Episode 120 | Growing Your Business Past Employee Zero
[00:00] Mike: This is Startups for the Rest of Us: Episode 120.
[00:10] 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.
[00:18] Rob: And I’m Rob.
[00:19] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. How you doing this week, Rob?
[00:23] Rob: I got a call Sunday night from one of my developers. We almost never speak on the phone. I picked up the phone and I said, “Uh oh.” And it’s Sunday night about 7 p.m. and he says, “Do we have a backup of the database?”
[00:34] Mike: Oh no.
[00:37] Rob: I was like, “Ah, yeah. What happened?” And as he’s talking I’d said, “You forgot the WHERE Clause.” He forgot a WHERE Clause on an update statement.
[00:46] Mike: Oh.
[00:47] Rob: I’ve done this twice in twelve years where you just you say update the table set this column equals that and you know, for those non-developers out there, then you’re supposed to say, “Where the I.D., customer I.D. equals 123.” So, you only update one row. But if you leave that WHERE Clause off, you update the entire table every row to the same value. And so, if you only have 50 rows, that’s fine. If you have 5 million rows, they all get updated. Now, it turns out it was a small table. It’s 4,000 rows and luckily enough, it was not a table that’s used in real time. So, it’s something that’s used in [Audio Glitch] on billing process. So, I was able to just – we stopped the billing process.
[01:26] I was going to run a few hours later and then I got in touch with our DBA and that’s one of the benefits of having a DBA is he has all – I’ve asked him just to have up-to-the-minute backup since so he could basically restore to a point in time. So, I said restore to like 7:15 p.m. Pacific Time, you know, because he ran the query at 7:20. He’s on UK time. So, it did take a couple of hours because I don’t want to wake him in the middle of the night for something that wasn’t basically wasn’t taking down the app. But once he got the message, it was like 20 minutes later, everything was restored and it was fine.
[01:57] Mike: Yeah, I’ve done that in the past at least once or twice myself and I’ve learned if I have an update statement that I’ve written, what I’ll usually do is I’ll comment out just like the update part of it and I’ll do a select first to make sure that I’m selecting all the rows that I actually want to update.
[02:11] Rob: Yeah, I’ve seen professional like DBA, you know, 24/7 DBA guys do that and that’s what I do now too. Like I said, I’ve done this twice and the first time I did it was through an Oracle database and has the rollback capability because you have to commit. And so, I saved myself for the rollback. The second time I did it, there was a way to reconstructing the data and I’d just had to spend about an hour doing some manual stuff. And realistically as we talk through, there’s only, you know, myself and these two…two other people like production database access so – as we talk it through, they’re were ways, you know, if we didn’t have a backup or the backups had failed or something, there was a way to manually reconstruct this data that would had been a pain where we had to pull it from a couple of different sources. But it was like always not lost and realistically the app, you know, wouldn’t have been sunk. So, but it was a funny – it’s such a funny quote, “You know, do we have a backup of the database?”
[02:59] Mike: Yeah, those are words that you just never want to hear? Did you put that out on Twitter because that would have been a great quote?
[03:05] Rob: What’s been going on last week?
[03:06] Mike: I’ve been doing some more work on AuditShark for the self-updating policy builder and that is finally working. It’s taken forever to get it working but it got to the point where we had to read through the source code. I didn’t read to the source code but my developer did in order to get the installer working because we were using a WiX toolset which is open source but it’s not documented real well. So, he had to restore it at one point to just reading through the source code to figure out what different pieces he did and how to make it work and do what we wanted to.
[03:33] So, at this point everything seems to be working. You can just install it and then everytime you run it, it double checks to verify that you have the latest version. If you don’t have the latest version, it just doesn’t self-update which is pretty awesome. It seems to work even if you have like UAC running. It just asks you if you…if you’re okay with updating that and just go through and update it and everything seems to be working pretty flawlessly.
[03:54] Rob: Nice. And this was a little bit of a hang up for your early access.
[03:58] Mike: Yeah. It kind of – it put the whole early access on hold for much longer than I would have liked. I mean it didn’t seem like this should have taken as long as it did but because of all the issues that we ran in to with it, I am not real happy about where the early access is right now. So, I feel like I’m behind schedule on a lot of it and I haven’t talk to nearly enough customers to understand what’s really important to them so far. So, I’m really considering just kind of extending the early access to get more of that feedback and bring more people on to it because that was really just holding me up and until that was done, I couldn’t really add more people to it.
[04:31] Rob: Right. Yeah, I definitely think you need to get more feedback from more people because it doesn’t sound like you have talked to enough at least when we’ve talked in the podcast. It sounds like you have a few people who have given you feedback but not…not enough that you’ve made like drastic changes if needed. I mean in the interest of accountability like the original early access was supposed to start at September 10th I think and you started it in and then there was something wrong and you – I think you spent about six weeks fixing it. And then I don’t remember what happened in October-November but I don’t know if the holidays got in the way or what but – so you’re now, you know, you’re several months in to essentially early access. You kind of started one and then stopped it and then restart it again in January. Do you have a tight timeframe for this one for like extending it or what…what are you thoughts at this point?
[05:14] Mike: I wouldn’t extend it by more than a couple of weeks I don’t think and not must something drastically serious comes up where people are trying to use it and just doesn’t – it out right, it doesn’t work. The other question is whether I release it without the full-blown Linux support which I probably would. I would probably just launch it and there are pieces that my developers built in which allow me to turn on and turn off different functions based on whether flags are set on their accounts so I can say, “Okay, we’ll turn Linux support on for this account and not that one,” for example which is kind of a neat function to have.
[05:46] So, I’ll probably just kind of plow forward without having full-blown Linux support in there and you know, with the — on the Window side just, you know, move forward with what I got. But I really like to get some more feedback from people as to what they think of how it operates or certain reports they want or things like that. So, I don’t think that would extend it by more than probably three weeks or so. But I do want to get some more people sign on to it and get some feedback from them.
[06:08] Rob: So, coming back to that Drip landing page split test I was running last week. If you recall, I had kind of a stripped down minimalist version and then I had a heavily designed drop shadow which is going to be the final marketing version and they are split tested against each other. And so far, the minimalist version is just trouncing, absolutely trouncing. I think it has 500% more conversions. The highly designed version which almost makes – that’s such a big difference that it makes me think there are might like either someone is messing with me because they know that I’m doing this or there’s like a cookie issue because I was running a split test right before this one and there’s somehow the cookies are overlapped or something.
[06:49] So, I think I’m going to like totally restart it and see if I get the same results. If – and if I do, then I need to seriously look at like what to do in terms of the marketing side because I don’t just want to turn on a design that’s not converting.
[07:00] Mike: I might either go ahead and put either Inspectlet or Crazy Egg on there just to see where people are actually going through and measuring it for a couple of days to see what people are doing when they get there.
[07:10] Rob: Yeah, that’s a really good point. Actually Inspectlet where it records the mouse movement, that would be a really good one.
[07:16] Mike: Cool. So, what else you got going?
[07:18] Rob: Last thing I’ve been working on is over the past week, I’ve migrated about five more sites to WP Engine and you know, DreamHost is – man, I’ve been on there since 2005 and for the first probably five or six years, they were solid. I mean they were really just a great value for the money. I always need one a high end host but they have just had at least with my server I’m on a really old server, right, because I’m eight years old and it’s – the stuff is getting slower and slower and slower and I’m needing to pay more money because I’m on a VPS and I have to crank up all the usage, the bandwidth and stuff. There’s no sites I even have left on DreamHost that are using many resources. They’re just not high volume sites. The one thing I can think of actually is our podcast episodes are on there, like the actual mp3s and I know that it’s like what is it? A terabyte or something a month?
[08:08] Mike: Yes, something like that.
[08:09] Rob: Like a terabyte a month of download but geez, it should be able to handle that, you know. You know, as a result of all these, the MicroConf site is now stable. It’s up on WP Engine. It had two outages within a week. Knock on wood, I shouldn’t have that again because WP Engine is a much, much more stable and faster environment. And then I also got several blogs and some other kind of more critical sites. I think now all of my really critical sites are off of DreamHost on WP Engine.
[08:34] Mike: Yeah, I started to move over. The – the podcast site, I haven’t quite done that yet.
[08:38] Rob: Yup and then once you do that, we’ll need to think about moving the actual audio, the mp3 files as well because they’re on my DreamHost account.
[08:46] Mike: Cool.
[08:49] Mike: Today, we’re going to be talking about how to bring people in to your business so that your business can move to the next level because obviously, it’s extremely difficult to do everything yourself. You need to bring people in who you can plug in to different areas your business and depending on what level your business is at and what you need done is going to kind of dictate the types of people that you bring in. So, that today we talk about the different types of people that you can bring in to your business, what sort of roles they would play, when is it appropriate to bring them in, when is it not appropriate, how to find these people and what they can do for you that either you can’t or shouldn’t or that other people couldn’t or shouldn’t do for you.
[09:24] Rob: Right and there are some people probably listening right now that are thinking I don’t want to bring anyone on. I want to stay the solo founder that I am right now, the solo-preneur and I don’t want to hire people because I don’t want the responsibility. And obviously, that’s a perfectly legitimate point of view and both you and I have done that or are doing that presently. Even if you’re doing that though, there are still a couple of these roles like I’m talking about advisers and virtual assistants that I would encourage you to think about doing because let’s stop believing that you really can do it really well all on your own. You can do. You can get halfway there. You can get most of the way there but if you want to achieve your full potential I’ll say or you want to grow faster or you just want some guidance and support, there are some of these roles even if you’re not going to hire an employee, you’re not going to hire someone fulltime or a part-time on a regular basis, there are still help that you can and should bring in to outsource certain tasks and there are still those roles of like advisers or mastermind fellows that I think are critical even if you truly do want to stay that solo-preneur.
[10:24] Mike: So, the first one we’re going to talk about today is the intern. I think that when you’re talking about an intern, you can do either a paid internship or an unpaid internship but at the end of the day, I mean you’re still talking about somebody who’s essentially an entry level employee. I think the real draw back to interns is that because they are low level, because you have to spend a lot of time training them, it may not necessarily be worth of your time because of all the extra time that you have to spend doing that training and training is very time-intensive.
[10:52] It’s very mentally-intensive to make sure that you’re on top of what they’re doing and making sure that they’re doing the right things because if they’re doing the wrong things, then not only are you spending that time with them trying to train them but then you have to go back and you have to still do the work in anyway in – whether that’s having them redo it or correct them, you’re going to basically sink a lot more of your time than you would if they just did it right the first time or if you paid somebody who was much more skilled or experienced to do that work.
[11:20] Rob: Yeah, I think defining interns as someone who’s entry level but has an interest in learning about the field and I guess probably a pretty good way to define it and I’ve always been hesitant to hire an intern. I’d say over the past three years, I’ve averaged two requests per summer college students or grad students who are in like digital marketing or you know, majoring at something dealing with online marketing who have e-mailed me and wanted to intern. And I’ve really struggled with a decision and everytime I got the e-mail because the person A) is taking initiative and so I know that they’re probably going to be someone who gets things done and B) it’s just – I just like to help people out like to give back and teach. I’ve decided not to do it after a lot of thinking and talking to people.
[12:06] The other thing is I almost feel like if someone is going to come and work for free or work for a really, really low stipend which is typical – I think all the ones who have offered have said they’d work for free. Its just kind of – it doesn’t seemed right to me like it seems like I’m getting something – I know they’re getting training but it’s like if I’m trying to do it to save money, but I’m just having to invest a bunch of time and that equation…that equation doesn’t work for me, you know because my time is – I value my time really highly. And so I’d almost rather find someone who is already experienced and pay them like fair wage for their time and probably have more time for my business and then give back to the entrepreneur community through these other avenues.
[12:46] So – but I do know people who have hired interns and have had great success doing it. I know founders who’ve done it. I know that Dan Andrews has his Tropical MBA Program where those people who have a little more – tend to have a little more experience than what we’re talking about but the cost is not very high and they do come in with the attitude of learning. So, I know that it can definitely work. It’s just not something that, you know, has work for me personally in the past. I’ve opted for one of these roles that we’re going to talk about.
[13:11] Mike: Right, I think that the situation where interns would actually work really well is if you’re trying to grow your business and you are looking in to intern program as if it’s a method of bringing people out of college and vetting them before you hire them because you’re going to get a lot better view of what somebody is like as an employee when they’re an intern than you will in like a 45-minute or a 3-hour interview. I mean you just get a much better idea of how somebody works, working next to them or having them report to you for two, three, four months than you do in just going through the regular interview process because there’s a world of difference between those two things. So, the next one we’re going to talk about is virtual assistant.
[13:54] Rob: I’m actually down to three virtual assistants right now. I don’t include developers, designers, product managers, any of those technical roles in virtual assistant bucket but I have three working for me down from I think at my peak, I had six. I’ve hired about 15 over the past probably four or five years and some have they just not worked out and then others have had to move on like one went to grad school and so couldn’t do VA stuff anymore. And then others I’ve, you know, decided to let go or just kind of wound down the projects that they were working on.
[14:25] But I’ve always found a lot of value in finding someone. I mean the nice part about a VA is you can typically find someone who has experience in the area that you need help with, right? So, you have someone who’s already trained. I mean they may not be highly technical person or a highly, you know, design-oriented person but you don’t hire them for that kind of stuff. You hire them for admin work and research and responding to e-mails and other tasks that are just hard to get done and you kind of just need a jack of many trades, like a non-technical jack of many trades. I am putting out a video course on how and why to hire VAs if you have a startup and if you’re interested in that, you can go to softwarebyrob.com and there’s an e-mail newsletter signup in the upper right and that’s where I’ll be mentioning that.
[15:07] Mike: I think the biggest advantage that I’ve found with the virtual assistants is using them to as more of a human filter to whittle down vast quantities of information in to something that’s consumable. So, I’ve used VAs to go out and search for like themes, for example, if I’m putting together a WordPress site and I need a theme for the WordPress site. I’ll point to several of them and say, “These are kind of what I’m looking for. Find me 10 or 12 other options that are close to this one,” because that’s something that you can’t have a computer do it and even if you could, it would take forever to build a program that would actually go out and be able to do that for you.
[15:43] So, having a human sit there and look through those and use their brain to kind of figure out what it is that you’re actually looking for and then present you with those options is a great way to use a virtual assistant to cut down on the amount of time that you’re spending on something. And that way, you’re going through a pre-filter list as opposed to searching through tens of thousands of themes that are out there.
[16:02] Rob: Yeah, that’s a really good example. Ways that I’ve used a VA in the past, couple of months have included, you know, we have people cancel HitTail, right and during the trial and then we have some customers cancel and I wanted to e-mail all of those over a certain period of time and say, “Why had you cancel,” you know, because they didn’t give us – they didn’t have give us a reason or didn’t give us a full enough reason in the cancelation form. And I wanted it to be personal and come from someone on the team and I also wanted someone to just be able to hit reply when they get the e-mail and send it back to us.
[16:31] So, yes, I could write a script to send a bunch of e-mails, you know, but by the time I do that, I had a Google doc spreadsheet that I sent to the VA and I just said, “E-mail them all and here’s the form. It’s short. All they have to do is hit reply.” And then he gathered up those responses, put them on Google docs and he actually arranged them. He didn’t just spit them in there as a big chunk of data. He actually said, “You know, three people said the similar thing.” And so, it’s like you said, he took a large volume of manual information and did something that wouldn’t have been easy to write a computer, to sift through all the responses and we’ve gotten a less responses and send them through a form instead of just saying, “Please reply and just let us know in one sentence, you know, why you’re responding.”
[17:09] And so, that was super helpful and actually, that’s where we did operation retention based on putting all of those responses. And that’s how I do. I view virtual assistants as a form of human automation. It’s a way to automate things that you may down the line want to do and code or that maybe just a little too hard to do with software but that having someone’s help can just help save you as a founder so much time. Hopefully, on a recurring basis as someone you should have at first or for these one-time projects like you and I just mentioned.
[17:38] Mike: The other thing is it’s faster to write down a process and hand it to a virtual assistant and have them go through it and than it is code up any sort of computer program to go through it automatically and although it may be less expensive in a long run to do that depending on what the actions are, you’re going to get somebody sit in there and looking at those things and you’re going to be able to hand them this process. They’re going to be able to execute it within five minutes after you hand it to them as opposed to computer program which might take you weeks or ever months to put together.
[18:05] Rob: Right and you know, a founder, a friend of mine who has a successful SaaS app, he was still answering e-mails like all the support e-mails. He was doing tier 1 e-mail support up until – it was probably three or four months ago, he said it wasn’t taking him enough time for week – per week that he didn’t think it was justified to hire a VA to help him out with tier 1 support. Now, once he did, he was just like, “I cannot believe I didn’t do this sooner,” you know, because it’s not about the sheer volume, it’s like, “Oh, it’s only three hours a week,” but it’s all the little interruptions that you get along the way and it’s having to wait of those sitting in a queue somewhere, they have to come back to five, six days a week, you know, several different trigger points during the day, you want to check in because you don’t want to be 24 hours before someone hears back. And if you can just get someone on board to help out with you even if they are only spending a few hours a week to start, it’s invaluable towards removing that mental burden.
[19:00] Mike: So, the next one is a contractor. And I think that both you and I put contractors in basically the same boat where contractors are a technical step up from a virtual assistant. So, whether they’re doing video editing, audio editing, software development, design work, copywriting, those kinds of things, that’s generally the role that a contractor fills for you. And I think the differentiation between a contractor and a consultant which is the next thing we’ll talk about is that a contractor is somebody who’s coming in on an hourly basis and you put together an idea of what it is that they’re going to be working on and if you need them for one hour a week or you know, 25 hours a week, they’re going to come in and they’re going to do that work for you. But the expectation is that it’s more on demand than anything else.
[19:47] The difference between a contractor and a consultant is that a consultant tends to come in as a highly specialized person in one specific thing. And I differentiate between contractors and consultants because consultants come in for a very short period of time, you have a very specific problem that you want to solve and they tend to be much more expensive. Now, you might hire a contractor to come in and do some graphic design work or design some e-mail templates. And I kind of put that person in to a contractor role even though it is a short term gig but the fact is that they’re much less expensive whereas if I wanted to hire a high-end SEO consultant or a high-end SEO contractor, the ideas that, you know, that person is there only for a short period of time and the value that they’re going to be delivering is extremely high to you and that is why you’re paying them, you know, these vast quantities of money as opposed to a contractor who is still providing value to you but it’s not necessarily the same level as a consultant comes in.
[20:44] Rob: I think the point that what you start to think about bringing contractors or consultants on are if you have a little bit of money and if you have, you know, either from your day job, if you’re bootstrapping or from the product revenue perspective, if you’re actually launched already. That’s a thing with contractors and consultants is they’re more expensive than virtual assistants and interns but they free up your time assuming you can afford someone that’s reasonably good and you hire well, this is where you really start leveraging someone else and freeing up vast quantities of your time.
[21:15] Virtual assistants are great first step for that but as soon as you can bring someone in the help with development or to help with, you know, even if you’re good at design to help expedite data and get something done quicker, that’s really when I think about bringing contractors on. And consultants, I’ve always brought them where it’s like I have a task and I don’t know how to do this or it’s going to take a really, really long time for me to do this like a huge chunk of my time.
[21:37] Most recently, when I acquired HitTail, I brought a DBA on basically as a consultant to help migrate the database, you know, that was 2 or 300 gigs, to migrate it from one datacenter to another. We had an overnighting of a hard drive and all types of crazy set up to keep stuff in sync and real time. Now, the cool part is that he then came on board on a regular basis to do all the database maintenance and the backups and the point in time restores when I need him to do so. And so, he actually made kind of the transition. I still consider him as a highly trained expert and experienced consultant but it’s nice that we now have that relationship that I can tap in and say, “Hey, you know, we have this one big thing. Can you…” I mean he’ll write queries for me sometimes, right? He’s just billing hourly but all the pretty complicated query on a pretty gnarly set of tables that I want to do join on I have him run it through to make sure, you know, is this legitimate.
[22:29] But the thing is as if HitTail wasn’t a profitable app, I probably wouldn’t have dropped the money to bring him on board in the first place. And so, I think that’s the point. Money shouldn’t, you know, it can’t be the thing that keeps you from bringing on someone experienced to help leverage your time but at some time you have to be realistic and you can’t just go out and spend 5 or $10,000 on a website design when you really should be using that for other marketing tasks.
[22:54] Mike: So, now that we’ve talked about a lot of, I’ll call them more temporary workers, why don’t we talk about the next one which is the employee. Bringing in an employee in to your business I think is a huge step. It’s a world of difference between a having contractor or consultant who comes in and doesn’t work for you and if you don’t have any work that you have to send them or you don’t want to send them any work because you’re trying to conserve money, then you can totally do that. But with an employee, you’re making a lot of commitments and there’s an obligations that you’re undertaking in order to pay that person’s salary and you have to be able to meet the revenue targets in order to support that employee.
[23:29] I think one of the big things that most people don’t think about when they’re hiring an employee is all the additional overhead cost that come in with hiring an employee because you have to pay employment taxes. You typically have to cover health benefits. There’s all these things especially when people start to get further advance in their career and they start thinking about things like, you know, planning for retirement like, well, do you have a 401(k) plan or a 529 college savings plan and things like that and those are things that, you know, kind of the overhead of having an employee.
[23:58] Rob: I think the role of employees in tech startups has been changing and I think it’s going to continue to change. Most of the startups that are early stage that are hiring employees, they either have funding or if they’re bootstrapped, they just have to be really, really strict about who they’re hiring and bring people on slowly and do their healthcare costs in the U.S. Most of like the tech startup workers I know don’t have healthcare unless they work for a large company like a Facebook or Google, someone who has a lot of funding. The mentality of I’m going to work for the startup in exchange for, you know, I’m going to exchange kind of those typical benefits of the 401(k) and of the medical, dental insurance and I’m going to instead get stock options and I’m going to get this exciting and fun job.
[24:43] And so, I think that puts pressure, you know, a downward age pressure for sure on the startups that I see hiring in terms of, you know, you can’t get – it’s going to be really hard to get someone who’s 40 years old and married, has two kids to come and work for you if you can’t offer all that stuff. But at the same time, you know, if the expenses is too overwhelming then that’s probably the reality for them as well.
[25:04] Mike: So, the next step from an employee is a co-founder or a partner in the business. And with a co-founder or partner, most of the time I think that when you get in to this situation, you’re doing it upfront, you’re probably working on the business on the side until it gets off the ground and starts getting revenue. And you’ve – hopefully, had those conversations about, you know, how to structure things, ownership, vesting, those kinds of things before you start making any real money or you start running in to any problems where those discussions that should have been had are going to become a problem because you didn’t have them. And you know, a co-founder or a partner is completely different than having an employee or contractor or visual assistant because they are complete vested in to the business or hopefully, vested in the business.
[25:46] Rob: Yeah. Didn’t Paul Graham said that one of the top two reasons that startups have issues from what he sees on Y combinator is founder issues, founder disagreements?
[25:54] Mike: No, it was on the top ten. I just don’t remember what number he used for that.
[25:58] Rob: Yeah. So, it’s – as always it’s like it’s – there’s never – a never or – I never have a co-founder, I always have a co-founder. It’s just finding the right person and finding the right fit both with the business idea and finding complementary skills. I have seen over and over founders get together who are both developers and that just doesn’t make a lot of sense to me, you know. It’s like you need to find someone who can do the marketing stuff, someone who can do the design stuff or someone who can do this, the development stuff, someone who can do, you know, the sales and the admin and manage a VA. I mean there’s all these skills that need to get done and so if you overlapped heavily on a single skill, you really are not multiplying your gene pool there and covering the basis that need to get done in order to actually launch something.
[26:42] Mike: Right but I think that there’s another side that you have to look at as well. I mean if you don’t have overlapping skills, it’s very difficult to take over responsibilities from somebody else. I mean it’s so – for example, if you get a marketing guy together with a developer, they may work very well together by separating their duties but what happens if the marketing guy needs help or the developer needs help? I mean at that point, then you have to start looking out side of those two people because the other person just didn’t have the capability. I think there’s got to be enough of an overlap but not too much as you said.
[27:14] Rob: I think I would err on the side of having less overlap.
[27:17] Mike: So, okay. So, we’ve talked about interns and virtual assistants, contractors and consultants, employees and co-founders. And I think the last one that we came up with was an advisor. And I think there’s a couple of different ways that you can have an advisor. You can have an advisor who is strictly high level person, somebody who you go to and just talk to as more of a mentor. And then I think that there is other advisor who you look at, somebody who owns their business, who is also an entrepreneur, kind of more of a peer than an advisor who has, you know, run their own company in the past.
[27:49] Rob: I’ve seen this structured in many different ways. I mean with funded companies often someone to bring on an advisor early and then they’ll actually give the advisor half a percent or 1% of the company and they’ll have the contract, I don’t know if they put in writing but they’ll say, “You know, I expect you to – I expect that we’ll have a 1-hour phone call each month and that you’ll answer my e-mails every week.” I’ve also seen some informal relationships where you, you know, just say, “Hey, will you answer my e-mails,” or “Can we do a call when needed?” And you’re just kind of doing it to help the person out. You probably have a relationship with them of some kind or you just know they’re going places so you want to be a part of that.
[28:27] And then like you said, I’ve seen mastermind groups where like you said it’s more of a peers giving each other advice and then encourage them and help. And I would encourage you that if you are going to get in to mastermind, to try to find people who are ahead of you in that process rather than someone who is either behind you or at the exact same level because it’s just – it winds up being hard to actually get actionable advice if you’re all just stumbling around kind of doing the same things, you know. Whereas if someone six months or a year ahead of you and they – it tends to be pretty fresh in their mind and they’re going tend to have some really good suggestions for when you hit road blocks.
[29:06] Mike: I was reading something recently that heavily advocated for if you’re going to be giving any part of ownership of your company, any equity at all to an advisor then you should definitely have a written contracts and a vesting schedule that goes with it because some advisors just simply don’t work out.
[29:22] Rob: Yeah, that totally makes sense. I mean I would say any time you’re giving anyone equity for any purpose unless it’s a tiny, tiny amount of equity for a very specific task they’re doing that they should…they should vest overtime because otherwise, you can sign this agreement and now they own this thing and if they disappear, they still own that part. And that’s a major problem. So, I have a question, Mike. So, should everyone have an advisor? Do I need to go seek someone out? And if so, how do I do that?
[29:48] Mike: I think if you’re having specific issues that you are fully aware are issues that are going on right now that you need assistance with, then I would definitely go talk to somebody. Do you need to have that person come on as a full-blown advisor? No, not necessarily. What I would say is that if you happen to stumble across somebody who you think would make a good advisor, then definitely leverage them and try to use them as an advisor. But I don’t know as I would go out and consciously seek an advisor. And the reason for that is that I think that when you start looking at advisors and you’re trying to evaluate different people for advisors, I think that it takes your eye off of the product that you’re developing or the marketing that you’re doing.
[30:28] And it’s not to say that having an advisor couldn’t help you with some of those things but at the same time, if you shift your focus from building your products and talking to customers and doing all the things that are associated with building your business, then you’re no longer doing that and you are – you’ve kind of shifted in to – I almost think of it like a situation for companies that are looking for funding either they’re building the product or they’re looking for funding. And if you’re not – if you’re looking for funding, it’s kind of an all-consuming task and you’re doing that instead of building your product and making a business.
[30:57] Rob: I also think you need some kind of traction with your product before you can basically do a cold intro and find an advisor because you can’t just e-mail someone who’s well-known and say, “Hey, be my advisor,” because they get e-mails like that all the time and there are too many products out there that they…they can’t possibly advice everyone. And so, if you have a network and you actually do know some people who could be advisors, that’s one thing, right? And then it’s an easy one-shot email, “Hey, I’ve finally decided to launch my app like we’ve talked about before. Would you, you know, answer a few e-mails if I send them over the next few months,” and started off informally and then accelerate it if needed.
[31:33] Now, if you just have no contact and it’s all cold, then you are going to need something more than that. You’re going to need an e-mail that’s like, “Hey, I launched. I have traction and I have a couple of sticking points. Right now I’m looking for an advisor, could I send you some e-mails?” And that time, at that point then you actually like you said, you have something that you’re trying to deal with.
[31:55] On the flip side, I’ve found a lot of value in there being people who on an ongoing basis are kind of almost sharing in my journey because they know – they’re really sharing in the journey of the product I’ll say because you don’t have to give them rims of background. You don’t just say, “Hey, I have a SaaS app and here’s what’s happening,” because they’re probably going to tell you some suggestions that you’ve already tried. But if they’ve gone through the journey of the app with you, then they already know what you’ve tried, what you have and it’s just way easier to get that feedback.
[32:23] And that’s where I don’t have advisors as much as I have the mastermind groups that I’ve talked about where people every two weeks, I meet with them either in Skype or in-person depending on the group and they get to hear an update on my app. Even if I don’t have a major issue that week, they get to hear where it’s going, some things I’m thinking about. I’ll always ask for some feedback but even if there’s not a major point of guidance, at least they’re now updated and so, in two or three months when I do have that major point, they know the history cold because they’re heard it, you know, in real time as it’s happened. And that’s been my avenue for finding kind of filling that advisor role with my businesses.
[33:02] Rob: If you have a question for us, call us at our voicemail number at 888-801-9690 or e-mail us at email@example.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 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.