the company but it certainly was a benefit to you when making that transition. For my perspective when I was transitioning from consulting and trying to replace that income with products, I was supporting the family. I had one child and a mortgage and the wife and she was an intern at the time. And so, I was consulting during the day and I was actually doing a lot of side work in the evenings and weekends to try to be able to work on my products. And so I hear what you’re saying about having it work on the side is actually a big challenge and that tends to be a recipe for failure. Somehow I has able to make it work but it do take me several years obviously and a lot of failures to get there.

[14:49] Mike: Well, I think that the way Brennan put it was a little bit differently than I would have thought of it where he said that he really has seen a lot of people failed because they don’t treat their side projects as essentially a first-class citizen and you know, basically treated them as if it was consulting work that absolutely had to be done. And what I was going to say before he had said that was essentially talking about a mindset change because when you’re doing consultant work, you get this immediate benefit from whatever it is that you’re working on and you get paid by the hour on a weekly or monthly basis and there’s a tangible reward that you know is going to be coming with the consulting work. When you’re working on a product, you don’t necessarily have that and it could be months or even years down the road before you start to make enough money that all of the time that you put in previously starts to pay off.

[15:38] So, it’s – if you’ve been consulting for a long time, it’s a serious challenge to get over that mental block that he just says, “You know, I’m going to put some time in to this. I’m going to put in 10, 20, 50 hours and I’m not going to see any return or whatsoever for a very, very long period of time and I think that’s just a mental block.” But I think the way Brennan put it was extremely good and that you have to treat it as if it was a first-class citizen as if you are doing work for someone else and that it needs to get done.

[16:05] Rob: Yeah, for sure. I think that was something within the first six months of starting to get some product revenue, I actually toned down my consulting hours right away and I knew that being able to do that with lend a lot of freedom. It will basically lend some acceleration to getting that, that product revenue going. Even when I was salary, like a couple of years earlier when I started having a little bit of revenue, I actually went down to part-time at one point, my salary job. So, we’ve talked about that on the show before but I definitely think that that’s something that people should – should consider. It’s not an all or nothing game of working 40, 50 hours a week for an employer or clients and then only being able to work on the side on your app. There is an in between and it sounds like, you know, we all have different ways of achieving that.

[16:47] So, I want to switch the discussion over to this thing that I’m calling the stair step approach to replacing – essentially replacing your income and I’ve mentioned that a couple of times because that’s kind of the first goal. I feel like if you’re a bootstrapper, you need to replace this income of, you know, your salary job or consulting. And a lot of people hunker down and try to build this big SaaS app and they want to make the big splash and you know, start generating that recurring revenue right away. But what I’ve seen and the approach that I took and what I have actually seen a lot of people having success with is not relying on a single product and having some easy wins early on. So, either writing an E-book, having a WordPress plug-in, running a workshop like you’re doing, Brennan, to fund some of your time so you’re able to work harder and focus more on your longer term win like a SaaS app.

[17:34] And so I had – I have crazy websites people have heard about like justbeachtowels.com where I, you know, I had beach towels that were being drop ship to people and I had a CMS theming service early on and I had some other information products that I don’t even own anymore by there were my stair step products just to get that income replacements so that I had enough time to then really focus on this long-term goal of building the products with more longevity. You, Brennan, are already attacking that. Can you tell us a little bit about how that’s worked and whether it was intentional or whether you’ve just kind of, you know, stumbled in to having these multiple smaller products?

[18:08] Brennan: Yes, so it’s actually a pretty funny story. One of the misconceptions I think is that consultancies have a very high profit margin. It really tends to not to. So, now that I’ve kind of given the reign to somebody else, the income from the consultancy isn’t nearly what it used to be and what it used to be wasn’t that significant either. The thing is Planscope right now we’re kind of slowly growing it about 10% a month but that translates to maybe $400 a month in growth which isn’t going to pay my mortgage and my kids’ schools and everything else anytime soon.

[18:35] So, I had two paths. I could go full steam consulting and really throw away a lot of hours because consulting, you spend an hour on a client project and that hour doesn’t benefit your product or your audience at all. So, that was path one and path two which really came really accidentally I think. I had a bet with Amy Hoy where I really wanted to go to a conference in Ireland and we had some medical issues, you know, in the family and I didn’t have anything budgeted to go and I know Planscope wasn’t going to be able to give me the money I needed to do that. So, she convinced me to write a book. The book actually came pretty easily because I had developed really good relationships with my Planscope customers and determined that a lot of them were kind of unsure about to price their services.

[19:19] So, I wrote a book. I collected pre-sales and I actually sold $6,000 in product before the book was done and since then, it sold another 25,000. Now, it’s brought in 30 grand which I’m pretty happy about considering that’s nine months or eights months of Planscope at its current state’s income. And then that actually led me to realize that there was a smaller need in the subset of people who wanted to learn me from me about building a consultancy. So, I up the ante and actually charge a thousand a seat. I sold 25 seats. That added another 25,000 to my runway of capital. So, the benefit overall I think of the second path is that all of this feeds in to each other.

[20:02] So, I’ve gotten Planscope customers who found my book because the book is much – it’s hard to convince somebody to drop their current project management software and use yours but it’s a lot easier to an impulse buy to get somebody to find your book and if your book is about – like mine is doubling your freelancing rate that’s a quick and easy buy. They read the book. They either like or they don’t like my philosophy on things, then or are much more willing to check out my other products because they like me. They like the mentality I have towards consulting. So, they all kind of worked out really well and it still is. I mean the book is still selling. The workshop is still selling and Planscope is still selling. So, the diversification for me at least has yielded a lot of returns.

[20:42] Rob: Yeah, that’s really cool to hear. I think we’ve seen similar things with, you know, the podcast tying in to the Academy and tying in to MicroConf and then, you know, I wrote the book, my book on a similar subject, then I certainly see the same thing of there are just being a lot of crossover with people finding one and basically liking it enough that it kind of gets them in to your world. And if they respect the work that you do, it’s pretty easy for them to then say, “Oh, well, I paid 19 bucks for a book. Next, I’m able to actually invest a little more and maybe I even, you know, spend a thousand bucks and go – go to the conference and that happens in the next spring.”

[21:12] Music

[21:15] Rob: So, our next topic is going to be talking about the pros and cons of moving to software products from consulting versus moving from a salary gig. And this is actually one thing that Mike and I get this question a lot from a lot of different people. It’s a challenge. If you’re working at a salary gig and you’re really unhappy, the choice of moving directly in to products or moving first to consulting and trying to build that business enough to support you and then moving the products, it’s a big question and it doesn’t necessarily have a right or wrong answer but I want to throw that out there and kind of have — maybe Brennan, you can tackle it first and then Mike and I will give our thoughts as well.

[21:49] Brennan: Sounds good. So, I haven’t been a salaried employed for six years now. So, I really wouldn’t know what it’s like to go from salary to products but what I do think is it’s probably easier to go from consulting to products specifically because as a consultant, you really are a small business owner. And secondly, one of the really interesting things that came out of the workshop that I discovered was a lot of the students wanted to end up building products one day and a lot of them currently productize their consulted services. So, they might have different packages or these retainer agreements and they are already getting experience in pricing and how to market their services which I think is giving them a huge advantage when it comes to building what we might call traditional products, info products or software.

[22:34] So, that’s my thought on it. I think also one of the benefits that I think of being independent is you can kind of – it’s almost like a scale. As your product revenue increases, you can then taper down your consulting time but likewise when you’re just starting out, you’re probably going to doing more consulting because you don’t really have any product income to begin with and usually as an employee, you can’t really — you’re stuck nights and weekends usually to work on your side projects.

[22:58] Rob: Right, it’s a lot harder to taper, taper down your hours. What are your thoughts, Mike?

[23:02] Mike: I think if somebody will come to me and ask my advice on whether they should jump from a salary gig in to consulting and then use that to leverage it in to products or just go straight in to the products, I probably advice them to go directly in the products. And I think the reason for that is more along the lines of when you’re doing consulting especially if you don’t have a subcontractor arrangement where work is essentially being handed to you at all times, then your focus tends to be divided. And by divided, I mean you’re essentially trying to make sure that you have enough consulting work in order to make ends meet and if you don’t, you have to work twice as hard at it. And that is very detrimental to being able to put – set aside time for working on your side project versus if you have a salaried engagement, you don’t – there’s all these other stuff that you don’t really have to think about. You can just say, “Oh, well, you know what? I’ve got a couple of hours free. I can just work on my own product,” versus if you are running your own consulting company and you’re doing independent consulting, a lot of times you have to spend that extra time thinking about, “Well, where is my next paycheck going to come from? Where is my next project going to come from?”

[24:10] And those things tend to get in the way. Now, there’s definitely a benefit to running your own consulting company and getting the experience of running your own business. I could certainly see the benefits of trying to work through pricing and things like that and getting an external view of that because most of the time developers who are working in the company don’t see like the sales and marketing sides and things like that. But I think that having that paycheck, that weekly paycheck that you don’t really have to worry about where it comes from and being able to fall back on that, I think that’s really, really beneficial.

[24:41] Rob: I certainly see both – both sides of the coin. I think when – when I get this question, I say that if you’re already consulting, it’s a no brainer to keep doing that purely because of the freedom that you have and the timing flexibility and the ability to kind of to filter down your hours or funnel down your hours as Brennan said. But if – I think if you’ve been a salaried employee for years and you’ve never been a consultant, there’s a lot to learn and that first three to six months that I tend to recommend people don’t try to jump in to it because it’s going to take them several months just to figure all their stuff out. New experiences of taxes, new experience of finding projects, managing projects, billing clients, making sure they get paid, you know, there’s all that stuff. And once you’ve been doing it for six months to a year, all that becomes a natural but it is a learning curve upfront.

[25:24] And I also think that if your added job that doesn’t have you working a ton of hours, that it’s actually more beneficial like if you’re working 30, 40 hours a week at a salaried gig and they’re not pushing you to 70 or 80 and you’ve been there for several years and you already have the clout and you kind of the trust of people, it actually gives you a lot of time to kind of go and decompress and work on stuff on the side. You know, there is kind of dependence on how your day gig actually is and how they actually treat you and if you do have the autonomy outside of it and you do have the mental space outside of it to devote to your product because certainly if you are working 70-hour a weeks and have you doing on the weekends, then my answer would be to put – potentially I have to find a different salary job or to move in the consulting from there.

[26:06] Brennan: The last time I had a salary job, I was working 80 hours a week and there’s just no way I had any mental energy left to do anything else. So, I think if I had a very cushy safe and secure job, then you’re right. I think not needing to jilt with business development or anything is useful in a lot of ways. So, I think Mike actually has a really good point.

[26:24] Rob: So, obviously, you’ve had several successes both with your – your SaaS app that you’re building up. You’ve had a successful consultancy you’ve built, your E-book, your workshop, are there any major missteps that you feel like you’ve made along the way that other people would be likely to make?

[26:39] Brennan: I know one thing that I made a huge mistake of and that was letting my initial Planscope mailing list got cold. When I initially tried to cross sell the new book to that list because I haven’t literally spoken to them in months, the reception was not nearly what it should have been. You know, conversely I did keep my list warm for the book. If you buy the book, you get on my newsletter and I send three advices once a week which people seem to really like. Within hours when I announced the workshop and kind of ramped up anticipation about the workshop, I literally almost sold out the workshop within a few hours because the list was warm. That’s one huge mistake that I made with Planscope because I didn’t really understand the value of relationships outside of a user entry and a database.

[27:23] Rob: Yeah, the power of that list is not to be trifled with. Mike, do you have any missteps?

[27:30] Mike: Yeah, I mean the one that I kind of harp on that I ran in to was getting in to a consultant arrangement where you getting paid as contingent upon somebody else getting paid. That was more of a contract issue than anything else. Sign something and not really thinking about it and you know, they’re like, “We’ll pay you within seven days when we get paid by our customer.” And that was just sounded great. Their customer doesn’t pay them, then I’ve got no recourse to go to them because they didn’t get paid. And you know, I sat around for it was probably close to six months before I got 30 some thousand dollars in– invoice is straightened out.

[28:02] Rob: Okay, well cool. Let’s talk about myths and all that – there’s a lot of startup advice out there and as soon as you start actually working on a product, working on a startup and launching something, having people use it. Instantly, some of that startup advice becomes essentially a myth in your mind because it’s just not true, right? It maybe had been true with that person who said it, it may have been true for that person, but there are some common things like eating your on dog food, you must be part of your target audience, you know, build something people want and all these things that may or may not turn out to be true if you launch and have a different experience. Anything come to mind that once weren’t true but now is nothing more than – or maybe a startup myth?

[28:40] Brennan: So, I pointed out three different things that I used to believe and no longer believe. The first is that I used to believe that you realistically couldn’t consult or do something else and bootstrap a product. There’s a huge emphasis on you need to take outside money so you can stay focus 100% on your product and that I just think that’s simply not true. I think you can — you can multitask. You can work on both. So, I mean again it’s a slow growth, tortoise and hare type of raise but in the long run, I think it’s better, at least for me than the alternative. The second thing that I think I’ve come to realize is you really don’t need a business co-founder. I’m a developer. I’m also a designer but when it comes to things like Planscope, I run support. I do all the marketing. I did blogging. I pretty much handle everything. No one else works on it with me and it might seem overwhelming but I’m very partial to low risk easy win B2B products that I’m not inventing new markets. I don’t need to have some crazy viral win to grow their product. What I found is that when you take that route, when you focus on solving things that businesses have, I think it is manageable by one person.

[29:48] So, my third myth finally and this is something that took me a while to realize is the myth that marketing is boring. I’ve actually come to prefer doing split testing over writing code. I just think it’s a lot more interesting. I mean it’s almost like people hacking. I mean you’re getting to see like how different variations are affecting things or – I recently redid my on boarding completely and I was able to see tangible financial results pretty immediately afterwards. That’s the stuff that really is interesting to me and I used to think that the marketing side of thing that’s left for a marketing department, you know. All I care about is code quality and craftsmanship and everything else which are important but I’m really enjoying the traction affecting things of the job.

[30:30] Rob: For sure. What I’m seeing with entrepreneurs who are — developers who are transitioning to entrepreneurs and I did the same thing is you start by disliking the marketing just because we consider the four-letter word in the development world because if you’ve ever worked with marketers, they’re always a pain in the ass because they’re always making you do stuff as a developer that you don’t want to do, you don’t understand what they want you to do. And so, first you start kind of your standoffish to it and then as you start learning it and you start to enjoy and see the – like you said, its people hacking, it’s engineering of business. There’s like all these different ways to look at it but once you get in to it, it becomes super addictive and I found that that entrepreneurs who – the bootstrappers who are actually making it happen, they eventually making the switch that you’ve said where you actually enjoy the marketing perhaps more than writing code. Writing code is still fun. Writing code is your first love but this new thing, shiny and new and it gives you the financial immediate feedback that you don’t get to see when you’re sitting or hacking away and creating a new business object or new database table. So, I could – I can totally see that. How about you, Mike?

[31:30] Mike: Well, I think Brennan talked about two of the three. I would have ordered them slightly differently. The first one was that you need the co-founder and I don’t think that’s true at all.

[31:37] Rob: Right, you’ve long been in time – you’ve long been –

[31:38] Mike: [Laughter] Yeah, I’ve long been an anti co-founder and it’s not –

[31:40] Rob: Yeah.

[31:41] Mike: And it’s not really so much anti co-founder is that not having the right co-founder is probably worse than having no co-founder and that’s really what it is. I just think that people really need to understand that you if you get involved with the wrong co-founder is infinitely worse than doing everything yourself. The second one is that you need funding in order to do anything interesting. I think that there’s a lot of people out there who are doing some very, very interesting things that they just don’t have funding for what they’re doing. They’re all bootstrapped or they got things to a certain point on their own and then they decided that they wanted to go after funding and I don’t think there’s anything inherently wrong with funding but I think that there is this frequency of notion out there that you need funding in order to be successful and I just don’t think that that’s true.

[32:20] The third one is that if you read a lot of the – the successful people out there, it seems easy and you ready everything they say that they, you know, they’ll talk about some marketing technique or something like that and you kind of intuitively understand it. It’s like, “Oh, well, yeah, that makes sense. I would have done that.” But you wouldn’t necessarily have done that and what you come to realize is that those things aren’t necessarily hard but they’re time-consuming to learn and the reason that they’re time-consuming to learn is because you make a series of missteps before you kind of stumble on the right idea and then in retrospect everything should have been obvious to you but it wasn’t.

[32:57] So it’s just that things that should take a lot less time especially when you’re getting in to the marketing side of things, they’re going to take substantially more time than you think they will because you’re going to have to go through those series of missteps before you really understand what’s going on and it’s only in looking back out of it that you understand.

[33:15] Rob: Right, I think, I, too was a victim of reading the blogs back from about 2000 to maybe 2005 and it was – it was folks like Paul Graham, Eric Sink, Joel Spolsky and they talked about their startup days and they just sounded so awesome. It sounded just like this romantic vision of this peaceful villa where you’re just typing way some code and launching some products and I was totally a victim. So and I don’t think – certainly don’t think that was intentional on their part but it’s just you’re not going to write a blog post about the stuff that’s really boring and as it turns out, a lot of the stuff that we do [Laughter] is pretty darn boring. Don’t know if I would call a myth but definitely a misunderstanding of mine early on.

[33:51] Some folks say that you have to be a user of your app like you have to be the number one user that you have to build something that you will use. And well, I do think that is super helpful, I don’t think that’s a necessity and I absolutely think you can build something in other niches for other people, you know, still the low hanging B2B bootstrap ideas I’m a big fan of. But I still think you can have a lot of success with that even if you’re not necessarily in the niche that you’re building for.

[34:15] Brennan: I think it can be harmful to you to build something that you’re a little too passionate about. One of the things that I’ve tried to get pretty good at is putting my ear to the ground and listening to what people are saying and what problems they have day to day. And I think that is significantly better than the alternative which is you’re in the shower in the morning and a great idea comes to you and you go and build it. I think doing that kind of I won’t say market research but just listening to what people are venting it out, that’s where Planscope came from. I was basically crawling through internet forums for freelancers and I started from there.

[34:50] Rob: Very cool. So, the next question I have is do you have one or two traits that you think are the most important for a successful founder now that you’re kind of knee deep in it?

[34:59] Mike: I think one of the single most important traits of a successful founder is perseverance and understanding that you are going to make mistakes and that’s perfectly okay, you know. Nobody escapes from the business world completely unscathed. That just doesn’t happen. There are people who get really lucky but they still make mistakes along the way and it’s learning from those mistakes and adjusting and listening to what your customers are telling you that really makes a difference at the end of the day. You’re not going to hit homerun on the first day. That’s generally doesn’t happen. You can do a lot of things right but you’re still going to make a few minor mistakes along the way and overtime, the number of mistakes that you make is going to go down in certain areas and then as you start to thread new ground, you’re going to learn new things. You’re going to make mistakes in those areas and then you’ll essentially adjust in those other areas as well. So, I think that perseverance and in the phase of uncertainty is really the single key trait that somebody has to have.

[35:56] Rob: I think the willingness to fail and to actually go out with the intention of failing at a few things is important trait that I learned early on. I was just thinking about six months ago when – I don’t know, it’s about ten months ago, now when I relaunched HitTail I had this marketing plan and I put that in to a task list for myself and I was going to try about there are like 18 different marketing approaches, all different kinds of tactics. And I look at it and said, “You know, if 18 of this fail, and only 2 succeed, I am going to have a growing startup.” I’m actually going to have an app that works and even if 19 of them fail but 1 of them is like a huge success, you can get 10, 20, 30% growth a month in an early stage bootstrap startup with just a single – single successful marketing tactic. And it was actually in my head early on that most of them would fail but I need to try all of them.

[36:48] One, to get the updated experience with them and two, because I love learning, I love trying new things. And three, because I just didn’t know which one was going to work best and which one is going to drive the most traffic. And so running through all these things, I now have learned a ton about all of them and I know how this, you know, much brighter vision for what I can do both with HitTail and with future products that I have. So, I think that the willingness to go out there and to take some risks and to bet both some money and some time. And it’s not betting the farm on any of these single approaches but it’s vesting some money and some time and learning from that and being able to take that knowledge and then invest, you know, as you move forward.

[37:24] Brennan: Yes, I would point out cadence as being an important trait which goes along with what both of you were just talking about and what I mean by cadence is knowing that in order to be successful, it’s going to be a lot of very small victories or a lot of very small steps. And I see a lot of founders who they go away in to a basement and write a product almost in secret. They have this idea of this grand launch day. They launch it and crickets and then they get discourage and fades away. I’ve always been a big, big advocate of really a thousand launches, right? I never really saw my launch day as being anything really that significant except that now I had an avenue for getting paying customers in the door.

[38:08] But there is nothing spectacular on my launch day and I think you read TechCrunch or these different publications and you hear about these grand launches and people adding millions of users overnight.  Like I think I mentioned earlier, it’s a long tail game. It’s steady march. It’s a cadence. It’s – I do my, you know, continual amount of blogging and producing content that helps me with my organic visibility where I slowly build out new features base on what my customers are actually asking for instead of thinking it as all or nothing way of looking at things.

[38:40] Rob: Right, as Dan Anders would say, “It’s playing long ball.”

[38:43] Brennan:Right.

[38:44] Rob: All right, so I’m going to wrap this up with one final question and I’m actually interested in hearing everyone’s thoughts on this. We’ll start with Brennan, where do you see your business or businesses one year from now? What do you envision?

[38:57] Brennan: I will probably have another book out because there has been, again, I kind of mind my customer correspondents to figure out what problems people have and they try to see between the lines and what I could offer to them, you know, initially. In a year I would like to fully live off a combination of my products and I would also like to really optimize. I would like to have a very grand funnel that works across all of my products and makes the transition between each product very seamless because the way it’s working now is all of my products really target a single audience. If I can pull that off, that will obviously help my growth of my sales which will, hopefully, get me even closer to cutting the cord on consulting.

[39:41] Rob: Very nice. How about you, Mike, where do you see yourself with AuditShark, Altiris Training, forum software, what else you have going on?

[39:50] Mike: [Laughter] Well –

[39:50] Rob: Where do you see that in a year?

[39:51] Mike: Oh, on top of that, I will probably have published a book in about a year. So –

[39:55] Rob: There –

[39:55] Mike: There’s a spoiler alert.

[39:56] Brennan: [Laughter]

[39:56] Rob: First announcement. Very cool!

[39:57] Mike: Yup, yup.

[39:58] Mike: I anticipate being completely wind off from a consulting probably within twelve months. I don’t know how quickly that’s going to go but I, you know, obviously have a lot of different things going on  right now and it’s a matter of kind of figuring out which ones are working,  which ones aren’t. I have probably three or four different things that are I’m obviously juggling at the moment. Between all of them, I’m just going to be figuring out what one works and which one doesn’t and then, you know, putting some extra effort in to the things that are working, hopefully, leveraging some partnerships that I’ve been working with people on and you know, like I said just getting on a consulting. That’s kind of my main focus for, you know, the next six to eight months.

[40:34] Rob: On my end, I anticipate or hope, however you like to say it, that HitTail will be a two at least 2X where it is today and with a potentially to be it about 3X it means growing at a pretty nice cliff right now. And I have a product manager in place that I’ve mentioned a few times and he’s taking on more and more responsibilities. So, over the next three to six months, I expected transition in to another product. More updates on that in the future.

[41:03] Brennan: Nice.

[41:04] Rob: Well, Brennan, thank you very much for coming on the program. We really appreciate your time in lending your insight. You know, someone who’s knee deep in this process of transitioning from consulting to products, I’m sure that there’s a lot of folks in the audience who identify with where you’re at inside this. I certainly appreciate it. If people want to get in touch with you, learn more about you, what’s kind of the number one place they can go to get – maybe get in touch with you or just read more about your trials and tribulations?

[41:28] Brennan: So, my – the Planscope blog has most of – I blog extensively and I do this because I’ve realized that for me at least Hacker News can be a pretty good source of new business and I’ve put up quite a few different blog post about – well, I’m very open and transparent with my numbers. Well – I’ll detail on boarding experiments and the results of that or one of the more recent ones was about how I built up this runaway of cash through these different products. planscope.io/blog is where you’ll find a lot of my writing. You can e-mail me at me@brennandunn.com or I’m on Twitter @BrennanDunn, B-R-E-N-N-A-N D-U-N-N.

[42:08] Rob: Well, very good. Thanks again for joining us.

[42:10] Brennan: Yeah, thank you.

[42:11] Rob: If you have a question for us, call our voicemail at 888-801-9690 or e-mail us at questions@startupsfortherestofus.com. Our theme music is an excerpt from ‘“We’re Outta Control” by MoOt, used under Creative Commons. Subscribe to this podcast in iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.

 

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8 Responses to “Episode 106 | Moving from Consulting to Products (with Brennan Dunn)”

  1. Mike… you’re writing a book? And STILL haven’t finished Audit Shark?!

    It’s painful! How much has it been already? Like 3 years?

    We all have projects that we never finish; that’s perfectly fine. But just be honest with yourself, and with the listeners, and close Audit Shark.

    In my experience, officially giving up on a project (instead of just kind of pushing it to the side) is a lot better idea. You no longer have that little voice in your head nagging you about not finishing it. It’s done, you’ve learned your lesson, and you can freely move forward.

    So please, spare us another episode of you saying what bug you’re working on, who you’re going to hire to do what, that database issue you’re after, etc. That’s not what your target audience is interested in.

    Rob, your comments?

    (Sorry I’m so direct)

  2. Yes, second Sandy above. My feeling doing projects is, if a project lost the momentum, it is hard to just drag it alone. It is better to move on and build up momentum on new product/services.

  3. I’m not understanding your problem, Sandy. Mike has Audit Shark with beta testers and is trying to finish code and deal with contracting other programmers. When balanced with doing work for clients to pay the bills, progress can be very slow. You could say he should have targeted the web industry rather than banks originally, but hindsight is 20/20. It sounds like AS is far from a dead project to me, and that it’s getting very close to launching. It’s taken time and I’m sure Mike wishes progress would have been quicker, but there’s little he can do about that now apart from push forwards.

    Personally, I like knowing that sometimes building a product on the side of consulting/freelancing takes time and that progress can be a struggle. I’m struggling to find time to work on my own product too, and knowing Mike is grinding along is an inspiration to me. Giving up on a project which is so close to launch would be a waste of all of his effort and investment.

    Some thoughts on the (potential) book:

    He hasn’t said what it’s about, it could be about securing servers, and act as marketing material for Audit Shark. Alternatively it could be about launching a software product as a consultant, so would be more about compiling up information in the podcast episodes and adding more. Neither of these sounds like a bad idea.

    On the other hand, it could be something completely unrelated and is what Mike’s using to relax away from code and projects. That could be a good thing as it may help him prevent burn out. However, I think this is the least likely option as I don’t think he’d have mentioned it in this episode.

    If you were to criticise anything as a distraction from AS, surely it would be Altiris Training? I was unsure about that, but view it as a kind of side project to make a little money and complete quickly, so Mike could see he could make progress and launch something. That can be very helpful if you’re stuck in a project that’s taking much longer to build than you expected, and can give you some confidence and momentum back in everything you’re doing.

  4. Hey Paul, great comments.

    Again, it’s nothing personal towards Mike. I am employed full time and am married, so I know how hard it is to work on your own projects during nights/weekends, and have plenty of failed ideas.

    I think the issue is, if you look (or listen) back on old podcasts, it’s ALWAYS the same ol’thing with Audit Shark. This bug, or that bug, this issue with his contractor, that new feature, etc. but no real progress. Sure there are beta testers, but how many, and does this really represent a market?

    What happened to creating a MVP? What happened to failing early? What happened to solving a problem people are dying to get solved? (great read btw: http://paulgraham.com/startupideas.html )

    The podcast’s slogan is “a podcast that helps developers, designers and entrepreneurs be awesome at launching software products”, however in Audit Shark all I see the exact opposite of startup common wisdom.

    This provides me nothing as a podcast listener.

  5. Hey Sandy,

    I’d see what you mean if we were about 3-4 months ago, when it did seem Audit Shark was flatlining. However, since then Mike has re-focussed (I guess ‘pivoted’ is the current slang) on to a different market having had problems communicating with banks, has set himself a deadline for getting the beta test running and how has it out there to a very limited audience.

    This is why I think he has buckled down and is back to getting somewhere with the project. I’m not saying it’s fast, but I think there is some useful progress.

    I’d compare this favourably with, say, the AnyFu project run by Justin and Jason who produce the TechZing podcast. It seems like a great product that they are constantly not finishing for one reason or another, mainly distracting themselves with new projects – building a mobile product for one of them, teaching his son and other children to code for the other.

    Although I enjoy listening to TechZing, J&J’s self-distracting behaviour regularly makes me want to bang my head against the wall, whereas I feel Mike and Rob tend to push each other forwards a little more. Hence why I find Mike’s progress, however slow, something I admire, rather causing more dent making.

  6. I only infrequently listen to the TechZing podcast, but I understand what you mean. Also, I didn’t know Mike had set a public deadline. This is good. I guess we’ll have to wait and see what happens! In any case, there are good lessons to be learned either way.

  7. Sandy, Paul is correct. The book I’m considering writing is in fact, security related and will be used to help do marketing for AuditShark. I consider it to be a long term play, just like AuditShark.

    Also, you may not agree with me on this, but I feel really good about where AuditShark is at today. That’s not something that I could have said 2 months ago when I felt like I hit a brick wall and my morale dropped like a stone. But I ground it out, did what needed to be done, and things are looking good again.

    This month, I’m on the verge of launching a viable product. To quit now would be nothing short of foolish. At the very least, I need to see where the cards fall but from what I’ve been told, customers really want & need this type of product. You may not need it, but a lot of people do.

  8. Hey Mike, we’re all rooting for you, seriously.

    The thing is I’m (and probably “we’re”) not learning much from hearing about your database issues, and about the people you’re hiring, etc. I have enough database issues on my own stuff, and have my own stories regarding outsourcing work.

    For the podcast to be useful to people, you should give some kind of insights I wouldn’t have arrived at myself. We want to learn marketing tips, to hear about a real world project making a quick MVP and getting feedback, etc.

    In startups, “failing” is not real failure, but it’s more like discovery. You discover that there is no market for X or Y product, or that there’s no market for your product at this moment in time, etc., so failing shouldn’t be seen as a bad thing. It’s only bad if you ignore common startup wisdom and take 3 years to build a MVP.