Show Notes
In this episode of Startups For The Rest Of Us, Rob and Einar Vollset talk through the different kinds of corporate entities, how they differ, and how they can impact you in the future.
Items mentioned in this episode:
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve build your first product or you’re just thinking about it. I’m Rob.
Einar: And I’m Einar.
Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, sir?
Einar: You know, it’s same old, same old. I’m mostly spending my time arguing with lawyers and accountants and things around Tiny Seed. That’s always exciting. It’s probably been since before MicroConf it’s been nonstop lawyering pretty much. That’s both expensive and frustrating at the same time.
Rob: Yeah. I was looking at some notes I had from a couple of years ago, I found this old notebook, and I had some personal goals that I didn’t announce in the podcast but personal goals for myself. One of the bullets was, “I don’t want to talk to any lawyers this year for any reason.” It was like 2017 or something.
Einar: It’s been unavoidable for me lately. Mostly with Tiny Seed stuff. Actually the main hurdle–which I guess we’ll get into this later–has been there are lawyers who specialize in whatever. You wouldn’t go to a securities lawyer if you need to be defended for a hit and run. But you talk to lawyers and their specialist and the expensive ones for securities and fund formation and they have their way of doing it, and it’s the way that venture capital is normally done. Essentially, you’re having to spend $1000 an hour arguing with somebody about how things should be done.
Rob: Right. Trying to educate them that we’re not traditional venture capital. It’s not going to all be Delaware or C Corps. We mentioned early on to the lawyers, we’ve been now through a couple of different firms but we told early on, it’s going to be more bootstrap startups, that’s our thing. We’re going to fund LLCs, we’re going to fund C Corps and they’re not all going to be in Delaware but then when rubber meets the road, all the docs made the assumption of Delaware C.
Einar: Delaware C Corp, a ban on issuing dividends which clearly doesn’t work with us, and all sorts of things. It’s been quite frustrating and a bit more expensive than I expected too.
Rob: Yeah. Because we’re just going against the tide of so many funds, right?
Einar: Oh yeah. The standard is like we only take Delaware C Corporations, at a corporate level disallow any kind of dividends because people want to reinvest and just do Delaware C Corps and that’s it and issue SAFEs ideally. The standard one, which again, assumes that there is a price around coming. That’s been interesting.
Rob: Yup. And that’s really the impetus for this episode is to give folks a little more background in case you don’t know who you are, you and I have co-founded Tiny Seed, we spoke about this about 20 episodes ago. It’s episode 420, an alternative form of startup funding where we talk to Tiny Seed and the mission and all that.
Einar: Yup.
Rob: Folks can go back and listen to that if they want more background. But you and I are in the midst of getting this off the ground and we’re picking the first batch and closing in all that stuff. But really, legal has now become the bottleneck and it’s getting these terms in there and as we were knee deep in this having these conversations via email when I was London and then get back in doing calls and stuff, you brought up. You’re like, you know there’s a lot of misunderstanding or just lack of knowledge with startup founders about the different entity types. Granted, this episode we’re going to focus on US entities, and there’s a few reasons for that.
One is even if you’re not in the US, a lot of folks do start US entities, they’re going to take any funding or if they’re going to cater to the US market or there’s tax reasons, there’s a bunch of reasons. If you’re living in Europe right now, some of this still may apply to you. You very well may wind up setting up a US entity at some point. But even beyond that, what I’ve often seen is while laws don’t translate one to one, there is generally in England, and in most of Europe, there’s the equivalent of these things, an equivalent of a C Corp that has double tax. And there’s equivalent of the LLC even though it’s not called the same thing.
Einar: That’s right.
Rob: The standard disclaimer applies, you and I are not lawyers, this is not legal advice and all that. But damn it, I kind of feel like I’m becoming a lawyer.
Einar: We’re going to go and ask all around, this is a plan whose […] all the Tiny Seed stuff and sign up […].
Rob: That would be my worst nightmare. We’re having to get pretty knee deep into it and I think the fact that traditionally bootstrapped companies typically form as LLCs or S Corps. And VC backed companies almost always form as Delaware C Corps, right?
Einar: The standard thing in YCs, you come into YC and you have A another entity, a foreign entity, or no entity, they kick you to I think it’s another YC Company, Clerky? And they just spin you up with like a, “Here’s how to do a Delaware C Corporation, that’s what you need in order to get the investment from us.”
Rob: Yup.
Einar: That’s very much to stay. With their investment structure, and YC is so dominant that pretty much whatever YC does on the accelerator early stage fund side, that’s what everyone else copies. It becomes a Delaware C Corp and a SAFE.
Rob: Right. What we’re going to talk through today is talk through the different corporate entities. We’re going to attempt and not make it the most boring episode ever of this podcast.
Einar: You should call it the most boring episode ever.
Rob: That should be the title, that’ll be something. And we’ll touch on points like liability versus taxes. Any tax is really the big thing with most of these, right? Because once you have an LLC, S Corp, C Crop, you do have a certain amount of liability shield. I’ve heard that if you’re a single member LLC in certain states, if you got sued, court will often consider you a sole proprietor, you don’t have a liability but we’re not going to get into that.
We’re going to talk a lot about taxes today because that’s the thing. Because if you pull dividends out, how are they taxed differently?
Einar: How you mean different? That’s the difference between a traditional YC Venture style company and like a bootstrapped “lifestyle” business. You’re going to basically go through several rounds of funding while you run at a loss. That’s the goal. It doesn’t really matter like tax optimization for dividends or the owners pulling out cash doesn’t really apply because there should be none. And in fact you might find that your investors are more than a little upset if you start actually running out of profit because that’s not the goal. The goal is become, burn all the money, dominate the market, and IPO.
Rob: Right. Raise every 18 months and if you’re not burning through that cash, you’re not spending it well, you’re wasting time and wasting their money. Because if they’re going to give you money and have you let it sit in your back account, it would be better served doing something else. That’s the mentality.
Einar: That’s true. Honestly, a lot of DCs will basically tell you they would prefer, like if you’re in a company that’s growing reasonably well. Tiny Seed or most bootstrap founders would consider a success so you get the $5 million, $6 million a year and you’re profitable but you don’t then need anymore a venture fund, that’s a loss for them. They would actually prefer you just to sell the company, pocket some money and try again and have a run at a bigger success.
Rob: Yup. That brings us into the meat of this episode. In the US structure, aside from just being a sole proprietor, there are really these three entities that are most common. I already mentioned them in this episode. Every Fortune 500 company I’m guessing is a C Corp. If you go public, you’re a C Corp. I don’t know that you can go public with other structures but that’s the big one and it’s as we’ve said, that’s what the venture capitalist typically Delaware C Corp. The nice part about that is there’s no past through income so that if you had a hundred different people on your cap table, you had a hundred different people or entities that owned a piece of your C Corp, at the end of the year, if you make a million dollars and keep it inside the company, nobody else gets taxed on it.
They’re like shielded from the taxes. It doesn’t count as income until you pull that money out of the company and actually distribute it to your shareholders.
Einar: Yeah, because that’s the challenge. That’s really the challenge with LLCs in that regard in general path through entities whether that’s partnerships, or a single member, or sole proprietor, or a C Corp doing it, S selection. You end up basically passing through whatever losses and gains to the people who own the company whether that’s investors or just the owners. You can be in a situation where there’s a gain but you’re not actually kicking out the gain so that there’s taxes to be paid but without any profits, any cash to pay for the investors. Which is partly why traditional venture funds don’t like to do it.
In some cases actually, the investors into the fund themselves, there’s a disregard of entities. They could be not for profits, they could be university endowments, they can be wealthy individuals who invest through like a self directed IRA. In most of those cases, they actually don’t pay taxes, so they don’t file tax returns. If you pass through a gain or a loss to them, all of a sudden they have to start filing tax returns not because of you, which is problematic in a lot of cases which is partly why it’s disallowed.
Rob: In my experience forming corporate entities, my consulting firm that then was this umbrella entity over all of my early small software products, and it still is frankly, I’ve changed the name of it now but it was called The Numa Group for years. I ran it for five years just as a sole proprietorship and then I made it an LLC. Certainly I wouldn’t have done a C Corp because I was just pulling up a bunch of cash off. That’s the thing we didn’t say.
The negatives of a C Corp, if you’re bootstrapped, the corporation itself will pay taxes at the end of the year and if you want to pull dividends out, you then pay another round of income tax. It’s called double taxation. If you’re pulling cash off a business, you do not want it in general to be C Corp. When I was forming The Numa Group as an entity and it was really more for liability reasons at the time just to shield me from anything. I could do an LLC or an S Corp and I was advised that an LLC, if you do a single member pass through LLC, that it has a less filing requirements, even less bookkeeping stringency complexity. I did that and that’s been fine. That was a good call for me.
When I went to spin Drip out, Drip started as just like hittail on all my other stuff, it was just under Numa Group LLC. Eventually, Drip got big enough for it has to be its own thing. When I spun that out, I could make it an LLC or an S Corp. Really, an S Corp as you said earlier, it’s just a C Corp with an S filing something or rather, like an option.
Einar: Yeah. It’s basically to do a federal taxes. You make what’s called a S Selection, and again, I am not a lawyer or a tax accountant, thank God, but you basically file an election with the IRS essentially you’ll be taxed in a very similar way to an LLC despite the fact that you’re a corporation. Doing so has benefits either from certain tax standpoints but it comes with certain issues related to it. For example, if you’re an S Corporation, typically becomes very hard to take investments, there’s a limit on the number of stockholders you can hold in the company, there is actually a limit on whether you’re allowed to have a non US persons as investors or owners. There’s a bunch of things that come into play there if you do the S Selection for sure.
Rob: Yeah. Because the advice we’ve been given is that Tiny Seed can fund C Corps and LLCs but we cannot fund the S Corps.
Einar: Definitely not, yeah.
Rob: Right. I didn’t know that. I believe it’s that another corporate entity cannot own a portion of an S Corp, is that correct?
Einar: I think that’s right.
Rob: Yeah. Again, not a lawyer but that was how it was explained to me but that was news because Drip was an S Corp and I didn’t realize when we formed it that that was a drawback. We hadn’t planned to take institutional funding. When we got acquired, I was looking around to try to do an angel round. That would’ve worked because it probably would have been a bunch of individuals but I just wasn’t aware of that at that time.
Einar: I think most people aren’t. You start up, people go to like Clerky or LegalZoom or ask their friendly neighborhood lawyer and it’s just like, “Oh yeah, yeah, yeah. Just do a single member LLC. Don’t think about it.” Or just do XYZ. in certain cases, people will optimize for their current tax situation but not necessarily for what’s going to happen if I want to sell the business or do a small angel round or that kind of thing.
Rob: That’s an interesting point because again, over the years when things were really simple for me, I just did an LLC and it filed its taxes as a sole proprietorship. Everything passed through to me, I didn’t take a salary. It was none of that. Now at a certain point, it started making enough money that my CPA said, “Look, keep it as an LLC but you file taxes as an S Corp and that allows you to now take a salary and you set a fair market salary, what does a CEO of a small software company make in the town you live in?” And since it was Fresno, it isn’t that high actually. “Everything above that, you just take out as an owner’s draw and then you don’t pay FICA,” is that social security?
Einar: Taxes and things or anything above that.
Rob: Yup. That’s a strategy that’s used by a lot of folks with both S Corps and LLCs filing as S Corps in essence. I think there are some number and I’ve heard varying, it depends on the CPA. My CPA said it’s when you’re making between about $60,000 and $70,000 from the entity. But I talked to someone the other day, they said their CPA told them $50,000 and someone else said $90,000. There’s some range in there.
Einar: My CPA is pretty mellow. She’s like I think $95,000. I live in the Bay Area too so she’s like $95,000 she’s fine with. I was like, “Why don’t we make it $50,000?” And she’s like, “Why don’t we not?”
Rob: Yeah. The salary?
Einar: Yeah, yeah, yeah. Because of the employment taxes in California held their own taxes on things on top of the Federal FICA taxes.
Rob: Right. It seems if you’re bootstrapping in business, the odds are pretty high. You’re going to do an S Corp or you’re going to do an LLC just because C Corp wouldn’t make sense. If you plan to raise venture funding, you’re probably going to go the C Corp route.
Einar: After you take funding from us. Maybe.
Rob: Yeah, exactly. Anyways, but it’s interesting because someone could go anywhere on the internet and research the taxes and stuff we just talked about but the interesting thing you and I are talking about before this episode started is the difference of if you decide to sell the company at some point, and the difference between if you never sold a company, you’ve never been thought about selling the asset within the corporate but not actually selling the corp itself versus a stock sale. Which is where you literally hand someone all the stock and they take the corporate entity with it.
Einar: Correct. Including the assets and liability crucially.
Rob: Right. That’s the thing that I’ve seen is, and you have more experience in this in the work you’ve been doing with Discretion Capital over the past couple of years. But my vague understanding has been that in smaller acquisitions, smaller meaning some $10 million, some $20 million whatever, they tend to be asset sales. Where you as the business owner, you keep the corporate entity and you keep all the liabilities in essence and the acquirer buys the assets, whereas if it’s some big, my guess is when Mark Zuckerberg bought Instagram, they probably bought all the stock.
Einar: Yeah. They bought the whole thing. Typically, a stock sale is essentially you’re taking the whole company, all assets, all liabilities, every single contract of this thing, including like if you buy a company and employee from three years ago sues you over something, sues the company, then you have to defend that claim. There’s a bunch of challenges around doing a stock sale. It includes the fact that if you purchase a company as a stock sale, that’s actually not as beneficial as doing it as an asset sale for the buyer.
With an asset sale, what you can do as a buyer, they come in and they say, “We want to buy just this specific piece. We might buy the technology, the goodwill, the existing contracts with customers, that sort of thing and we’ll explicitly exclude everything else.” Any liability that you sign, any contracts that they don’t want to assume, all that kind of thing will remain in the ship, was now essentially a shell entity. The other benefit which is often why buyers will push forward an asset sale, is that they get a tax break from doing an asset sale versus stock purchase so they often will pay more for exactly the same thing in an asset sale compared to a stock sale. And the specifics here gets into tax law and accounting. You definitely don’t want my advice on that.
Fundamentally, with an asset sale, what you’re able to do is to essentially reset the depreciation on those assets, and the value of those assets essentially becomes the purchase price. If you paid $5 million for an asset, my understanding is you essentially can reset the depreciation of those assets AKA those $5 million and then going forward, you can have that offset any income. If you’re doing a $5 million asset thing on something like this, it’s quite easily a million dollar tax break in the coming years which might translate to the buyers paying significantly more for an asset purchases.
Rob: The buyer gets that tax break, right?
Einar: Right. Essentially, you say like, “I bought this asset and it depreciates over time.” With the stock sale, you can’t do that. You’re just taking it over and essentially, you can’t reset the depreciation on the asset. Whereas with an asset sale, you’re allowed to do that which is so beneficial.
Rob: Right. Let me say that I bootstrapped a company, and for some reason I set it up as a C Corp because I think I’m going to raise funding at some point and I get acquired for $5 million but it’s an asset sale. Meaning they buy all the assets within the C Corp but I keep the C Corp. $5 million gets dumped into the C Corp, the C Corp pays income tax on that, then if I want to pull that money out to myself, I then pay my own personal income tax. You get double tax, it can be a huge amount of money, right?
Einar: It can be a really big difference. Because essentially, that corporate tax levels turn at least 21%. A lot of the time what happens is people essentially shot down the company because they sold essentially the core of it. They take the $5 million that goes in and then they’ll kick out whatever expenses they can but most people don’t have regular expenses that would wipe out $5 million. They then have to pay corporate taxes on it which is 21% and then they have whatever is left. At that point they can then pass it through to the owners. The benefit is that that can be long term capital gains, if you hold the company for long enough but it adds up quite quickly.
Rob: Whereas if you had that C Corp and it was a stock sale then, you would just sell stock and it’d be hopefully long term gains, assuming you own that stock for more than a year. But that’s the tricky part. Whereas if you had that S Corp and you would bootstrap it and it was an asset sale, then you’d save that 21% of extra tax. That’s the tricky thing. You don’t know what’s going to happen but you’re just doing your best to prepare for it.
Something you said to me, I’ve never heard of this but this almost sounds like a bizarre loophole is this qualifying small business stocks. Just to throw another wrench into this is if you have a C Corp and you’ve owned it for five years.
Einar: There’s a bunch qualifiers here. Although it’s like if you have the C Corp that was formed after this law came in. It’s a while ago now. Probably if you hold it for a fair amount of time, it’s probably after this date but essentially if after a certain date, if you formed it but on top of that you hold it for five years and it qualifies under these other criteria which I don’t have right in front of me but essentially they’re like sub $25 million or something like that and there’s a bunch of other qualifier stuff here. But if you do that and essentially your stock in the C Corp is counted as a qualifying small business stock, then you pay no federal taxes whatsoever including no long term capital gains.
Rob: That’s crazy. Is that if it’s a stock sale or an asset sale?
Einar: That would have to be a stock sale specifically on a C Corp.
Rob: Got it. Okay.
Einar: If you’ve done with an S Corporation election like a couple of years before, because that’s tax beneficial, then you don’t qualify.
Rob: There you go. It’s complicated stuff. I think what we’ve realized to turn it to Tiny Seed because we’ve been trying to figure out what can we fund, what should we fund. At this point, it looks like we’re able to fund C Corps and LLCs with some specific tax structures. I don’t think we can do individual single member LLCs due to some type of tax complexity or whatever.
Einar: Rob, it’s not even tax complexies. The fact that if we own a stake in that LLC it becomes a multi member LLC. It’s no longer a single member.
Rob: That’s right. You can’t do this thing. So it has to convert to a partnership. Now, it will mean that we have folks applying who might have a Colorado LLC so Tiny Seed will get a K1, which is an LLC equivalent of saying, “Hey, you own part of this and we file taxes and here’s a document showing how much your portion made or lost.” And then Tiny Seed will likely have to file a state income tax return in that state.
Einar: Income taxes and yeah, there’s actually even a question about whether our investors will then have to turn around and find their own income taxes in various plates. There’s a reason why the lawyers say, “You know just do the SAFE and the C Corp,” and why it’s more complicated doing this the other way. Certainly, most venture investing isn’t setup to do what we’re trying to do.
Rob: Right. And that’s been one of the challenges, that’s also one of the ways that we’re trying to change this, right? Is change this landscape to allow people to have an LLC and to take funding from essentially, it’s institutional. We are institutional money technically because we are investing our own money but in addition to other people who have put the money into our fund.
I think that sums up the feelings and the hots that we’ve been digging into all the stuff surrounding these corporate entities because frankly, I’ve been running a business for approaching 20 years now, different businesses. I felt like I had a handle on most of this and it turns out everytime I dig into this stuff I learn something new about it.
Einar: Yeah. That happens to me too. I had a conversation with somebody and this qualifying small business talk thing. He was looking at the sales business and I told him, and it turns out he qualified and he was quite surprised. Pleasantly so, I think. It’s an odd thing. You got to think about how easy is it to convert between the various things. If you’re already filed as an S Corp, it’s not actually straight forward, just to go back to a C Corp. There are some hangovers there.
Actually, different states treat these things differently. It’s not easy. It’s actually quite hard for us, I think that people come and they’re like, “What should we do? Should we do an LLC or an S Corp? Or a C Corp? What should we do?” In part, it’s up to them. They have to decide what they think is the most important. We can only sort of just lay it out for them to say, “Okay, here is the pros ann the cons.” It depends roughly what you’re looking to do.
Rob: Because if you wind up selling in an assets sale versus a stock sale versus never selling and just run and pulling dividends out being profitable, each of those has its own ideal structure.
Einar: I think that’s true. At a very high level, I think it’s fair to say that if you don’t think you’re going to take a bunch of investment, if you don’t think you’re going to IPO or sell for hundreds of millions of dollars, you can imagine this business becoming something that sells for sub $20 million say, then chances are that with the tax structure and the fact that you’ll probably get more money for an asset sale versus a stock sale, you’re probably better off with an LLC, I should think. But it’s hard to know. Who knows that any given company can turn around and becoming much bigger than you thought and then you have to deal with the headaches for the choices you made earlier.
Rob: Yep. Talk to a lawyer for sure. I did when I spun Drip out. It was essentially just an asset under that umbrella corp I had. While it was painful and took a few months, I basically spun it out into its own S Corp and all that worked out well. These things are doable. It’s just how complicated, how further the line you are, if it’s a taxable event.
Einar: That’s part of the main thing. There are certain things that are easy, like you can go from one to another and might be easy but going back might be hard or might be delayed or take time or have tax implications. There’s a reason tax accountants get paid so much money.
Rob: Indeed. Hopefully we haven’t bored you to death today for those of you who are still with us.
Einar: I’m feeling kind of sleepy.
Rob: You got to go drink some coffee. If you have a question for us, not about this topic because I hope to never speak about it again, you can call our voicemail number at 888-801-9690 or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt, used under Creative Commons. Subscribe to us on iTunes by searching for ‘startups’ and visit startupsfortherestofus.com for a full transcript to each episode. Thanks for listening and we’ll see you next time.
Episode 441 | Revisiting 2019 Goals, Why Remote Companies Grow Slower, and A Couple Listener Questions
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike revisit their 2019 goals. The guys check in to see if they are on pace with their 2019 goals as well as discuss some other topics including why remote companies grow slower.
Items mentioned in this episode:
Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at building, launching, and growing software products. Whether you’ve built your first product, or you’re just thinking about it. I’m Rob.
Mike: And I’m Mike.
Rob: We’re here to share our experiences to help you avoid the same mistakes we’ve made. Where this week, sir?
Mike: I know that we’re only a couple of weeks out from MicroConf in Vegas. We are just in the process of selling MicroConf Europe tickets. That will be in the 20th to 22nd of October and it will be in Dubrovnik, Croatia again. Looking forward to that. It’ll be awesome and it’ll be back in the same location and one that has a fantastic view of the ocean.
Rob: Yup. I loved that hotel last year. I’m very much looking forward to that, October 22nd, 23rd, and 24th, is that right?
Mike: I believe so, yes. I have to look at the calendar.
Rob: Yeah.
Mike: That’s hard.
Rob: Go to Eventbrite and they’ll be on sale soon. That’s good. I’ve got to start looking for speakers for that here, soon.
One thing I wanted to throw out that I’ve been thinking about, there’s this book called Mindset. I believe it’s by Carol Dweck. Is that right? I wish there was some device that I could type a name of a book into and figure out who wrote it. But anyway, it’s about having a growth mindset versus a fixed mindset. It’s about expanding your thinking and not being caught up with the same beliefs you had your whole life, as well as just believing that you can get better, and that you can change and do more.
I loved this book when I read it. When trying to instill growth mindsets into our children so they don’t go through life thinking, “Well, this is what I have. I’m like this the whole time and I can’t learn new things. Whatever I believed when I was 10 or whatever was instilled in me can’t change.” I really think that this runs true and there’s a parallel here with successful founders. Successful founders I know have growth mindset. They’re always trying to learn, they’re always trying to get better, and they’re always questioning their beliefs.
There are certain moral beliefs implicit that you probably never shared. There are beliefs that you shouldn’t. There are these other ones like, I remember talking about Split Testing in 2008. People were telling me like, “Oh, that’s tricking people. You’re tricking people.” That’s what internet marketers do and we don’t do that in Startups.
Let’s try and talk about email marketing in 2009–2010. It’s like, “Oh, you’re a spammer.” I’m talking about SEO to market a business. It’s like, “Yeah, it’s just gaming and Google. You should just write great content and you’ll rank.” I feel like those are fixed mindsets. Things like, “Well, this is bad and what I believe is going to hold true forever.” But the folks who are able to embrace those new things, if you’re able to do it quickly, and if you’re able to implement these things and take advantage of them, these are the founders that I see succeeding.
The reason I bring this up is there’s a constant ongoing flux of new ideas coming in and trends that come in and out of the whole startup scene. Part of my talk at MicroConf was about trends that I have observed over the past 14 years of being involved in the scene. One of which, of course, is the changing nature of funding, that being bootstrapped and venture-funded used to be this binary thing and then self-funding is introduced where [00:03:33] bank. That’s a little different than being bootstrapped. There’s taking a $100,000 from friends and family. You don’t have an institutional investor. How different is that?
Then, there’s obviously TinySeed, there’s a [00:03:45], and there’s other players. Technically, yes you took a dollar, so you have now taken funding but it’s not the same as the VC funding of 10, 15, and 20 years ago. It doesn’t come with the same negative things.
Some thoughts I’ve been doing and really going back to first principles of what is bootstrapping about? Is it bootstrapping? The reason that I bootstrap—I would assume for most of us—is we want the freedom to run our own company and we want to have purpose working on something interesting. We want to have healthy relationships with our families, not get a divorce, not never be around our kids. If we could do that, whether we take a little bit of money, don’t take any money, which is totally a viable thing, or take a lot of money or whatever, I guess I’ve always had those three goals, that freedom, purpose, and relationship. I think that funding has traditionally been at odds with those—10–15 years ago it would have been—but in my head, there are more shades of gray than perhaps has been the case in the past.
Mike: Part of those things that you just talked about are the change in definitions or understanding of specific pieces. For example, bootstrapping. What does bootstrapping mean? I think that question has come up a lot more recently because of things like TinySeed and [00:04:57]. What does it mean to be a bootstrapper? If you have a very specific or fixed view of that in your head, then it’s going to impact how you view taking money for your company or somebody else taking money for their company. I don’t think that a lot of those definitions are necessarily static because bootstrapping itself is relatively new. It’s really only become a household word in our circles in the last 10 or 15 years. Our circles didn’t even really exist 10 or 15 years ago.
The landscape itself is changing and those definitions are changing at the same time. It makes it difficult to not adjust with it. You’re going to be left behind if you can’t adjust your definitions or mindset along the way.
Rob: Yeah and that’s the thing. This is something that I’ve struggled with. I’m an engineer. I wrote code for decades. I do think in very binary and I used to think in very black and white terms. I used to be more opinionated, more fixed in my thoughts. The older I get and the more experienced I get, the more I realized that that has been a detriment to me in my career and the things that held me back early on were holding on to these ideals that I truly believed and later found out were not as black and white and not as “true” as I thought they were.
Anyway, that’s it. I’ve been thinking a lot about that and how to continue. It’s all up for me to continue to grow. I ask myself the question, “What things do I believe today that I will look back on five years and think that wasn’t correct or that was holding me back then?”
On a lighter note, did you know you can get a refund for audible books that you don’t like?
Mike: I did not know that.
Rob: This is crazy. Remember how I talked about how I’ve backed 185 kickstarters? The only thing worse than Kickstarter for me is Audible. I believe—I would have to look at the library—we have close to 500 audio books.
Mike: Wow.
Rob: I’ve been a member for nine years. It’s nuts. Granted my kids listen to audio books. Sherry listens to them. We all share the same account. Hundreds and hundreds. That’s how I read. I don’t buy physical books. I really don’t buy books on Kindle. I have a lot of them. But I also will go and just try a book and if I don’t like it—I get two, three, or four chapters in—if it’s not doing for me what I thought it was doing, or if it’s too way academic, or just a crappy book, I bail on it. I’ve always, at least for the past 10 years, valued my time more than the cost of an audio book which runs around, let’s say, $10 with a membership.
I have a bunch of audio books that I haven’t listen to. If they’re good, I listen all the way through, I take notes, and I do all that stuff, but if they’re not, I bail on them. I’ve always hate that cost and I realized the other day, you can go back and just say, “Hey, I didn’t like the book.” I’m sure if you abuse this, they have some repercussions or something if you listen on every book and then return it or whatever, but it’s interesting. It’s buried to find it but I definitely went back. I looked to about a year. I went back and refund maybe seven or eight books that I only got a little bit into. I remember specifically why they were crappy. I got some extra credits and you know what I do with those credits?
Mike: You got more books?
Rob: I even [00:08:10] bought more books. Of course I did, Mike. It’s got a voice, I love the information, and learning new things. I’m listening to books everywhere, on topics anywhere from growing your business to negotiation. I have a book on Leonardo Da Vinci, one on World War II, one about dungeons and dragons, two about dungeons and dragons, I listen to Profit First based on a recommendation from Patrick Folly, and I have something about dealing with challenges mentally and blah-blah-blah. All of those won’t stand up to the scrutiny but I do like having a very plethora of books to be able to listen to based on the mood and goals I have at that time.
Mike: The only thing that shocks me about any of that is that you waited until you got the credit before going and buying more books.
Rob: No. It’s true. I didn’t actually spend all the credit.
Mike: You lied. You lied to thousands of people.
Rob: I did spend several of credits but yeah, I’m kind of backed up. I don’t have a big wish list, but I don’t tend to buy a lot of books until I’m ready. Right when I’m ready to listen to it then I’ll buy one or two more and then go into it. Right now, I’m a little overbought because of this credit glut that I experienced after the refund.
All that said, let’s talk about some 2019 goals. You and I make goals each year. I know they’re varied opinions on goals. I’ve always been a goal-driven person. I find that goals help me focus for the year. Not get shiny object syndrome, not wander off and do other crap because there are always more opportunities that are super interesting than I can ever do. The goals help keep me focused.
I sometimes do re-evaluate goals and say, “You know what? I screwed up when I made that goal in the last year. I shouldn’t do that this year. I should pivot the goal.” These are things that I spend a lot of time thinking about. I’ll try to do it on a retreat to make sure that I spend a day or two thinking about it and I really want to accomplish that in the next year. That’s a high-level thing that I then try to focus on the next 12 months.
With that said, we set some goals back in December. It is now second week of April. We kind of just passed the first quarter of our goals. You had two goals with a bunch of subpoints under that. It might be five or six. I had four goals. Why don’t you talk through your first one and let us know how you’re doing? This is either going to be the walk of shame or a celebratory episode where we can high five each other.
Mike: I think it’s going to be a walk between them because I didn’t exactly have a lot of heads-up on the particular piece of this podcast episode. I did not go back and take a look to see what exactly all these numbers looked like. I can give you a ballpark idea but probably not exact.
In terms of exercise, I know that at least halfway through the first quarter I was ahead, and then it really dropped off the end of the quarter as MicroConf got closer. I think that I’m close to what it should’ve been but I’m not absolutely sure.
Rob: You’re saying that you’re not sure if you’re on track for two times a week?
Mike: I think that it’s close. I mean they’re still a little ahead or a little behind but I’m not too far off. Twice a week would’ve been 25 times by the end of the quarter. I know that I was at least 15 or 20 at one point. There is one point where I was six or eight weeks ahead or something like that. I was doing very well but then as MicroConf got closer, I got busy and I stopped going to the gym. Now that MicroConf is over, I can start going back. I haven’t gone back and actually looked at the numbers. I think I’m on track, but I could be a little ahead or a little behind it. I’m not sure.
Rob: Yeah, give or take. You’re on track, it sounds like. I’m way behind. The winter decimated me. I’ve talked about this in the past. It started getting warm here a couple weeks ago. I actually started exercising. My first goal is three days of exercise a week. We’ve got six or seven inches of snow yesterday. It’s like halfway through April. It’s a train wreck for me so far. This is a good reminder. If I didn’t have this goal, I would just not care. I care because I have this goal. It is something that I need to change and is something that I want to be doing. I don’t enjoy exercises. It’s not something I’ve ever really want to on purpose, but they did something that I need to get motivated for. This is a friendly reminder that I’m walk of shaming with the exercise one and I need to figure out a way to do better with this.
Mike: The second one for my getting my health back on track was having a normal sleep schedule. Part of that involved using my CPAP machine at least five times a week and average usage of at least 6½ hours at night. I can say with absolute certainty that I am actually beating that if not exceeding it in a number of different ways. The app that I use for this only goes back, I think, about 30 days or so. I can get more data then, that if I needed to. But even over the last 30 days, the lowest I have on here is 5½ hours and that’s actually a lower one. Most of the rest of them are six plus. Some of them were highest. One of them on here is 9½. We got 10 hours and 40 minutes on here for one of them. I’m doing well on that one.
Rob: Very nice. My second one is about TinySeed. It’s to build it into the de facto brand when bootstrappers look for early-stage funding. The subpoint for that was first batch of founders chosen and they have a good chance of success, good progress, growth, and all that stuff. That’s by the end of the year.
Yes, I would say I’m on track for these. I think the de facto brand thing comes over time. Maybe it’s not a year but it’s kind of a long-term goal. The first batch of founders are on track. We wanted to have everybody chosen by MicroConf. We didn’t get that done but we are most of the way there. To be honest, the biggest hang up as per usual is legal rather than any actual conversations or phone calls or any of that. It’s just getting everything in, bullet points and the legal docs. I’m feeling good about this. This is my main thing that I’m working on. I would say on track for that.
Mike: My next one was to lose 15 pounds. Do we cue the audience’s laughter here now?
Rob: Not there.
Mike: No. I think after MicroConf, I actually gained eight pounds but then the day after or two days after, I was back down to a normal weight or whatever. I hadn’t really lost. I think this is all water weight. I really haven’t lost any measurable amount of weight at this point. I’ve got to work on that. I think that’ll go back to the exercise thing.
Rob: My third goal is to not panic when the stock market crashes. I don’t really think that’s happened. I mean it’s been a little up and down but there hasn’t been a crash. I don’t know yet, we’ll see. This one’s a little bit out of my hands but it’s just something nice to be in the back of my mind.
Mike: You can go out and buy a bottle of whiskey so that when it does crash then you can drink the whiskey and hopefully forget about the stock market.
Rob: Yup, indeed.
Mike: My next one was to have more regular and in-person social contact. I would say that I’m actually succeeding there. Still meeting up with a bunch of people once a week. Obviously, there is a massive injection of social contact at MicroConf, but yeah, I’m still meeting up with people. I wouldn’t say that this is in-person social contact, but I’m also meeting up with a group of people online, usually on Saturday evenings. But we’re going to take a break for a couple of weeks, then startup back again in May. It should be good.
Rob: Very nice. My fourth and final goal is to write or rewrite a book. I have not started on this nor I thought about it. It’s been because of MicroConf and TinySeed all happening here at the first of the year. I’m not on track to do this because I haven’t started it and it hasn’t been on my radar. I want to see once we get the batch chosen, we get things rolling, I want to see how my time works out and if I’m able to do this. As I said when we set this for the first time, writing another book aligns with the main thing I’m doing because writing another book about startups didn’t align with growing Drip. It didn’t align with growing HitTail but it does align with TinySeed. I have more of a reason or an excuse because I really want to do it. There’s more of an excuse to do it. I just got to figure out if I can carve out the time.
One thing that’ll hopefully help with that is, we actually just announced that we hired a program manager with TinySeed who’s going to help in the accelerator because there’s so much work to do. We hired Tracy Osborne formerly of Wedding Lovely. She’s spoke at MicroConf in 2016, did really good talk there. I’ve been a longtime fan and we’ve kept in touch. It just worked out really well for her to come and join us. She’s a developer, a designer, she’s written several books on design, and I believe in some development as well. She’s a public speaker. She’s got a lot of chops. I’m stoked to be working with her on this. That should help achieve, hopefully, a few of the goals on this list in terms of freeing up time, hopefully, for me to do something with the book as well as helping us grow TinySeed into that brand I was talking about.
Mike: Congratulations. It’ll be great to have her around.
Rob: Indeed.
Mike: My last one on here was for Bluetick. It was to establish attraction and move on to something else. The comments I had on here was that it’s fuzzy, not exactly what it should been, whether it should be revenue-target or customer-based. For this, I would say it has meandered the past couple of months. It’s probably largely for the same reasons that you have not gotten around to writing a book was because of MicroConf.
It was about a week or two before MicroConf. I was sitting down and working on stuff. I realized that basically the first three months of this year were basically taken up by MicroConf. I did very little else. It got me thinking about how much of my time is actually spent working Bluetick. My current estimate is between 30% and 40% of my time throughout the course of the year is spent working on Bluetick, whereas I previously thought it was closer to 100%. That’s totally not the case. It changes things in my mind more than anything else, but it’s just a perception or a recognition, I’ll say that I’m not really working on it full time. I’m working on it about a third of the time. That would probably explain how it meanders a little bit and how I’m not getting as much done on it sometimes than I feel like I should be.
Rob: That makes it tough. It’s hard to not have that focus. It’s almost like you’re basically working almost nights and weekends on it. You’re kind of doing it as a side project.
Mike: Yeah. That’s really what it is which in part explains why it can meander along if I’m not paying attention to it. It grows when I am. But if I’m only paying attention to it 30% of the time, it’s really not enough to offset turn out of it, to be perfectly honest. I don’t know. I have to give some more thought to that at exactly how to address that particular problem, but I’ll figure something out.
Rob: Indeed. We’ll there were a couple of other things that I want to talk about. We do have a couple of listener questions but something I thought was interesting from Patrick Campbell from ProfitWell spoke at MicroConf a few weeks ago. A couple of the things or slides that he put up that, I believe challenged people’s thinking, were from some research they have done. They have a lot recurring [00:19:44] SaaS companies using ProfitWell and he posted up two different slides. He posted several that agreed with our mindset of, like this one agrees with your internal monologue of how you believe the world to be.
But how about this one? This is from data. This is from 1800 respondents. The slide said, “Remote companies have considerably worst growth and retention than collocated companies.” The room went silent. He’s like, “I know. None of us want to hear this because we’re building remote companies. We want to build remote companies.” How does that make you feel? You instantly question the data. Whereas, seven of these different slides that had statements like this, some were totally in the MicroConf wheelhouse and totally agreed with bootstrapping and all that stuff, others were like this and they’ve challenged our thinking. This one in particular, he had 1800 respondents. The growth was between 21% and 29% slower for remote companies than it was for companies located in the same location.
The other one was companies with founders with a hobby grow slower. This is when the hobby takes 10 hours a week and the study was done four years in a row. It was 2014, 2015, 2016, and 2017. Each year, the growth was 10% or 12% slower with founders with a hobby.
It’s interesting. I want to back these around really quick. I don’t want to dispute the number because he asked these questions. They’re pretty rigorous company, I believe, in terms of data and research. What do you make of them? What are your thoughts on this?
Mike: I thought that the way he positioned these was to let people think about them and understand their default position on what their beliefs were about the data, whether it conflicted with their worldview. I found that more interesting than the actual data itself because I don’t have access to this data directly. It’s not stuff that I look at or actively thinking about. The data itself makes sense to me, but I don’t have anything to dispute it either way.
Remote companies have a worst growth of retention or founders with a hobby grow slower. That intuitively makes sense. The first one, remote companies having a worst growth rate and worst retention rate, I don’t know what he meant by collocated. Does that mean they have an office?
Rob: Just local companies having an office that are not remote.
Mike: I could see that because I think a lot of people have issues working remotely. Some people are just not wired that way. They can’t do it.
Rob: Yeah. I can see that the retention part of it makes a little bit of sense to me. When you’re working remotely, you don’t have as much of a connection to the people whereas if you cut to lunch with folks every day, there is more of that team or family depending on how you couch it. There’s that feel that really is different. I could see that one being causation because obviously, correlation is not causation. That’s where I look at. The fact that remote companies have considerably worst growth, it doesn’t mean that being remote causes worst growth.
Again, I’m not trying to challenge these numbers but I always thinking, most venture-funded companies, the VCs, do not want them to be remote. They frown on remote. I would hypothesize that most remote companies, the majority, are actually bootstrap companies—bootstrap, self-funded, whatever—not venture-backed, anything but venture-backed.
As a guess, I would also say that venture-backed companies tend to grow faster overall than bootstrap or self-funded companies. One, because that’s the mandate. For better or worse, it’s growth at all cost a lot of times. That’s the number one KPI, it’s growth, and that’s not necessarily with folks in our community. Number two, venture-funded companies tend to have just more money at their disposal. They can goose the growth almost; they can force the growth.
That was something that has gone through my head. Perhaps growth is not caused by them being remote but it’s one factor in that.
Mike: It seems to me like you’re trying to justify what those numbers are and kind of fit them into your mental model. I think that was one of the things that I took away from the talk is if there’s data, there’s two ways to approach it. One is this is factual and how do I relate to it? Or you trying to either pick it apart or trying to make sure that it doesn’t conflict with your worldview. I can see both ways on both of them. I think you can as well. But you’re trying to map these things to your mental model of why these things could be true even though you don’t necessarily want to go out and get funding, for example.
Rob: Totally. That’s the thing. Companies with founders with a hobby grow slower. Remote companies grow slower. It’s like, “So what?” When I come back to my values of freedom, purpose, and relationship, the growth is not one of those three core values. I did like having companies that grew in revenue because it led to a certain amount of success. It lends a bunch of things. I can impact more people; I can make more money. It led to more purpose and I can have more impact. There was just a bunch of stuff with it.
But frankly, if I’m going to have a hobby and I’m going to play my guitar, or I’m going to play tabletop games, or my hobby is hanging out with my kids, but I grow slower by 10%, 12%, or 15% a year, I’m actually okay with that. That’s a personal thing of mine.
While these things might say, “Oh my gosh,” it might make you rethink everything. It’s like we’re not in the venture-funded space, so, can we just have profitable businesses? Isn’t it that what Startups for The Rest Of Us and MicroConf our movement, or community, or whatever you want to call it, it’s kind of about it? Is it growth at all cost? It’s nothing we’ve ever espouse.
Frankly, just growth in general is good, it feels good, and it’s a goal. It should be a goal somewhere in your radar but it’s not the number one, end-all-be-all for me or for a lot of people, I think.
Mike: Yeah. Just growing headcount is not the major goal for most people that I know. Whereas you said, if for a VC or a funded company, it kind of is, to be honest. It would make sense that those types of companies would do that. Again, I think that even in just saying that or kind of going that part of the conversation, we’re really drawing attention to the fact that now we’re starting to try to pick apart the data and question, “Is this data accurate?” or, “How good is the data?” That’s exactly what I took away from Patrick’s talk, which was when you see data that conflicts with what you think, consider why that is.
Rob: Yeah. I don’t think it’s what we’re doing here. I wasn’t saying that data’s not correct. I was saying, let’s say this is correct. Am I okay with that? Am I okay with growing a business? Am I okay having a hobby? Yeah. That’s the beauty of being in control of my business is that I can make these decisions.
Mike: Yup. Totally.
Rob: Cool. Listener questions. Let’s dive-in. We have a voicemail from Josh Doody. It’s about metrics rules of thumb for B2C products.
Josh: Hey, Rob and Mike. It’s Josh Doody here, MicroConf attendee frequently. Also, I run my business at fearlesssalarynegotiation.com. I have a question that might be a little bit outside your wheelhouse, but I’d really love to get your perspective on some metrics and things for my business, as people who think about SaaS a lot.
I run a B2C business that has two sides. One side is coaching. That side’s great, I’ve done marketing, it works really well, that’s where I make most of my living. But then, I have a product side of my business that, again, is B2C mostly driven by organic search traffic on Google.
Really, what I’m struggling with is trying to figure out what are good metrics for my business? How do I know if I’m doing well in terms of converting email subscribers to customers, primarily, but even top-of-funnel, converting visitors to email subscribers? I use a sort of typical nurture campaign sales sequence-type funnel in my business.
I’m just curious if you could point me to some resources or other examples of folks who do B2C organic search-driven businesses online? I’m in the career space, salary negotiation, getting rated, and that sort of thing. We’re just really curious if you have any ideas from a SaaS perspective of what a good funnel from search visitors to converted customer at an info product would be? My products range from about $47 for some email templates going up to about $240 for the complete bundle, is what I call it.
Thanks so much for all you do for the Startups for the Rest of Us. Love the podcast, been listening since the beginning, and looking forward to what you guys think. Thanks for your time. Bye.
Rob: Mike, for a question like this, I’d like to take us out to our remote correspondent. He’s a growth expert. He does some B2B, but he does even more B2C. MicroConf speaker, TinySeed mentor, Taylor Hendricksen. Taylor, what are your thoughts for Josh?
Taylor: Hey, Rob and Mike. Thanks for having me on. Josh, thanks for submitting your question.
Before we jump in to the rule of the metrics on B2C products, I’d like to note that it really does differ greatly from business to business and product to product, depending on the few things. The two of the biggest ones being the purchase price, that you’re obviously selling the products for, and what kind of hunger towards the offer there is. Some things that are solved here [00:29:05] would generate much better returns in these metrics than other ones that really don’t have that.
Jumping in, there’s three of the rules of thumbs I’d like to go for in general B2C offers. For onsite opt-in rate for a website visitor using organic to an email opt-in, we like to see conversion rate of about 2%-3%. We see this as low; you could have nothing. Or as high is anywhere from 6%-7% if you have a really great offer dialed-in into that content.
After they are on your email list, a list-to-sale rate, we’ll purchase any of your products, let’s assume you have a 60-90 day sale cycle that you could go to. But a list-to-sale rate we would generally see about 1%-2% rate in there.
Lastly, the value per email subscriber. How much each email subscriber’s worth is around $3-$5 in the first 60-90 day period. That’s the one that differs the most. Depending on this, the financial niches can go up even higher and some of the more hobby niches can go lower.
A way to improve some of those metrics for your current setup, first off, for the opt-in rate, looking through some of your content, some of the content upgrades can definitely be improved, brought to attention more, maybe some more standout design around it. Specifically, it feels like the sour negotiation guide. I thought it was one of the best phrases you ranked for. It could be a tremendous opportunity to send people into that opt-in funnel. The current opt-ins you have were kind of just gray and not really that eye-catching.
How to improve the list of sale? This is something where it sounds like you already got a lot of the core pieces in place with the nurture sequence, the sales sequences, and stuff like that. I haven’t gone through your funnel yet but I’m sure those are pretty good. A way to boost that is to flash sales. It’s something I like to do and hopefully you can generate custom coupons with your setup. I’m not sure SendOwl can, which is the platform you’re using. Other platforms like Ontraport, ActiveCampaign, WooCommerce can do hacks to basically allow you to generate custom coupons for that user that expire in, let’s say, 24 hours. We like to push those. We’ve seen people have engaged maybe the business sales page, but they haven’t purchase yet. That’s one way to cheaply get them over the hump to make a purchase.
Last way to improve your value per email subscriber is after you gone to your main sales sequences, really link that out as long as you can. A good long-term content and an affiliate marketing sequence. After you pitch your products, go through all the good, relevant ones that you’d actually recommend to your audience just to increase that visitor value over time.
Another easy thing to add on that I didn’t see you have, is a push notification list. That’s a really easy thing to plug in. We’re seeing great opt-in rates that are really low friction ways to get that audience out and then you can actually set those automated campaigns to go out over time. Drip out the same content you normally would. Mix it with sales stuff.
In terms of resources to look for, these metrics as well as learning more how to improve those, the biggest one that comes to mind is just DigitalMarketer. Their Customer Value Ascension Journey is a good way to map that. Some of their tactics are a little bit more aggressive in terms of the rule of thumbs. They’ll say $1 per email subscriber per month, especially if you plan financial world, they can achieve this. They’re mailing pretty often and have very aggressive sales tactics within those emails.
I hope this was helpful. Back to you, Rob and Mike.
Rob: Thanks, Taylor, for your onsite commentary. Mike, anything to add?
Mike: No. That was fantastic. That was a great addition.
Rob: I know. This comes back to the whole thing of you and I have certain wheelhouses and experiences, but it’s so cool when we’re able to call on other people in the community.
Mike: Because this isn’t one of them.
Rob: Exactly. I would have had to go and research this. I had some B2C stuff way back in the day, but it was over a decade ago. It’s just not something that we would have. That was awesome for someone who, day-to-day, is doing a lot of B2C stuff. He also does some B2B but he’s one of the folks I know who’s really knee-deep in these stuff. Thanks for the question, Josh. I hope that was helpful. Thanks, Taylor, for chiming in on that.
Other question for the day comes to us from Justin Wolfe from positionhealth.co. He says, “Hey, guys. First off, thanks for the show. Very informative. I have a question about some case studies that we’ve produced for my company, Position Health, which provide real-time notifications whenever people enter or exit medical facilities. Right now, I’ve got a webpage where interested people can fill out a form to request to download the case study by entering their contact info. When people make this request, we sent it to them and add that person as a sales prospect.”
“My question is around indexing for the content in the case study. Right now, the case study isn’t published on our website, but it has lots of good content, and would probably help with making our website more findable in search engines. How would we go about making the case study’s content count towards our website in the SEO sense while still making it available by request only via our email opt-in? Thanks, and keep up the good work.”
What do you think, Mike?
Mike: There’s two things I can think of off the top of my head. The first one would be more related to SEO. I’ll say the second one first which is you could do paid ads for the content. That way, you’re essentially driving people to a landing page and you’re getting their email address. That’s not quite what you’re looking for. I think what you’re looking for is something along the lines of publishing some of the contents or a partial excerpt of it and then providing it as a download if you enter in your email address. Maybe give the title or maybe a brief synopsis of it, and then first couple of paragraphs of it or something like that, or maybe some images from it. They’re a little bit blurred out, so to speak. You can entice people using something like that. You can use excerpts from that content or from that case study around on your website in various places even in other content, use it as a content upgrade, and help capture email addresses using that.
Otherwise, if you are looking to expanding the amount of information that’s on your website, you could post it there as well. I get what you’re trying to do in terms of forcing people to download it. I didn’t mention it on our last podcast except where we talked specifically about case studies. But it’s possible you could get away with posting it for free and publicly to your website, and then also make it available in different places as something that people can just download. You put the content on the site and if you want the downloadable version of it you could say, “Okay, enter in your email address over here.” I don’t know. I have mixed feelings on how that’ll actually even work.
Rob: The last one that you said was the last one I was thinking about was basically if you have a blog or an article section or an essay section, then you put this in there as a text case study. When people land on that, then you say, “Hey, opt-in and get this epically formatted, amazing downloadable PDF thing of this. Plus, an audio version.” Frankly, that’s recording an audio version or something like that is super-fast and easy to do.
If you have just a landing page, whether it’s your homepage, or it’s a squeeze page, or it’s something you’re sending your ads to, and you’re saying, “Hey, I have this great case study and it has great content. Enter your email and download it here,” the odds of someone wandering over and digging through archives of your essays to find this one post that is the same content, is not that likely. That was my initial thought about it. Just offer it in two places as long as it’s not linked to from your header by the same name or linked to in your footer by the same name. It’s more of a section someone has to go to and search from. That’s what Google’s going to want to crawl. If you have these collections of things, then you have this group of content.
If your website is literally a homepage with an opt-in to get the case study, then just this one article off of it, that’s a little weird then. I don’t really know an easy way around that. Frankly, two pages is a thin side anyway. Google is probably not going to rank you for anything. You have to have more built out of that.
Once you get more built out, when you’re at 20, 30, 40 different pages on the site, that becomes easier to put it in the section, then Google index it—assuming they’re indexing your site—and then you rank accordingly.
I wouldn’t be too hung-up since it’s behind an email gate through this route that I can never publish it on my site to this other route because people will find it and then they won’t opt-in their email. It’s such a 5% use case that it wouldn’t be something I’d be particularly concerned about.
Mike: Well, Rob. I think that about wraps this up for today. If you have a question for us, you can call into our voicemail number at 888-801-9690. Or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt, used under Creative Commons. Subscribe to us in iTunes by searching for ‘startups’ and visit startupsfortherestofus.com for full transcript to each episode. Thanks for listening and we’ll see you next time.
Episode 440 | How to Build Case Studies That Don’t Suck
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about the process of putting together a case study and reasons why you would do it. They also share some additional thoughts on this years MicroConf and its future.
Items mentioned in this episode:
Episode Sources
Welcome to Startups for the Rest of Us, the podcast helps developers, designers and entrepreneurs be awesome at building, launching, and growing software products whether you’re built your first products or you’re just thinking about it. I’m Mike.
Rob: And I’m Rob.
Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on this week, Rob?
Rob: I’m back from London, sir. MicroConf for a week and then I flew home and the next day flew out to London with my wife and the kids for 9 days, 10 days–it was a long time. It was a long time to be away from home. As much as I’d like being in new places, I find that I’m more productive at home and just being gone for that long with the kids and just being gone for basically two-and-a-half weeks including MicroConf was stressful. It kind of takes the toll on you plus the time change, plus all the stuff.
London was fun. Sheri and I had been there before. The kids have not so we took them around all the fun sites. We watched five-hour play called Harry Potter and the Cursed Child. It had a two-and-a-half-hour intermission, so you get dinner in between the two parts. That was really good though, very well done.
Mike: Wait, was the two-and-a-half-hours inclusive of the play itself?
Rob: No.
Mike: Okay. It was two-and-a-half-hours of play, a two-and-a-half-hour dinner, and then two-and-a-half-hours of play?
Rob: Yep.
Mike: Wow.
Rob: It started at 1:00 in the afternoon and ended at 9:00 PM.
Mike: Wow.
Rob: With a two-and-a-half, three-hour gap in the middle so we went out to dinner. It was quite expensive as well. It was a big expense being there. She’s like, “Do we want to do this?” This is one of those things, it’s getting rave reviews and it’s got Broadway quality play. It’s really pretty cool. J.K Rowling was heavily involved in this. She’s not writing books anymore but she’s now doing movies and this play.
I know when it started that it came out as a book format or in book format—I didn’t read it—but it was basically a play in book format. There was no description, it was all just dialogue, and people didn’t really like it but play itself got rave reviews. My kids loved it. I enjoyed it as well. I was surprised that we all made it through because it’s like 5 ½ hours-ish of sitting in a play is a long time, but I think it’s kind of one of those lifelong experiences of crazy thing to say, “Yeah, we saw it in the first year or two and it was good.” I imagine they’ll make it into a movie at some point and we’ll say, “We like the play better,” because isn’t that what you do? You always like the book or the play better, the pretentiousness of, “I saw it first, […].
Mike: I know. I think that that’s always whichever one you saw first; it happens to be the one that you like.
Rob: Totally.
Mike: It’s nothing else. I saw you were going to London. I was like, “Oh, god.” Because I got back and then I saw some things on Facebook I think, it was like, “Oh, yeah. We’re headed to London,” or something about the play. I’m just like, I cannot imagine getting on the plane after having gone to MicroConf for a full week and then taking the eight-hour flight back and then have to get on another plane.
Rob: It was exhausting. I don’t travel well as it is. I’d tire a lot. Sheri travels really well, I don’t, so it took a toll on me but all in all, I had a good time. It’s good to be back.
In addition, Sheri and I hosted a founder meetup. I had mentioned that on the podcast here and then tweeted it. We got about 30 people who showed up. I had to rent a space. This was kind of a misstep. I was imagining like, “Yeah, we’re getting 10 or 15 people together and we’ll just show-up at a restaurant or I’ll call them in advance and get a back room.” When we did that, I got 57 people who entered their email and contact information. I was like, “This is like an event now. I can’t just show up somewhere.”
It was a mistake because I didn’t want to plan anything. You know what I mean? I then had to get in touch with venues and do all this stuff. Actually, thanks to Stephanie who works for FE International. She actually stepped in. I was talking to Thomas at MicroConf and he recommended connecting me with someone there and she ended up researching venues and handling a lot of that for me but still with a lot of back and forth. Even just trying to get the venue paid, I’m in London and I’m trying to wire them money and bank transfer and of course, it has to text me in order to add a recipient and I don’t have my sim card because I’m in a London sim card. It’s just all that friction and you don’t want to be doing that when you’re sitting there on a bus going to Stonehenge.
Mike: Really? You don’t?
Rob: You don’t. But overall, it was a super good experience. The cool part is when we do that, there’s so many folks who listen to the podcast, or read your book, or follow us on Twitter or whatever, but then they don’t come to MicroConf so you’ve never met them in person. The original goal obviously with MicroConf, as we said, was to get everybody together back in 2011. Just people we knew that we felt like should be talking to one another. But there’s 10, 20, 30x that many people that are out there that have never been to a MicroConf but still are bootstrappers. They still are a part of this community. They still follow the movement and all of that stuff.
That’s where this meetup was cool was that being able to show up. If I’d planned it better, easily today, if I’ve actually emailed the list and promoted it and figured out the dates in advance, I could’ve had 50-75 people there. I have no doubt about it. I think that’s something that could be an interesting thing moving forward although it takes time and effort and such to do, I did enjoy meeting folks that normally we wouldn’t get to meet in the course of the year.
Mike: That’s always cool, to just drop into some place. I mean, I certainly am not the one who don’t want to go around and call the venues and stuff like that because that’s a total pain in the neck. But you’re right, there’s people all over the place that you know through various social media outlets, or through email list, or they bought your book as you said, and you know of them or they know of you. It’d be nice to get together but not everybody has got the flexibility to be able to do that. When you do travel, it’s nice to be able to just get together with people.
Rob: I agree. How about you? What’s been going on in the past week or two?
Mike: Well, I’ve been cleaning up after MicroConf. I’ve also been looking at 4K monitors. Bringing my computer into the 21st century I guess because my monitor is, I think it’s like eight years old at this point. But I’ve got a 30-inch monitor, so I haven’t needed to upgrade it because it’s been fine, but I’ve also got a pair of 20-inch monitors on the side. I’ve kind of been eyeing 4K monitors for a while now.
I was talking to Andrew Culver, who apparently—if people are not familiar or follow him on Twitter—he runs Bullet Train and he’s got a pair of 55-inch LED TVs that he uses. They’re both 4K. He’s got one in front of him and one he uses actually as the top of his desk and he just sits there and works between the two of them which is crazy, like that’s massive amounts of screen real estate but it works for him. I’ve seen pictures of it but I don’t think I would want to go to that level.
Rob: Oh, yeah. That sounds crazy. I’m still using, what do I have, two 24-inch Dell IPS and stuff. It’s probably time for me to revisit that because it definitely has been, I’m thinking it’s probably been about four years, I think since I upgraded my monitors. I actually have a ton of desk space here and so; I don’t know that I could do something that’s that large or that it would benefit me. It’s nice to rethink that every once in a while.
Mike: Most of the ones that I’ve been looking at, they tend to be 27-inch monitors that are 4K. The one I have right now is the 30-inch monitor and it’s 2560×1600 screen resolution. I basically get 50% more screen real estate by going to a 4K and it would be in a smaller area. I just question whether my eyes are good enough to keep on it.
Rob: Yeah, that makes sense. I’ve had some time to reflect on MicroConf this year. We recorded our recap episode when we were there still and you’re in the midst of it and everything. But after talking to more folks and reading their feedback and even just thinking about it over the past week, I realized that this was a less tactical MicroConf than in previous years. I guess I’m speaking specifically about Growth. I think Starter we’re still quite tactical.
It definitely gets hard to find qualified speakers who can speak at the level of Growth who everyone hasn’t heard from a dozen times. It included a diverse line-up of speakers and it’s about tactical things. That’s the challenge and it’s a needle we try thread every year. But yeah, I looked through the list and we had five of the nine Growth talks that should have been fairly tactical. Hanne from Thrive Themes talking about how to handle feature requests. It was Maron talking about hiring, and the Joanna Wiebe talking about copywriting. Taylor Hendricksen talking about SEO and Alli Blum talking about reducing churn through customer feedback.
Typically, I have more marketing talks. I think this year, I struggled. I asked a few other people who would’ve done talks more in line with prior years, but they weren’t available. Unfortunately, Marron had to cancel last minute due to a personal thing that came up. Really, we only had four of our nine talks were tactical and that doesn’t line up with prior years. We’ve tended to do 70%-80% tactical which is the couple of inspirational.
What’s interesting is that we’ve done 18 of these now. Some years, that’s just what happens. It happens because there’d be last minute pivots in a talk or the speaker’s like, “Hey, I just decided to do this other thing.” It’s like, “Cool, let’s do that.” And it changes the line-up. Or one year, we can’t get a bunch of people. Or one year, we’ll get good speakers who have delivered great talks in the past and they just have a bad year; they have a bad talk that doesn’t come across.
What I’ve learned, I think I’ve learned with the first three, four, five MicroConfs we did, I was always ranking them in my head. “Oh, this next one has to be the best one ever.” At certain point, you just can’t all be doing the best one ever. You just have to do the best that you can and hope it turns up. But there’s a bunch of stuff that’s not within our control, frankly. Whether it’s the speaker canceling or just someone showing up and not doing the best talk they’ve ever done, whether it’s someone who you’ve vetted, and they pivot the talk at the last minute.
I think that in my head, I’m pretty careful not to draw trendlines based on one event and say, “Alright, that’s it. Now, MicroConf is different than it always has been. It’s not tactical anymore.” And it’s like, “No, that’s not actually true because the next time, we’re going to double down on the same vision.” We’ve had pretty good consistency through the 18 events but it’s just an observation I made. Again, I heard a couple of people mention it to me and I was kind of like, “Yeah, that’s a good point.” I think that it’ll be different next time. No two MicroConfs are the same.”
Mike: Yeah. You and I have had this conversation before. I think that we had the conversation especially early on after the first two to three years where things were getting progressively better, we’re like, “Okay. How do we top the previous year? How do we make it better? How do we improve?” At a certain point, I think that’s actually detrimental especially when it comes to a conference where there’s so many things that are outside of your control.
What you really need to do is be concentrating on how can I maintain a consistently high-level of quality doing the same thing? Because you’re never going to consistently beat what you did before. You’re not always going to grow your numbers. You’re not always going to have better and better speakers. As you said, some people are going to have an off year here or there or a talk you think is going to go over well just falls flat or something like that. Those things happen and just aiming for consistently high quality I think is the better way to approach it because you’ll maintain your sanity a lot better as well.
Rob: Totally. I mean other examples I realized, again, I was reflecting. I was going through all the talks and thinking, “How are they different than I thought they would be? How is this MicroConf different?” There were more talks that had perhaps a hint of negativity in them. It wasn’t that the whole talk was negativity but during my talk I said, “Look, bootstrapping is getting harder. There’s more money coming into SaaS. It is harder.” Some people are like, “Oh my gosh, it’s just doom and gloom everywhere.” It’s like, “No, it’s not. It’s just a trend that I’m seeing.”
Patrick Campbell mentioned something that were part of his talk was, remote companies don’t grow as fast and have higher churn than co-located companies. We can talk about that probably in a future episode but there were just little tangents of it. Even Gumroad, Sahil’s talk, I’ve never met him, but his talk was more of a downer than I thought it would be and you just don’t know that going in. His story of starting Gumroad and raising the money and failing to become a billion-dollar company, it can come off inspirational, there could be tactics, or it can have undertones of thoughtful introspection.
Or even talking about bootstrapping versus not. This happened to be a year where there were with Chris Savage and Sahil talking about that weren’t necessarily super related to or in the wheelhouse of bootstrapping. Even patio11 having to step in. Maron wasn’t able to do it, patio11 stepped in and talked about what Silicon Valley does and this and that.
Again, one could paint it with a brush and look at it and be like, “Oh well, MicroConf now is about depressing talks that are less tactical and not focused on bootstrapping.” You could say that and it’s not true. No one is saying that, I am definitely just reflecting on this and looking at it, painting it in my head, but I think it’s one experience, one year, does not make a trend. It’s just the way things kind of fall in a given year. Again, it’s because a lot of the things that can be outside of your control that have changed last minute or just the way things fall certain years.
Mike: Your comment about Patrick Campbell’s data points about the companies that are remote growing slower than ones that aren’t, that maybe a general trend or a general conclusion that you could draw but it doesn’t mean that that happens every single time. Because there’s obviously individual situations that fall on one side or the other. Some of them are going to skew the data and some of them are going to stick pretty close to it. It’s more about what your path is as opposed to, “Oh, this trend line over here says this,” or, “This data point I have says X.” Well, a data point in and of itself doesn’t mean a whole lot. There’s a bigger picture that you’re not always looking at.
Rob: Totally. It’s been good. I think when you’re building anything—you’re building software, you’re building a personal brand, or you’re building a conference—you should reflect on it, figure out what went well, what went not so well, and figure out how to build an event or a thing that you’re proud and that brings value to people. That’s how we’ve done that. We’ve done that over and over for the past 18 conferences, so I think it was a good exercise. It was like a mini retreat. I had a lot of time on airplanes over the past two weeks, so I was able to think about this kind of stuff.
With that, what are we talking about today?
Mike: Well, today we’re going to be talking about case studies that don’t suck. I have a bunch of sources that I’ve drawn from and will put those into the show notes. But I want to talk about the process of putting together a case study and why would we even do it.
To start out, what’s the purpose of a case study? You can use case studies in a lot of different ways. But you can use them to drive traffic to your website, you can use them help convert leads, increase sales and the biggest thing that I’ve looked at for case studies is that when you have case study that is fully written out, it’s treated by people as different than if you have a conversation with them and you start relaying facts to them. Because there’s this, I don’t want to say a wall of, “I don’t believe you,” in front of them. But if you have something in a case study and it’s spelled out in black and white, they could look at it, and they can download it and see the data and pick it apart in their head. As opposed to trying to process it on the fly when you’re having the conversations. It feels a little bit more tangible to them.
You can use it as a reference point not just to hand to them but also you can relate back to those data points in conversations that you have during sales calls or demos or just everyday conversation where you point back to it and then say, “Oh well, we have a case study on exactly this. I will send it to you.”
Rob: Yeah. The cool part about case studies is they can function at the top of the funnel like you said to drive traffic, they can function in the middle of the funnel to convert leads, and they can function more towards the bottom of the funnel to convert leads and increase sales. They are very versatile piece of content depending on how they’re written. You can even do different variations of the exact same case study to make it more general and have a broader headline that could go towards top of the funnel or be super specific and just use the same content and tweak it to make it applicable to someone who’s deep in your sales funnel.
I’ve always liked them because they make your customer the hero which, in essence, tries to make your prospect the hero of the story. The prospect is thinking about it can look at it and say, “Well, I want that to be me.” In addition, the versatility to be able to be at all stages of the funnel is a unique aspect of case studies.
Mike: I think that one of the things you just mentioned is you’re positioning those prospects as the hero and that’s one of the reasons why this thing is so effective. It allows you to directly position your product as the best solution for that particular case study and you’ve got claims that are backed by results because you’re documenting them as part of the case study.
All these things combined make it helpful to have those because you can put them in front of somebody and it’s not something that everybody else has. Not every company puts together case studies that they can hand out to their prospects or their soon-to-be customers. And that makes them extremely effective in helping to convert those people into paying customers.
Rob: I think one of the critical things to think about when you’re building a case study is to identify who its targeting, or to be very specific. Oftentimes you’ll see a case study done for each of several market verticals. If your app serves other SaaS apps and WordPress plugins and info marketers, then you could do one case study for each of those three verticals. That could be a start.
If you serve different company sizes, whether they’re horizontal over the verticals, you can do Fortune 500 case study, and then a solopreneur case study, and then an SMB case study. Job titles, job responsibilities, is another one that you can look at. They have to go a bunch of course from the CEO of a small company or the CFO or even the marketing director or whatever. I think that doubling down, figuring out the 80/20 of this, and starting with kind of the one and focusing it on the place you have the most traction with. Like, what’s the job title or responsibility, is it founder, is it CEO, is it CFO, whatever; the company size whether SMB enterprise etc., and the market vertical, and then doing your first one based on that and seeing how it goes I think is how I would start.
Mike: I think the other thing that you mentioned earlier which was the fact that a case study can apply at the top, middle, or the bottom of the funnel, that’s another important thing to keep in mind when you are trying to identify who it is that you’re targeting because you want to know which of those types of people that you are targeting in your sales funnel. Is it somebody who you want to be able to run Facebook ads and promote this case study to? Or is it somebody who’s much closer to being a paying customer and they just need that last little bit of a push, and you can hand them a case study that maps them into the shoes of a current customer that you have who’s being successful with your product.
Once you have that information, you have to find customers who fit that profile and interview them. The very first thing you’re going to want to do is get their permission to use their name, photo, company, logo, things like that as part of a case study. Obviously, they’re going to want to be interested in being the subject of that case study. You want to look specifically who are being successful with your products. You don’t necessarily have to have had them for a long time, but they have to be excited about your product and using it a lot.
A lot of times this can happen when they just signed-on, if you’ve had a sales conversation and you maybe manually onboarded them because it was complicated. They were moving from another product to yours, and you had to do some upgraded or new feature improvements, or something like that, in order to get them over on to using your product. Those people are typically good candidates because they were experiencing pain enough from an existing solution that they were using. It also allows you to position your product against that other product as saying, “Hey, this was a better fit for this type of person and here are the reasons why.”
Rob: From there, you can use an introductory questionnaire in essence whether it’s a Google form or whether it’s just an email with four, five bullets on it. Get someone to give you their initial thoughts, initial feedback and you use that to then construct a deeper set of questions that you would typically ask during a phone interview that you then record. You can either then listen back, turn it out into the case study or you can transcribe it and try to manipulate that. But basically, what we’re talking about here is a do level of interviews. This first one is this short introductory questionnaire that’s typically done via email. What that allows you to do is to make the best use of this person’s time when you jump on the phone and interview for 30-45 minutes.
Mike: And that introductory questionnaire is something that you can inject as part of your marketing automation. When they have paid for the third or fourth time, they made three credit card payments, you can then send them a question that says, “Hey, would you be interested in doing a case study?” And then maybe highlight some of the other ones that you’ve done or if you’re early on, you don’t have a pool of case studies that you’ve done, what you could send them over is an individual email.
Rob: What you’re trying to dig into with all of this is you’re trying to find the through line for their story and then tell that story from start to finish. To be honest, I would look at The Hero’s Journey by Joseph Campbell, and you can just read a summary of that, you don’t have to read the whole book but just figure out what that is. You’ll see a lot of interviews. I actually base a lot of my talk outlines on The Hero’s Journey as much as I can. But it’s basically showing this person where they ended up and then tracing back and walking through the steps that they got to get there.
You want to identify who they are, what they do, what their goals were, what their needs were, what challenges they ran into along the way, how did your product meet these goals and help them get to that next level, helped them go from Mario to Super Mario, in essence, and what were the benefits that they received from your team or from your product or whatever to be able to level-up.
Mike: The most important thing that you want to keep in mind when you’re going through that story and identifying what that through line is to folks almost exclusively on the story. Because it has to resonate with whoever your target prospect is. The brand recognition for the hero of the story matters a lot less than the story itself. If you have a person or a company that you’re highlighting and nobody knows who they are, it doesn’t matter. But what really matters is making sure that the story is going to be relatable to the person who’s reading it because if it isn’t, then case study itself is not going to be nearly as powerful or as effective.
I’ve seen case studies where they’re written for a completely different type of company like an enterprise company. I read the case study and it means absolutely mean nothing to me because my problems are wildly different than that of an enterprise company. But if you have a different case study that is targeted at one or two-person companies then that’s something that resonates a lot better with me. It doesn’t matter to me if I know who the subject of that particular case study is or not.
Rob: Yeah. Story, story, story—those are the first three rules of anything, right? First three rules of starting a podcast, of writing a book—even if it’s a non-fiction book about marketing—having a story in there will […], writing a talk, there’s so many things, a blog post, that story can do and case studies are no different.
Something to think about once you’ve nailed this down, thinking about your formats. There’s a lot of formats you can put a case study into. You could obviously do a video, one. I hesitate when I say that because a, it’s expensive to do high-quality. I think fewer people watch videos than they listen to audio or read written version but if you can do a high-end one—if you could pay a videographer to actually put it together, if you can afford that—they can be pretty cool and they can have a lot of […]. There’s video, there’s PDF, there’s audio, there’s infographics.
The idea is if you can provide it in multiple formats, it’s kind of cool, because you can then take that same content and the content often takes the bulk of the time to produce but then you can rework it and reposition it and send it out in these many ways so that it feels like you have a bunch of case studies but it’s actually just one thing reworked into multiple formats.
Mike: Part of the reason you’d want to do that is just because people like to consume content in different ways. Some people like videos, some people like audios, some people like to read a PDF, other people will glance at an infographic and they’ll sign-up for a mailing list in order to find out more information. But all those things can be used in different capacities and in different channel. You want to make the most use of that content that you generated as you possibly can. The way to do it is using multiple formats.
One thing that we kind of skipped though or we didn’t talk about earlier was the fact that when you’re writing these case stories, try and drill in to find real numbers that you can reference. If you say, “Grew by 100% or 200%,” that’s a lot less meaningful than saying, “Grew by 97%.” That’s kind of a classic marketing technique but the fact is that having real numbers that prospects can reference and can relate to is a huge difference.
If somebody’s getting, let’s say, 10,000 visitors a month to their website and you have a case study where somebody is talking about growing from 9,000 to 17,000 visitors a month, that’s going to be powerful to them. Whereas if that same person reads a case study and it references 180,000 visitors going to 360,000, it’s not as meaningful to them because they can’t relate to it; it doesn’t mean as much. That’s why having those numbers in there helps you to position your case study directly towards the type of person you’re targeting.
And then the last thing is to make sure that you have a place where people can go to get these case studies. It’s not enough to just promote them through various channels or to send them into people when they’re asking for them or to put them into your marketing automation. What you really want to do is make sure that these case studies are available so that if somebody is just browsing through your website and they want to see some of the different case studies, they’re right there. That serves a lot of different purposes, but the bottom line is you want people to be able to see these out if they’re interested in them and then download them whenever they feel like it.
Rob: Of course, the thing that most people forget about and that is should probably be at least half of the work is the promotion. Maybe it should be 80/20 but it’s promotion. You’re going to build this thing; it’s not going to promote itself.
Mike: It’s not?
Rob: It’s not going to promote… Mike, if you have learned nothing in 440 episodes of this, “Build it and they will come,” is not going to work. This is where you have to inject this case study into your sales or your marketing funnel. It can be published on the website at a place where it gets a lot of traffic. You can put it in email welcome sequence. You can put it in an email marketing sequence. But just some way to get this in front of people’s eyeballs. Promote it on social media periodically, if it holds up, if it’s evergreen. If it’s a one-time thing obviously, promote it on social media for a week or two and then let it go.
Getting it out to folks via email really is probably the best way. We know that email engagement is so much higher than other things, but the idea here is to get out in front of people. I’ve heard folks doing the case study running ads to get people to go download or read the case study, is certainly a viable option. That’s a marketing tactic that you’re going to have to spend quite a bit of time honing the funnel and all that stuff but there are lots of ways to get people in front of it. If the case study is well-written, it impacts people, it can lead to people converting. It can have that positive ROI pretty quickly.
Mike: You could even go so far as to put these as a content upgrade on your website in various places throughout your content marketing. If there’s an article that you have about some particular topic and you have a case study that is discussing that topic or challenge that people were having and explicitly walks through how one of your customers was able to overcome it with your product, then that’s a fantastic content upgrade that you can promote inside of that particular blog post.
Rob: We have four sourced articles that you compiled this outline from as well as some of your own magic. We will include those links in our show notes, startupsfortherestofus.com, look for episode 440 if you want to learn more about this topic. With that, we’re wrapped up for the day.
If you have a question for us, call our voicemail number at 888-801-9690 or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt, used under Creative Commons. Subscribe to us in iTunes, Stitcher, Overcast, Downcast, Spotify or wherever podcasts are sold, just search for Startups For The Rest Of Us. If you want a full transcript of each episode, you can hit our website startupsfortherestofus.com. thanks for listening, we’ll see you next time.
Episode 439 | 9 Key Takeaways from MicroConf 2019
Show Note
In this episode of Startups For The Rest Of Us, Rob and Mike talk about their 9 key takeaways from MicroConf 2019. They give a brief synopsis of some of the talks from both starter and growth edition.
Items mentioned in this episode:
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers and entrepreneurs be awesome at building, launching, and growing software products. Whether you’ve built your first product, or you’re just thinking about it. I’m Rob.
Mike: And I’m Mike.
Rob: We’re going to share our experiences to help you avoid the same mistakes we’ve made. We’re in this week, man? You sound a little tired.
Mike: It’s mostly the voice, it’s just a little scratchy. I am a little tired, but it could be worse. I mean after seven days in Vegas, that will do it to you.
Rob: That’s the thing, right? Normally, we record this MicroConf recap episode the week after or at least a day or two after MicroConf and this year due to my travel schedule, I’m heading to London in a couple of days. We basically have been in Vegas for six and seven days respectively, and voices are shut, and all the things. Hopefully, it will go well. Aren’t we also both drinking rye whiskey right now?
Mike: Yes, it’s a WhistlePig rye, it’s called WhistlePig, but it’s a rye whiskey. It’s quite nice. They make it up in Vermont.
Rob: It’s very nice. This will be a fun episode. We have some takeaways that I pulled away from Starter and Growth, let’s see how many we can get through. What’s new with you in terms of the past week hanging out here at MicroConf?
Mike: One thing I noticed that was sort of a recurring theme was I saw people increasing their prices all over the place which was kind of interesting there. I was sitting outside while Starter edition was happening, and there’s some group of people around the table and one of them had been convinced to double his prices on the spot. They basically made him open up his laptop, change the pricing on his website, and then shut down his laptop. It was pretty cool.
Rob: There was someone else that did that. Someone 12xd their pricing. They were obviously priced quite a bit too low and they said that sales continued to come in after doing that. I heard a rumor, you may confirm or deny, that Bluetick’s pricing might be rising soon.
Mike: Yes, it will be going up in the very near future. Actually, probably by the time this podcast goes live, prices will be tripling.
Rob: That’s the way to do it.
Mike: We’ll see what happens. It’s an experiment like anything else, but that’s what you want to know is that price too high or is it not.
Rob: For me, obviously, I had a great week here. It’s super inspiring to see up and coming entrepreneurs, successful entrepreneurs, and have my laptop charger fail in the middle of the conference. Luis run the conference off our laptops and in this case, we did not, but it was a trip. I have a new MacBook and so I needed the USBC charger and not many people have one. The brick died, the cables all worked. I was like begging, stealing, and borrowing […] at the conference to keep my laptop charged.
Mike: I thought that was funny that of all the things that you had more than one of, the one thing you didn’t was the actual brick itself.
Rob: That’s the thing. I literally have extra this cable, extra that cable. I have two things of ChapStick, I have two or three phone, and iPad chargers. I carry multiples of everything, but I don’t bring an extra brick because it’s the heaviest piece, and I’ve never had one go out on me before just at the time when I needed it, it was kind of funny.
Mike: Actually, I love this, I just saw on Twitter that there is a photo proof of you sitting down on the job while I do all the work.
Rob: That’s fast. I’ll go look for that. You have this whole list of things to do at the end of the conference and I didn’t really know. They’re normally passing back and forth and I just kind of hang out. It was like Tom Sawyer in full effect. MicroConf is a conference you and I started in 2011. It’s for self-funded founders and now, even some not so self-funded founders with the kind of rise of folks like CartHook and LeadFuze who take small rounds of funding, but it’s bootstrappers at heart.
We split the conference three years ago. This week, we ran back-to-back conferences. Monday-Tuesday is MicroConf Growth. We had around, I believe 265 on total attendees including speaker sponsors attendees. At Starter which was the three days following Wednesday, Thursday, 180 people, […] at least this year and last year at the Tropicana in Las Vegas. I think a goal that we made while we were here is to do it somewhere other than Las Vegas next year.
Mike: That would be quite nice, I think.
Rob: We have tried to do that many times and every time, it winds up being so expensive to move out of here. That’s kind of the trap of Vegas, is it’s relatively easy to get to, and the hotel, and that the venue, and the rooms, like just everything is not that expensive, and it’s like less than a 10-minute drive from the airport, it’s all these things that make it, I don’t know, it’s seductive. Because if you look at San Diego, for example, it’s more expensive and it’s a 45-minute drive from the airport to a hotel. I think I’m at the point where I’m just kind of ready to pony up and realize it’s not going have all the pros at Vegas, but we will give up the con, which is it in Las Vegas.
Mike: It’s in Vegas, yes.
Rob: It’s like dry here. I don’t know how you feel. You can tell by our voices, they’re not usual perky Startups For The Rest Of Us, Rob and Mike today.
Mike: Yup.
Rob: We have nine takeaways, give or take. We might want to put eight or ten, but takeaways from MicroConf, we’re going to look at both. Growth and Starter, we obviously don’t have time to go through every talk. I believe we had 19 sessions, 19 speakers, our Q&A folks, not including the 12 attendee talks, so 31 talks. Of course, we couldn’t possibly cover those in a podcast episode. If you’re interested in seeing an awesome recap in writing, written by Christian Genco, it’s microconfrecap.com. You can go there and see his notes of all the sessions.
For now, let’s dive into our first talk of the entire conference. It was Chris Savage, co-founder of Wistia. The takeaway I took away from Chris was, know what you’re getting into when raising funding. It’s interesting because you could have watched his talk and thought about funding is bad, but I don’t think that’s the message. It was that they didn’t think it through when they raised their funding. The talk title was, How an Offer to Sell Inspired Us to Take On $17 Million In Debt. Wistia, they blogged about it as well, is that they raise funding because it just seemed like the right thing to do. They followed the typical venture path, they actually had pretty high expenses because they are video hosting, obviously, and they weren’t really aware bootstrapping what I understand, so they raise multiple rounds.
At certain point, they got an offer to sell Wistia, but they really thought it over, and agonized, and said, “If we sold it, we would probably start another Wistia. This is really the space we want to be in. We don’t necessarily want to exit this.” But once they realized that, they realized they had a responsibility to their investors of, “Look, if we never sell, how do they get a return?” Now, one thing he never thought about pulling dividends out, but I think they’re probably a C-Corp, and frankly, their investors probably didn’t want that. I guess that’s been a thing lately with alternative funding, the Indie.vc and TinySeed is that from the start or set up that if you wanted to just do dividends, and run it, and not sell it, works; if you decide to sell it works. That’s the optionality I don’t feel like Wistia had.
Mike: Yeah, I think you’re take on this is a little different than mine, where you had said that, you know what you’re getting into, when raising funding. I took it more as a revelation on their part that they realized after a while, after they take in the funding, and obviously, well after that because—I think they funded it in 2008 or 2009, well after that, things changed, and they decided that they wanted something different.
Because of that change, because of the way that they view things was different, the original path no longer suited them. They had to look for ways to change that. That’s how I interpreted it, but I can definitely see how there’s probably three or four different ways that his talk could be interpreted. I don’t think any of them are bad, it’s just that whatever lessons you take away from it, I think you’re going to be great. It was a fantastic talk, it was well put together. I do think that the story of what they went through and how they got there is just interesting in and of itself.
Rob: I would agree. I mean, to be honest Chris Savage was kind of a long time aspiration of mine to get to MicroConf, so it was super cool to have him here this year. Our second session, was, it wasn’t a talk, it was Q&A with Jason Fried. I felt like the takeaway from there was know what you’re good at and make sure to double down on that. What’s interesting is already, we have some ratings and reviews and such coming in because we sent a survey out at the end of the conference. Typically, Q&A sessions are ranked in the middle, they’re not at the top, they’re at the bottom, sometimes they’re at the bottom depending, but Jason Fried is probably the highest rated Q&A session we’ve ever had.
I think that his authenticity, and kind of just his honesty really came out. He answered some pretty fascinating questions about Basecamp, about what it was like to get started about why he grew so fast. I mean at one point, I asked him why did it grow so fast and he said, “We don’t know.” That’s awesome, like, “Thank you for saying that, and not acting like it was that you were super smart, and that you knew what you were doing.” He’s just like, “Yeah.” At a certain point, he said, “We got a little lucky, we had some good timing, and we did some things right as well.” I was like, “That is fantastic assessment.”
Mike: I think that’s the position of a lot of successful people are in. One thing that had come up during the Q&A was that the fact that Basecamp, originally it was 37signals and then they launched Basecamp, and Highrise, and Ta-Da List and several other products, they looked at trying to sell Highrise, which was making obviously millions of dollars at the time. They could not find the buyer because of the fact that they didn’t want to let the team that was working on it and go with it. They just wanted to sell the code base, and the revenue stream, and customers, and all that other stuff to somebody else, and nobody was willing to pay for it. I made sure that I had him kind of clarify this like, “This code base was worth nothing without the team behind it.” He was like, “Yeah, it was.”
Rob: Code base plus revenue stream.
Mike: We get a lot of questions to the podcast about, “How much effort should I put in to protecting my code and making sure that people aren’t stealing it? If I hire a contractor, what do I do?” To have Jason Fried come out and say that the code and the revenue stream behind it were worthless without the team behind it. That’s just a big answer, I think to that question, that continues to come up.
Rob: I wouldn’t say it was worthless. He said they got offers, they were just super low without the team. He said, “We didn’t want to give it away.” If you end up doing $1 million a year and if you bought the team with it, you can get $5 million, and if you didn’t bring the team, you can get $1 million. I get the feeling it was that kind of situation where it’s not that it’s worthless, but it’s worth a lot, lot less.
Mike: He did turn down my offer.
Rob: You offered to buy it from the money in your pocket?
Mike: Yes, I did. I had like $100, maybe $200. I don’t know.
Rob: He graciously declined. That was cool.
Mike: Yes.
Rob: Later in MicroConf, we had a speaker who had to cancel last minute. He actually made it to Las Vegas and then had a personal issue come up and had to leave. Big thanks to Patrick McKenzie, also known as Patio11 on the internet, for filling in and talking about things that Silicon Valley Companies do well. He basically wrote a talk in 24 hours. He said, “We can throw stones at Silicon Valley; yes, it does a lot of things wrong, there’s no doubt but there are certain things that they’re pretty good at.
We won’t dig into all the points of his talk. I think the biggest thing that I took away or the one that impacted the most when he was talking was something that a boss said to him at some point at Stripe. The question was, “After a 45-year career, what do you want to be true?” I would rephrase that almost like, “What do you want to feel or have accomplished looking back on your entire working career?” I think this is a great question to think about, is legacy. This is something I have thought about, not in depth, and extensively.
When I think about legacy—it’s interesting—I think much more about this podcast, and MicroConf, and blogs, and books than I do about the actual companies I’ve started. I bet Jason Fried thinks about his legacy is probably Basecamp. Maybe it’s the books that they’ve written as well, but it’s just interesting to think that different people have different answers for this. I don’t think there’s a right or wrong, but figure it out for yourself and then every day, make a bit of progress towards that.
Mike: I definitely think that this is the type of question that should make it onto the list of questions that you’re going to ask yourself at a personal retreat. But one of the other aspects of that was that, “What does it mean after that 45 years?” I think Patrick had said—and you can correct me if I’m misremembering this—but I think he had looked at and said, “Well, what does that mean to me and how would I quantify it?” I think his basic assessment of how he was going to quantify it was how much impact he’s had on other people over the course that 45 years, and what it means kind of collectively to give himself sort of a numeric score so to speak. I thought that was an interesting way of looking at it as well. Everybody can do it in any way that they want, but I just thought it was an interesting way for him to quantify what that meant to him.
Rob: We had a talk from Hanne Vervaeck, she’s the COO of Thrive Themes. The takeaway I had from her was, “Don’t build what your customers ask for.” Really, it’s don’t only build or just build, you can get a mess. We’ve talked about that a little bit on the podcast in the past. Basically, she talked through handling feature requests; they get hundreds and hundreds of them each month. She talked about instead of implementing every feature customers ask for, do one-on-one customer calls on a call. Shut up and listen, ask questions, and she had a cool process for handling that. In our last couple of years at Drip as it kept ramping up, we were getting probably 100-150 a month when we got acquired, and it was at least double that by the time I left. We had to figure out a way to do this as well. I liked hearing her approach and her thoughts on this.
Mike: The cool thing about when she was discussing that was really, it was a nice way of saying that customers don’t always know what should be built. They have an idea of like, “This is how you should solve the problem.” But the reality is that you should dig into that, and find out what problem they’re actually trying to solve. As opposed to listening to them and implementing things that they say, “You should be doing this. I need a feature that does that.” If you start digging in and trying to figure out more of a jobs-to-be-done type of thing, then you’re going to be much better off if you just blindly implement it, which I think is intuitively obvious to most people, but at the same time, your customers don’t know all the other things that are going on. Quite frankly, you may not even agree with them. You may decide, “Well, yes. That sounds great and all, but it’s just not the right direction for the business, or for the company, or the product,” and you may decide to ignore them because of that. Customers absolutely do not have all the information. Sometimes you have to overrule them.
Rob: I wrapped up the first day with my talk that was titled, The City Bootstrapping in 2019. I looked at some trends that have changed over the past 14 years since I’ve started talking about all this stuff, and then a bunch of things that have stayed the same. I think the takeaway I pulled from there is kind of, there’s more competition these days, but there are also more funding options. I definitely still and whole-heartedly a bootstrapper at heart and believe that the bootstrapping and self-funding are totally viable ways to go. Given that there is more competition, some of the scraps I had with just enormous amounts of VC funding reported SaaS in general.
We, as a community like you and I, with the podcast and the conference were kind of early to SaaS. Now, the big money is coming in over the past eight or nine years. Something I’m talking about is like more funding options are available and that funding is no longer binary. You can look at someone, like a lot of the angel investments I’ve done, where they literally plan to raise a single round, they’re not going to raise institutional funding. They don’t have a board, they never plan to go public or have a unicorn exit. They technically raised money, but they’re still very capital efficient, and they’re using this money to reach escape velocity with their start up faster and maybe a little less painful than that two to three years that we often now see it taking for a truly bootstrapped SaaS to do that.
Mike: I think that there definitely has to be a discussion in our circles around what the terminology actually ends up being, because I think that that’s a source of confusion for a lot of people. If you spend all of your own money on it, or you do it on credit cards, is that self-funding? Well, I guess technically, but at the same time, if you build a product up and then sell it outright to somebody else, and you get a pile of money, and then you put it into your next product, is that self-funding, is that bootstrap? Well, I don’t know. What does that actually mean? I think there’s going to be some discussions over the next coming months or years about some subtle changes to how we view some of the terms like bootstrapping, and self-funding, and maybe bootstrapping becomes more of a state of mind than anything else.
Rob: I would agree. Frankly, I wonder if the terms are—how important they actually are. I think they’re helpful to give context to things when you start to talk and you said, “Look, I’m a bootstrapper. This how I think about things.” That’s helpful versus if I sit up there and said, “Look, I’ve raised VC funding,” then take my advice in that context. That’s why I think it’s helpful, but I do think it’s unhelpful, and that people sometimes get dogmatic about this stuff, and I do not think you should never raise funding. “VC is the worst ever.” Or, “Bootstrapping, it’s just terrible. Why would you even do that?” I’ve heard people say this. I don’t think that’s helpful to do the always never should game. It’s like, let’s keep open minds and realize that this is now a continuum. There is bootstrapping where I literally have $50 to start it, and it has to grow on its own revenue. That’s very hard.
Self-funding is the next thing to the right I will say. It’s the next notch over where it’s like, “Yeah, I have $200,000 to pump into this business,” or, “$100,000 of my own money.” It’s a little different, it’s a different situation in bootstrapping. I’ve done both. I know, it’s very different. And then perhaps the next up step over is taking a small amount of funding from TinySeed or any .vc, or funding source that maybe isn’t expecting you to get huge and you can still build a profitable business selling real product to real customers and then maybe the next notch over is venture capital. Maybe there’s even a notch in between. That’s the thing, it’s not binary anymore.
Mike: I feel like maybe some people get too hung up on the terminology because it feels like their identity is being attacked like, “I’m a bootstrapper and you’re not.” As you said, it’s not binary anymore; it used to be, but now it’s not. I think there’s maybe something about identity crisis going on, but I definitely think that there’s going to be talks and discussions about that behind closed doors. Maybe we’ll come out with something new, or maybe it’ll just kind of be a perpetual issue for the next 20 years, I don’t know.
Rob: Another talk, kind of a last one we’ll cover with Growth, Joanna Wiebe who’s been a many time MicroConf speaker. The takeaway I took from her is that words matter as she talked about copywriting. She ran through seven words that work well in copy. […] here because rattling them off isn’t going to help you. It’s probably somewhere you want to watch the talk when it gets there, or look at Christian Genco’s notes at microconfrecap.com just to see what she talked about and how she presented it.
Mike: Next up, we have Starter. I think that we both want to say a big thank you to Ben Orenstein for being the MC. I think he did a fantastic job. It’s interesting because his talk was actually the last of the conference. Usually, in the past two years when we’ve had an MC, the talks that the MC gave, they were the first talk, and then they were the MC for the rest of it. Whereas Ben, he did the entire conference as the MC and then he got up and spoke which, I mean, that’s just a testament to his ability to get up there in front of everybody.
Rob: Yeah and his talk was great. He always brings it; entertaining, witty, charming. It’s almost like Ben’s here in the room and I’m talking to him. Tall, what did I say? The man with the plan. He’s 6’5 with a tan. You know what I like about his talk is it was, he didn’t even try to pull too many actionable bits out of it, although there was advice and such. It was just a really well told story. I know the story, I’ve listened to every episode of their podcast and yet, I sat there and listened just kind of riveted by how he would talk about the learning from this, and how they did this experiment, and he just set it up so well. Honestly, that’s another one where it’s like, we couldn’t do a justice in five bullet points, that’s one where you need to watch the video when it comes out.
Mike: Definitely. I love the story, and the way that he told it, and how some things came together really well and some things were like, “We discovered this along the way and who knew?” Some of the lessons were, I wouldn’t say they were obvious, but they’re obvious in hindsight. It’s like, “Yeah, that was probably going to be an issue and nobody really thought about it.”
Rob: Just to be clear, we didn’t mention his podcast. It’s called, The Art of Product Podcast and his product is called to Tuple which is a pair of programming SaaS. Another talk we had, it was on the first day of Starter was from Abi Noda. The takeaway I got from him was, “Start quickly by building on someone else’s platform.” Now, he also talked about how there’s a risk in doing that. A platform risk where you’re dependent on them and they could potentially implement a feature and put you out of business. I like that he’s at 21K MRR. He’s only been doing it for—how long is it? Eight months, nine months? It’s not that long.
Mike: Yeah, I think it was a little over a year.
Rob: Okay. It’s pretty quick for a solo founder with no employees. I don’t even the he has contractors to be at 21K MRR. That’s life changing man. The other thing is he talked multiple times about how he’s doing things wrong. He’s like, “I’m not sure about my pricing. I don’t actually think it’s optimal,” but enough things are working that he’s at 21K MRR. Maybe if he optimized to keep—that could be 30 or 40, and that’s great, you can do that. But at this point, he’s bought his own freedom and that’s what I liked about that story. He didn’t get up there and say, “I did everything right and look what all I did.” He’s like, “I did some things wrong and it still worked.”
I think the fact that he built on GitHub, he has a GitHub add-on that notifies you when there’s a pool request that need reviews and notifies you via Slack. He’s in the GitHub marketplace and that was kind of his big marketing approach. It was funny because when I when I talk about stair stepping and how there’s step one, two, and three, he combined step one and three. Step one is that one time downloadable product with a single traffic source, and then step three is recurring revenue. He has recurring revenue, but it’s a single traffic source in essence. I know he has some other traffic but most of it is focused in GitHub marketplace.
Mike: I did find it interesting that the way he opened his talk was the fact that he got fired, that was the day before Christmas or something like that. It was kind of a life-changing event for him and he’s like, “Okay, well now what do I do?” It took him a little while before he figured out, “Well, I kind of wanted to do this and launch my own thing,” and then he did it. There were a bunch of mistakes that he made along the way and things changed for him as he made tweaks to the business and as he basically, just improved things. I think that’s something that a lot of people forget is that, just launching is not the end of the story, that’s not even the destination or the goal, that’s the beginning of it; that’s where you start to learn things and where the rubber hits the road and you’re able to start adjusting what it is that you do. You hear from customers and tweak the business.
Rob: Another good talk was from Lianna Patch, a returning MicroConf speaker. The take away I have from her talk was, “Don’t make stupid copywriting mistakes.” She actually talked and covered a lot of topics, but the stupid copywriting mistake section was cool. She talked about having me-centric copy. Instead of having you and your, it has a lot of I’m, and we, and me. She talked about writing like a robot. Sentences that were too complicated, trying to do too much, and then clichés and nonsense phrases, and had a bunch listed there.
Again, microconfrecap.com if you want to see the specifics of that, but Lianna is in the trenches. She runs Punchline Copy and is on a day-to-day, week-to-week basis is writing a lot more copy than you and I frankly. She really is in the weeds on how this stuff should be done. She actually wrote the copy for bluetick.com, didn’t she?
Mike: Yes, she did. She wrote a couple of emails in the email sequence as well. I gave her access to all the notes and stuff that I had taken from all the customer interviews and customer development that I’ve done. She took that and she translated into the copy for the website. She also went through and tweaked all the onboarding emails and the educational emails that I put out there. Basically, overhauled the entire thing. Honestly, it’s doing its job. It’s just doing it really well.
Rob: That’s cool. I realized I just said bluetick.com but you’re bluetick.io. Sorry about that. Your website looks great. I just went to it. It looks really good. I’ve not seen it redesigned. How long ago did that happen?
Mike: That was a while ago. We talked about that on the podcast, that was probably close to a year ago.
Rob: Did we? I don’t remember it.
Mike: I mean there’s been little tweaks and stuff, it depends on what you’ve seen. I don’t know.
Rob: Yeah. The design it’s far superior to my memory of what Bluetick was. My memory must be dated at this point.
Mike: I’ve had it redone I think just before the last MicroConf.
Rob: Mike, do you hear the music in the background? We are on the 21st floor of a hotel in Las Vegas.
Mike: It’s interesting, I almost feel like there should be security coming over and kicking you out because you’re wearing flip flops and you look too old to be here.
Rob: Yeah, exactly. Wait a minute, I’m not doing either of those things. I did not look too old. Alright, I do a little bit.
Mike: Don’t you remember when that happened at the Hard Rock?
Rob: Yeah. Weren’t they filming some type of like an MTV something around the pool? I think what it was—now, they didn’t say it out loud that we were too old, and this was a few years ago, but we were in beach gear. I was wearing jeans and a t-shirt with flip flops. They wanted you to be in a full on no shirt, swim trunks, totally ripped abs, the whole deal. I was walking, “Sorry, sir. We’re filming.” “Really, what are you filming?”
Mike: I think you should correct that, it’s not us, it was you.
Rob: It was me. No, I was including you man.
Mike: I wasn’t there.
Rob: Alright, forget it. We didn’t notice. We didn’t go back to the Hard Rock the next year.
Mike: That’s true. Although they didn’t demolish it in later years.
Rob: A little known fact, the hotel that the first MicroConf was at was demolished shortly thereafter because it was so old.
Mike: Our next talk was from Omar Zenhom and he’s from WebinarNinja. I thought this was actually a fascinating talk, mostly because there was one takeaway that I think just kind of tramped all others that you could possibly take it away from that which was, “You should build an audience before building a product. If you don’t have an audience, you just simply do not have a product, and nothing you can do is going to change that.”
Rob: Yeah and I don’t agree with him on that. I think that’s how he did it and I appreciate his perspective of how he built the business using an audience, but I have seen too many founders who have built businesses without an audience. Do I agree that it makes it easier? Yes. Do I agree that maybe it’s a thing you should do? Maybe. But if you’re not that type of person, don’t do that. I have known founders and many founders who have amazingly successful businesses and did not start with an audience.
Mike: Maybe I should qualify that a little bit better. I agree with you that you don’t need the an audience before you start, you don’t have to build the audience before you build the product. But I do think that there is a certain amount of momentum that you kind of need to maintain over time and doing that almost requires an audience. That’s not for every product, but I think for any product of some scale and complexity where it takes time to educate people, and they’re not going to be at the right point in order to purchase your product, it may be three months or eight months out, or maybe even two years.
You need to be able to keep them around and the way you keep them around is through some sort of content marketing, or education, and you’re going to be able to catch them at that moment. If you don’t, it’s going to be hard to scale your business to a much higher level than if you’ve got a product and you’re only catching them at the time where they are experiencing that pain point enough to go look for a solution.
Rob: Yeah, maybe. I think of Salesforce, maybe Salesforce is a bad example, but think of just outbound cold email and companies that have grown doing that. They don’t have audience. I mean, I have talked to TinySeed applicants, they have zero audience. Actually, they have almost no traffic to their website, and yet they’re doing several thousand in MRR and growing, because they’re just using other tactics; using traditional sales tactics. The internet marketer space, or in the SMB space, so to speak, it could be a potential thing. WebinarNinja is definitely going after SMBs. It’s going after some aspirational entrepreneurs. It’s going after a crowd where building an audience is super important. It’s a great thing to leverage, but if you’re not in that space, I guess I would not wholeheartedly agree with that assessment.
Mike: Sure. I guess maybe I said that more because that’s the type of space that I operate in now and that I would want to work with. There’s obviously certain ones where I wouldn’t want to, and that I don’t think it would work there.
Rob: Yeah, totally. The other thing I liked that Omar said there, where had one slide where he said, “Take things that are unique about you and make them your advantage.” We talked about his name, how no one else has Omar Zenhom, and that was a unique thing. He could rank at Google really easily for that. No one else was from Egypt. He just talked a lot about himself, about how he used that as a superpower. I thought that was cool because I think it’s something a lot of us, me included, try to fit in and try to not be unique for some reason because we feel like fitting in is important, but I actually like the sentiment of making your unique thoughts, skills, and abilities your true advantage.
Mike: The last talk we’ll cover in this episode is Asia Matos who runs demandmaven.io. I really liked the fact that because of the split between Starter and Growth edition, she spoke at Starter edition. One of the great things about splitting the conference in two is that speakers can hone their talk to the audience. She really honed it down to basically telling them, “Look, there’s lots of different pieces of your sales funnel, but if you want to get to your first 100 customers, you really need to focus on that bottom of the funnel and try and make sure that you are talking to them directly about your product, and exactly what it can do.” Because the middle of the funnel, and at the top of the funnel, those are much broader areas to tackle and they’re harder to do if you’re not able to convert people at the bottom.
If you can’t convert them at the bottom, adding more people into your sales funnel isn’t going to change that and it’s not going to help. It will get you more customers, assuming you can add enough at scale, but if the bottom of your funnel is so leaky that it doesn’t really move the needle for you, then there’s no point in trying to do that. Really focus on the bottom, optimize that, and that’s really going to help you move forward.
Rob: Yeah. This is really good advice and it’s not talked about enough. I’m glad that this was the point of her talk really, is that people think they just need to send more people onto their website or into a trial, but if churning people out, or if people are not going trial to paid, or if people are not going visitor to trial, you have to start at that bottom and work up. Of course, you need another traffic that you can do some type of testing for the numbers to make sense. Certainly, scaling up and starting at the top of funnel just doesn’t make sense. She was a dense talk in a good way. It was a lot of information. She actually compressed a longer talk down to fit in our speaking slot. I think she did a good job of covering how to get your first 100 customers. 17th and 18th MicroConf are in the bag sir, how do you feel?
Mike: Tired.
Rob: Drunk.
Mike: Not yet.
Rob: I know. We’re like one shot. This is a good whiskey though.
Mike: Actually, I’m on my second or third. Probably second right now.
Rob: I’m in the other room. Mike and I always record across the country rather I guess at this point halfway across the country. It’s so weird when every five years, we happen to be in the same place, and we try to record, and there’s echo and all this stuff. We’re in the same hotel room, but it’s a suite, and we have a door closed between us. It’s just a unique experience.
Mike: For sure. I did realize something. Did you think about the fact that MicroConf Europe is going to be the 19th MicroConf, and then next year, Growth edition will be the 20th?
Rob: What a trip. How fitting.
Mike: Yeah.
Rob: I had not thought about that at all, that’s cool. Speaking of MicroConf Europe, it’s in Croatia again, at that amazing ridiculously cool hotel where every room as an ocean view of the Mediterranean. It is October 21st and 22nd of 2019. Tickets will go on sale. They may already be on sale to the early bird list as your listening with this. But go to microconfeurope.com, enter your email if you’re interested in potentially joining us and around 150 other software founders who are trying to get their stuff done.
Mike: Well, I think that about wraps us up for the day. If you have a question for us, you can call it into our voicemail number at 1-888-801-9690 or you can email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 438 | Casual Conversations with Rob & Mike
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike have a casual conversation about what’s going on with each other recently. Some of the topics they touch on include Dungeons & Dragons, personal computer setups, new ideas for MicroConf, and Bluetick/TinySeed updates.
Items mentioned in this episode:
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers and entrepreneurs be awesome at building, launching, and growing software products. Whether you’ve built your first product, or you’re just thinking about it. I’m Mike.
Rob: And I’m Rob.
Mike: And we’re here to share experiences to help you avoid the same mistakes we’ve made. What’s going on this week Rob?
Rob: I just felt like we haven’t done kind of a casual episode in a while where you and I talk about things that are going on. We often get stuck in this odd place where we might have a lot going on, but it’s not necessarily stuff you can talk about or feel comfortable broadcasting to tens of thousands of people. I feel like we’re in a good place, we’re obviously pre-recording this episode because it’s going to go live after MicroConf—I think the week after—and we’re recording it the week before just because so much is going on that whole week. Since we do Growth and Starter now, I mean the week is just torched for me. When do you fly out and when do you fly back?
Mike: I fly out on Friday. I get in at like 8:00 PM or so on Friday night and then I don’t leave until the following Friday. I think my flight is at 12:00 PM or 1:00 PM or something like that.
Rob: Yeah. It’s a full on week for you. I go Saturday to Friday. It’s only six days but still, A, six days, seven days in Vegas is too long. B, pretty much the whole time—I don’t know about you—but all I’m thinking about is, what am I forgetting? What am I missing this year? Oh yeah, we need that opening slideshow for the first 10 minutes of each conference. I need to update that. There’s all these little things and then stuff just really ramps up Sunday. Honest question, do you sleep very well at MicroConf typically?
Mike: I haven’t slept well in 4-5 years so it’s not a really fair question.
Rob: Yeah, you’re the wrong person to ask. I tend to sleep well. I don’t have many sleep problems in general aside from grinding my teeth which is irritating as heck for Sherry. At MicroConf I always struggle and I think it’s just how much I have going on in my mind. I wake up at 5:00 AM and I got to make sure to do that one thing or to tell that to that one person who needs to be at that one place at that time. There’s just a lot of details.
Xander has changed the game for us absolutely. But even then, I’m still thinking about stuff. Frequently what happens is I think of it, “Oh yeah, we need to do that one thing.” Then I wake up in the morning and I text you and Xander and Xander’s like, “Yeah, I already took care of that a week ago.” That’s actually the most often thing, but it still wakes me up in the middle of the night.
Mike: I think when I am in Vegas for MicroConf, I tend to actually sleep better I think when I’m there than when I’m at home, but that’s also I think partially a result of me remembering to bring a sleep mask because otherwise, the blinds of the hotel rooms are absolutely horrendous. You flip and shut but any hotel I’ve ever been in, they’re never very good so you have to have something else.
It feels like it gets so light so early and it just screws me because I tend to be up late and then the light comes and wakes me up in the morning. That’s the biggest problem I think I have. I agree with you in like having all those little things that are hanging out, they come up and you have to remember that, “We have to do this. I have to go back and tweak that from last year’s slides,” or whatever. That obviously comes up just constantly.
I carry around a pen and a notebook at all times just so I can make sure to write things down as they’re happening, or keep track of what has to go on with different sponsors, or different times of each conference. There’s just lots of little things to keep track of and trying to keep them in your brain is just not going to happen.
Rob: Yeah and that’s a good point too, because in my day-to-day workflow, I use email a ton. I use Trello. I just have a system that all goes out the window when I’m at MicroConf because I’m not checking email very much at all and I’m not looking at my Trello board. I have email to Trello basically. If you and I are talking in day-to-day or I’m at a dinner party and someone mentions a book I should read, or a something I should check out, a website, a person I should contact, whatever, I pop open Gmail, I email my own Trello board and it goes to the top of it. The next time I sit on my computer, I put it into the right queue. It’s an Amazon wish list, or an Audible wish list, or I fire off an email or whatever.
I don’t do that at MicroConf because I’ve just not checked my Trello board at all. That pen and paper approach you’re talking about, it’s either that or Simple Note because I have Simple Note on my phone. I just open up like a MicroConf-only to-do that I have to keep referring back to because I just find that my systems don’t work when we’re just running 110% for five days straight.
Mike: Yeah, I agree. That’s why I kind of switched over to the pen and paper. One of the things that tends to drop down on my list is the email and text notifications, though text notifications are different than Slack notifications. I totally don’t pay attention to it. You’re right though, being in a different environment like that where you’re not at your desktop, you don’t have all the tools available to you because you’ve just got so many other things going on, and you’re not really able to get into any sort of deep work because you don’t have your desktop, or laptop, or whatever. It’s just a very different operating environment.
Rob: Do you still use a desktop, Mike?
Mike: I do.
Rob: Are you going to bring that with you to MicroConf?
Mike: No, I’m not. I think the 30-inch monitor would probably be hard to get through.
Rob: For the love of god man, why do you use a desktop at home and not a laptop?
Mike: I have yet to find an actual laptop that I like and like enough to take with me, that’s part of it I think. I built my desktop from hand, because I’ve always kind of built my own computers even back when I was in college. I like the hardware that went with it but at the same time, because I built this 5-6 years ago, actually no, it’s more than that because I just recently reformatted everything, but I didn’t replace any of the hardware. I’m trying to remember, I think I found a software that was installed like 2010-2011. Most of the hardware is that old. I think it’s a hex core machine. It was a top of the line Core i7 at the time. I’ve got 64 gigs of RAM in it and SSD drives. The thing is it’s still a beastly machine all things considered.
Rob: Given that it’s 10 years old or 9 years old I guess, that’s a trip. I guess my question is and it’s going to die eventually. It’ll either fail or it’ll just be too slow to run stuff. When that happens, are you going to buy or build another desktop or you just kind of pony up for top of the line, because you’re in Windows right? It’s top of the line Dell, or HP, or whoever’s making Lenovo these days.
Mike: Yeah. For a while, I’ve been using a MacBook Pro and just ran VMware on top of it.
Rob: Dual booting or VMware. Are you going to just buy a high-end MacBook?
Mike: I don’t think so. I have not heard anybody have great things to say about the newer Macs. Everybody I see talking about them kind of hates them. They’re like, “I wish I could go back to the 2013 model.” Funny enough, I actually have a 2013 MacBook Pro. I use that when I travel, but I go back and forth on this. I think the biggest thing for me is, in order to be productive, I feel like I have to have more screen real estate available to me. I run three monitors at all times. One of them is a 30-inch and a pair of 20-inch monitors. That really works well for me. Going to a laptop kind of sucks. I looked at like the Surface Books…
Rob: You can do that because I run two monitors, two 24-inch or whatever off of my laptop. My laptop is one monitor and it’s retina so it’s amazing, and then I have the two 24s, so I essentially have three. How is that different than what you’re doing?
Mike: It’s not, except that on the one laptop that I was looking at was the Microsoft Surface Book and it doesn’t have the ability to do three monitors at 60 hertz because of the bandwidth limitations or something like that for 4K monitors. They’re so close, they really are.
Rob: That’s the limitation. I wonder if there isn’t a laptop out there—you don’t need to drive three monitors, you just need to drive two because the laptop itself if it’s high-res, you can use that in the center. I have an elevated thing. My laptop is up at eye level, and then I have a remote Bluetooth keyboard and mouse that I sit on my lap, basically on a panel, that’s the center monitor and then I have two on the other side. I just need to drive two. A, will that situation work for you and B, can you find a windows laptop that can drive two 4K monitors?
Mike: I haven’t tried doing that yet. Would it work for me or could I make it work for me? I probably could, but your comment about, “Oh, eventually my machine is not going to be able to do it.” My machine’s lasted long enough. Since that time, processors haven’t gone to six or seven gigahertz. I don’t think it’s an issue of that so much as just being able to have the laptop itself. I don’t have a justifiable reason to just go drop $3000-$4000 on a new laptop.
Rob: I agree and I don’t think you should do that now. I was just wondering when your desktop fails because it will. Something’s going to happen or it’s going to get too slow in the next five years. It’s not going to last 15 years. I was just wondering what you were going to do at that point, but maybe you’ll evaluate it when you get there.
I guess the thing of just working on a laptop all the time is then when you’re traveling, you’re not in this weird environment where you don’t have your stuff and it’s not the way it is. I have a 13-inch MacBook Pro and it is the new one with the touch bar. I don’t love the touch bar but I’ve gotten used to it. When I’m at home, I have extra screen real estate it’s amazing. When I’m on the road, I don’t but you can flip back and forth between the windows and I have the exact same shortcuts, icons everywhere, the same files, everything. It’s the same hard drive.
To me, traveling isn’t this big issue. I hate switching computers I guess is what I’m saying. I figure that’s why most people have moved to laptop so they can be mobile and go to a coffee shop or do something and it’s not this step down, aside from screen real estate, it’s not a step down in productivity. That’s all I was wondering for you.
Mike: That’s something I look at. My preference I think would be able to have a laptop that can do everything that I want and needed to do and that I just have a docking station. Just plug it in and everything’s the same. I can go on the road, or go to a coffee shop, or something like that, but I don’t work well or at least I haven’t historically worked very well in coffee shops or remote locations. It’s partly because I have back problems.
For me to sit at a coffee shop or in some weird chair that doesn’t do a good job of distributing my weight, I have kind of a hard time just sitting there and trying to be productive because I’m just sitting there in pain more than anything else. Maybe that’s part of why it doesn’t matter nearly as much to me as it probably would to somebody else. But I do want to at some point be able to switch and just say I just grab the thing and go, and that’s my entire environment, and nothing’s changed, I don’t have to worry about any of the stuff that you talked about where syncing things back and forth.
Most of the time for the current setup I have like, I have a MacBook Pro but then I have a windows VM that’s running on it. I reinstall all the software there. It’s a very similar environment. It’s not exactly the same, but anything that needs to be there, I just keep it in Dropbox, or Google docs, or something like that. It’s not that big a deal and Chrome keeps all my bookmarks in the same places. It’s not nearly as painful as it probably was 10-15 years ago.
Rob: That’s what I was going to say. With Dropbox and being able to sign in to Chrome and have your browser. You’re in your browser a lot of the time anywhere unless you’re writing code so it is nice. We were talking about MicroConf and we veered into that. I’m pretty stoked man. You’re running a little mini campaign fifth edition D&D on Saturday.
Mike: I am. I’m looking forward to that. I’ve got a bunch of stuff that’s already kind of laid out. I have just a couple of things I got to send you guys. I have to do that in the next day or so. It should be good. I almost wish I could talk a little bit more about it because I think it’s going to be interesting. I’ve actually run it twice so far. It’s not like everything is completely new. There are certain places where I know that there’s a few issues to iron out, but I think I’ve got them all straightened out. I took all of your characters and I gave them to other people and said, I want you to play these characters and I wanted to see how things kind of shook out. I’m hoping it’s well prepared.
Rob: That’s cool. If you’ve done it multiple times, to me it’s like a conference talk. The second, third, and fourth time I do a talk, it just gets better and better until to the point where I get bored of it, and it starts getting worse. I think you’re still on the upswing with this campaign.
Mike: Yeah. We’ll see. I mean it’s just a simple one shot. I expect it to take maybe three—like both times I ran it before, it’s taken four hours. I got to come and tighten that in somehow.
Rob: A little bit, yeah.
Mike: I have an idea of how to do that, I’m not sure you guys will like it though.
Rob: To kill it, do a TPK.
Mike: No. Well, I could do that. The very first room you walk into, “Hey, nobody dies. Let’s go get a beer.” I was thinking something along the lines of like a timer or something like that would be like, “Hey, this is kind of timed here, you’ve got to go a little bit quicker than you normally would.” I don’t know.
Rob: There’s a nuclear bomb waiting to go off and goes off of you if you don’t get this done. Is this campaign something you came up with or is it like a module?
Mike: It’s a module. Somebody ported it from fourth edition to fifth, and then I ported it from that platform because it was made for Fantasy Grounds which allows you to play D&D online. You get tokens and stuff to drag around and stuff, but the module itself because it was ported from fourth edition to fifth edition, it’s got errors in it. That’s why I wanted to play it a couple times in advance because the very first time I run it I was like, “This is a problem. That’s a problem. This is wrong like flat out.” They’re referring to things that just simply don’t exist and the authors never went back and fixed any of it. It’s like, “Well, what’s my interpretation of what it should be or how it’s supposed to be?”
Rob: It’s going to exciting and for folks who don’t know, it’s fifth edition Dungeons and Dragons that we’re talking about which is the current edition of that. You and I have never gamed together before, so this would be kind of cool. Frankly, I got out of D&D until 4-5 years ago when my oldest son got old enough to start playing, then I had the impetus to get into it again. Did you also take a bunch of time off from it and recently get back into it?
Mike: When I graduated from high school and went to college, I think I played once once or twice. I played once in college that I remember and I might have played over the summer the year after I went to college or something like that with some friends back home. But like you, I took a bunch of time off and I started again. When they first published fifth edition, I bought the books as they came out. When those were published I think back in 2014, this was about five years ago, that’s when I got back into it and started rereading stuff.
I basically skipped from the second edition all the way to the fifth and know very little about the third and fourth editions other than what I’ve read about what the differences are between those and the fifth edition. Just because some people I play with have played the version three and I didn’t know much about it. I was trying to educate them about what the differences were, but most of the people I play with now, they’ve either played second edition or they’re kind of new.
Rob: I did the same thing. I played basic back in the early 80s and then played [inaudible 00:15:39]. When the first edition AD&D came out, we played that. I don’t think I ever played second edition, never played third or fourth. When I got back into it, let’s say 4-5 years ago, I Googled, “Coming back into D&D. I’m going to teach my kid. Should we play first edition because that’s what I’m most familiar with or is fifth edition good?” There were some really cool threads talking about the pros and cons of it.
In the end, people are like, “Fifth edition is a better,” not better, that was not the word they used, but it’s a faster rule set. The game moves quicker. It’s easier to understand for someone who’s never played it and there’s tons of new stuff being put out for. You can do either one, but consider checking out fifth edition. It’s nice that the rules are available for free. There’s a PDF that Wizards of the Coast lets you down. I downloaded it and I was blown away by the simplicity and how they’ve gotten rid of all of descending armor class, and all these tables to hit, and saving throws and stuff and it’s just come down to difficulty checks with advantage and disadvantages. It’s just really elegant to me—elegant simplifications of things.
I know folks who are used to the old stuff, adapting something new is like changing programming languages from SEED to Ruby or something, seed.net where it’s like, “Oh my gosh, this is such a different paradigm.” Even if it might be more elegant or whatever, it doesn’t feel that way because it’s different. When I was 10, 12, or 14, I just had hours and hours to pour into it, invented our own stuff, and read every book, but I just don’t have that time now. It’s like, “Look, I have two hours a week maybe three hours to hammer something out. What’s fast and what’s fun to play?”
Mike: Now you can go online and there’s like random dungeon generators, and random character generators, and all the stuff, they’re fantastic tools that streamline things. I remember I used to spend an hour or two creating a character and now you can just go and use one of these tools, and you can have a character done in 10-15 minutes tops. That’s just fantastic.
Rob: Yeah.
Mike: I agree. I love the fifth edition rule set overall the other ones over the basic edition, the AD&D first edition, and second edition just because I think the biggest thing that I think it has going for it is that your character will get more powerful as they level up, as opposed to depending so much on items and things like that in order to make you more powerful. That’s the thing I think I disliked the most about some of the previous editions, because you could just make somebody completely overpowered at a super low level just by giving them a bunch of magic items. Whereas with this one, you’re competitive every step of the way with no magic item which is kind of awesome.
Rob: Right, it makes sense. I know we can talk about D&D. This could be a casual D&D conversation with just Rob and Mike, or tabletop gaming. Folks who don’t play D&D might have already tuned out. Those two listeners are gone. I have a question for you. Have you ever been to a conference where the opening 10 minutes, where the host gets on stage and talks about things, sets the stage so to speak, for what’s going to happen during the conference. What’s the best one of those you’ve ever seen? Have you seen any that have blown you away, I think. Obviously, the reason I’m asking you is, we have adapted ours over the years especially last year changed, the whole slide deck changed, the format changed, and stuff. I’m just trying to think about the best way to keep improving that.
Mike: I don’t know about best. I would say the most interesting one I ever saw—and I wasn’t there personally for this—I’m think this is a little bit of secondhand information. I was there the year after and I think that as a result of that previous year, things have changed in terms of policies of the company. It was at a Altiris conference back in, I want to say 2007-2009 timeframe, or something like that maybe it was even slightly before that, but the founder of the company came in through the back, and went through the aisles, and up on the stage riding a motorcycle.
Rob: Okay. Let’s talk to Xander, and on Monday, I want you to do that.
Mike: Sure. I do have my motorcycle. I could do that theoretically.
Rob: Fantastic.
Mike: I think we may need to update the insurance, and waivers, and various other things.
Rob: And all the things, yeah, and rent a motorcycle, and get the drop to let us drive it through the hall. Alright, so that’s not helpful. That was completely unhelpful.
Mike: That’s my job here I think, to be completely unhelpful.
Rob: Exactly. Doing it 438 episodes since 2010—being unhelpful.
Mike: Yeah. I don’t know what the most interesting thing is. I mean I’ve been to conferences where the founder of whatever the business is, will come out and then give a really good opening talk or presentation, and it talks about the future, but it’s not like a 5 or 10 minute intro. It’s usually the keynote speech or something like that.
Rob: It’s a keynote, right. It’s an actual talk. Obviously, at MicroConf, for folks who haven’t been, you and I get up and we have between 10-15 minutes right at the start of the conference where we welcome everybody, we talk about what MicroConf is, we go through a breakdown of attendees, and stages they’re at, and that kind of stuff. It sets the stage for where we’re headed. Because it would be weird if everyone shows up at 10:00 AM on Monday and you and I get up and we’re just like, “Ladies and gentlemen, Jason Cohen, Chris Savage,” or whoever our speaker is and they get up on stage, because it’s not a program, it’s just a disjointed speaker after speaker. There’s no context for all of it. That’s why we’ve always done the welcome of like, “Welcome.” I don’t know. I’m just trying to think of something that’s not a keynote per se. We could do whatever we want. We can’t do it this year because the schedule is already set but next year, you and I could…
Mike: Are you looking for something different like to change it up in terms of saying how can we do this differently, or just looking for ideas of what other things, or are you just looking for validation of, “Is this the best thing for us to do or not?”
Rob: I think we should do it. I don’t think that’s part of the conversation of us not getting up there. It could be super weird if we weren’t there to welcome the people. Someone has to be there. I think we should do something. I think what we did last year was better than what we have done in prior years. I just am looking, is there anything else we can add to that to make it even better. That’s what I’m thinking about.
I think the best one I’ve seen was at SaaStr. Jason Lemkin got up and talked for maybe 15 minutes. It wasn’t a keynote, it was kind of like the state of SaaStr. He talked about the conference, and he talked about their community, and he talked about their fund, and it really was just an overview. It’s like when you think about writing a 10-page paper. You start high level, and then you dig in deep, and then at the end you come back to high level to conclude, and that’s how I think we structure MicroConf.
We have that introduction that really is this high level context setting, and then at the end, we should wrap it up with context and stuff, and we even have to structure the talks that way. We don’t tend to put a super tactical talk as the first talk on Monday because the vibe is off if you do that. That’s it. I think I might try to think back to what SaaStr’s opening was like and see if there’s any elements of that that could apply to us. We are similar to that opening and that we do set context, but I think there’s just ways to do it better.
Mike: What we do is we set context for the attendees at the conference. An idea that comes to mind—and obviously, there’s zero time to do that for this year—this is actually something that I have had an idea of the within the past couple of years like, “Hey, it would be cool if somebody kind of headed this up.” Not that I really had the time to do it, but it’s something that either we could potentially put together because of the audience and community.
But as you said, kind of give the state of self-funded entrepreneurs, or the state of SaaS applications, or the state of software in general for extremely small software companies like ours. Give a 10-15 minute overview of, “Hey, this is some of the major changes that have kind of come out over the past year. This is how things are progressing. These are things that are going on in the industry that people should kind of either be on the lookout for or be careful of. These are some opportunities that you guys might want to think about.” As opposed to what we do right now which is welcome them to the conference which I do think we still need to do that. But I also think that it would be nice if there was this extra piece there that was kind of an opening that did set the stage for other stuff. I think what that would actually probably take is doing interviews with founders, or calls, or surveys, and things along those lines to help gather information from the community to be able to compile that and show it to them.
I did a talk in MicroConf Europe in 2016 that I basically did that. I asked people for information and say, “Hey, could you submit this?” I’m basically writing a talk about it. I included a bunch of that information, but it’s not something I could potentially do like every single year so I just didn’t keep it up. I think something along those lines could be helpful and useful for the audience.
Rob: Do you know what the name of my talk is on Monday afternoon? You have not looked have you?
Mike: You know, I don’t even know the names of all the speakers.
Rob: I know. Well, we do keep a firewall between speakers and sponsors. Literally, we were talking last week I guess and I said, “Yeah, I don’t know.” I know some of the sponsors because there’s a lot of them returning, but I tend to wait until a day or two before to look through all the sponsors. Because this is our editorial firewall. Advertising versus editorial, we don’t link those two up. I don’t want that to influence decisions.
Mike: Right.
Rob: But the name of my talk is, The State of Bootstrapping in 2019. It’s not exactly what you are talking about, but I am trying to give that overview and talk about trends, and what’s happened over the past 10 years. I mean, you saw my Europe talk from eight months ago, or six months ago. It’s an expansion of that.
Mike: That would be cool. I mean obviously, you don’t want to do a one hour talk at the very beginning like that.
Rob: Exactly.
Mike: I don’t know how you would condense your talk into 10-15 minutes. That’s the other thing I think I would struggle with is how to gather enough data that is meaningful and useful to the audience, and present it in a short enough timeframe that isn’t distracting, or it doesn’t create a whole host of other questions.
Rob: Right. We have all these questions and then it’s like, “Alright and now our first speaker.” And people are like, “No wait, I want to hear more. That was in the middle of it. I’m so confused.” What’s up with Bluetick?
Mike: Oh, let’s see here.
Rob: Oh, that? What’s Bluetick?
Mike: What’s that? Could you spell that? I need to Google it real quick while we’re on a call.
Rob: What’s the news on that? I’m sure people want to hear it. Have you been working on it? Are you too bogged down with MicroConf stuff?
Mike: I’ve been so bogged down with MicroConf stuff and all sorts of other things going on. I think we talked about it a little bit in the last episode or the one before that. Just the timing of MicroConf and lots of other things that are going on has been so incredibly bad that I have not had time to look at it. Last week I had to sit down for a day or two and look at renewing my health insurance, because I think most people renew their health insurance at the beginning of the year and mine’s up for renewal on April 1st. I and had to call them and I’m just like, “Look, this is really bad timing.” They’re like, “We need to have this paperwork in by the 1st. Otherwise, it’s going to renew at the current rates.” I’m like, “Dear god.” It’s the worst timing.
Rob: I don’t renew my health insurance. What does that even mean? You have to reapply and fill out paperwork? I’ve never done that.
Mike: They change the plans every year. I don’t know whether this happens for everybody. They change the insurance plans that are available and the rates for all of them change as well. Sometime they will move things around. It’ll change the prescription coverage, or they’ll change what is covered under a particular plan, or they’ll change copays or which hospitals they cover. It’s just like, “Dear god, this sucks.” I have to renew by April 1st or basically, I just don’t have coverage.
It will automatically renew but because of the timeframe, I have to look at it now and figure out whether what I’m going to be doing now is the right thing or not. I was like, “Well, what about an HSA account or something like that?” They said, “Well, in order for you to do an HSA account, we have to give you entirely new plans because these are not HSA certified.” I’m like, “Oh my god.” Then there’s like a health savings account which is not…
Rob: Wait, that’s not HSA. You’re FSA, flexible spending account.
Mike: I think that’s it. Yeah.
Rob: Yeah.
Mike: Yeah. All these terms that are very close to one another that I’m not familiar with because I’m not in that industry. I’m just like, “I’m so confused. Why do I have to learn this right now and have 10 minutes to do it?” Like I said, it’s just bad timing and lots of major things all in a very compressed timeframe and it sucks.
Rob: You’ve been doing health insurance, taxes, prepping for MicroConf, right?
Mike: Yeah.
Rob: And so Bluetick is just kind of ‘blue ticking’ along?
Mike: Yeah, basically. I mean aside from the things that I talked about the last couple weeks. The webcast I’m going to be doing. That’s scheduled in late April. I’ve been doing little things here and there trying to move things along. I’ve also been doing research on the backend framework that runs Bluetick. Maybe this is a good time to talk about that, or maybe we should talk about it in the future episodes. I talked to Andrew Culver briefly about it because he is the founder Bullet Train which is essentially a framework that you can use as a starting point for your app whatever it happens to be. He takes care of all of the fundamental things like sign in, password reset, Stripe integration, and all these things. Basically, you start plugging the logic of your application.
When I was first building Bluetick and started out, I couldn’t really find anything like that, but I did find an open source project where they said, “Hey, here’s the MIT license for this,” or whatever, “and you can use this stuff.” It looked like it was pretty decent it’s just it didn’t do everything that I needed to do, and then you’re seeing some of the same library. I based a lot of stuff in on it, imported some of the code, but then there’s obviously a divergence there. They did their own thing and I did mine.
I went back and looked at it and it’s much farther along than it was at the time, and more advanced in certain cases which would actually make it easier for me to use that and plug in more functionality, but the database tables don’t line up. I’d have to port things over and deal with that stuff. I’m just like, “Is it worth it?” I’ve done a little bit of exploration there, but by porting it over would give me all the core functions or the features of just like a SaaS application would be taken cared of for me, and I wouldn’t have to worry about them. I just don’t know if I have a good sense of how long it would take to do that or whether it’s worth it. It maybe something I just do it over time and not necessarily worry too much about it.
Rob: I think the question I asked is like, to me, your number one goal right now is more paying customers. It’s ensure problem-solution fit, ensure product-market fit, and more paying customers, and this doesn’t do that. I know that it makes longer term, it’s a good call. If you run this app for 10 years, 20 years, then yeah, it’s good to be on a framework assuming that they maintain it. But I think that’s pushing off the number one priority which is get more people in your funnel, close more deals, get more revenue because that’s really the point you’re at. Just my take.
Mike: I totally agree with that. That’s why I haven’t tried to bite the bullet and actually do it. There are certain issues that the app has in terms of team accounts and things like that. I’m just like, I don’t want to go down the path of some of those things right now until I have more customers and more revenue because it’s just not—I don’t want to say it’s not important—it’s not the top priority.
Rob: Yeah.
Mike: At some point, I’ll do it, but I have a hard time doing it now.
Rob: I would agree. There’s always a lot of distractions like that. I think we talked about last time where customers give you more things or even you have more great ideas and you can never implement. You, as part of being a founder and making the right choice, is picking the ones that are going to have the most impact for you. It’s like, “What are you trying to impact now?” To me, it’s your top line, or bottom line, or however you want to phrase that.
Mike: Yeah.
Rob: Cool. I guess in the interest of time, we’ll wrap up here in the next couple of minutes. There’s some new stuff at TinySeed but it’s in that weird phase where we have all these applicants and I’m interviewing a lot of them. I’m having fun doing it. It’s super busy and then like you, trying to get taxes done, prepping for MicroConf. My talk is not done and I fly out basically in 48 hours. I know. The dirty little secret of you do enough talks, and you find that you’re closer and closer to your deadline.
I remember Dharmesh Shah at BOS years ago; it was probably a decade ago now. We were talking and we’re both doing a talk that year I believe. I might’ve been doing like a lightning talking and he was doing a full one. Anyways, he said, “Yeah, I’ll start my talk at 11:00 tonight,” and he did it the next day. I was like, “What? I’ve been prepping for weeks.” I was obviously much earlier in my conference speaking than he was. He said, “Yeah.” He typically sits until three in the morning and just writes his talk all at once the night before and that that’s kind of his best way to work.
That’s not mine because I don’t like staying up that late, but I do find that the pressure of having to get it done often forces me to really focus and ship good material. I can burn dozens of hours over the course of weeks if I have all this time to write the talk. Now the practice of it I think is another thing. I think having more time to practice does improve the talks. Off to figure out some good times to do that.
Mike: That’s something I kind of struggle with too is, getting the talk done early enough to be able to also do a lot of practice. I don’t know about you, I have little hacks and stuff that I put in a bunch of my slides where if I’m going through it—and I have a couple bullet points—if there is a bullet point that has a period at the end of it, then I know that hitting the button again goes to the next slide and things like that. Most people wouldn’t catch those types of things, but there’s little things that I use as visual indicators for myself to know what’s coming next, or to pay attention to a certain thing, or make a certain point.
Rob: Yeah, that makes sense. I guess the last thing for me is with TinySeed. As with any startup in the early days—here’s the difference actually is, nowadays, if I were to start a new company that’s going to build a software product, I would go to Stripe Atlas and I would form an LLC or a C-Corp through their one click thing and it creates a bank account that does all these stuff. It’s a solved problem now. I know that you’re then going to need some other paperwork as you hire employees and stuff. There’s gusto and there’s benefits. There are ways that have simplified it.
It’s not there yet with starting an accelerator and essentially an investment fund. The nature starting those is not as refined. You go straight to law firm, and you’re forming multiple LLCs that reference one another, and there’s just a lot of complexity there. Luckily, Einar, my cofounder with TinySeed, has taken care of most of that. But there have just been a few points where I’ve been involved in conversations as we’re trying to get term sheets nailed down and stuff. I had one simple question about changing one word to make things clearer and it wound up being this 10 email back and forth that got more and more complicated.
I don’t know if I wasn’t explaining myself well, but it was one of those moments where I finally said, “I give up. It’s just going to have to be complicated on the dock because to change it from pre-money to post-money would require a huge paragraph, and all these exceptions, and this huge bulleted list in what is otherwise a 10-word sentence right now.” If we do pre-money, then it’s 10-word sentence. If we do post-money, I think based on what he was telling me, I couldn’t actually understand, it just [inaudible 00:36:04] out of control. That’s the kind of stuff that is so frustrating to me as someone who is trying to get things done.
I was trying to send things to people three days ago and then it winds up being this back and forth back. We were going to jump on the phone, I know it would have helped, it would’ve been the same conversation that happened via email. I think the perpetual frustration of being a founder is, you always have these things that are just outside of your control or maybe your expertise. They get complicated and they become time sucks beyond what they should I think. I’m learning when to just throw my head up and say, “I’m going to give up on this one. I’m not going to fight this anymore. I’m not going to waste anymore time.” I think as a younger entrepreneur, I wasted a lot of time fighting against things like this rather than eventually just saying, “Look, it doesn’t really matter. Just do it the way it is.”
Mike: You raged against a machine when you were younger?
Rob: Indeed I did, over and over.
Mike: I think that that type of problem happens in general when you start a business. There’s going to be certain things that are out of your control and it sucks because you want to move fast and you want to get them done. At the same time, I think that one of the issues that you’re running into is that, when it comes to legal terminology, there’s hundreds of years of history of legal things that have happened, and there is precedence that has been set. When you say one word versus another word, it can drastically change how that is interpreted in the eyes of the courts. It sucks to have to deal with that stuff.
I don’t want to say it’s exactly like programming because with writing code, you have to be very explicit about what you wanted to do, and then what the exceptions are. But with legal terminology, there’s always—I don’t want to say ambiguity—but there’s different ways to interpret the exact same words. It kind of sucks sometimes.
Rob: Yeah. It is what it is. I know that people out there are probably not in their head. It’s like taxes, legal stuff, there are others. I don’t know, plumbing code in your SaaS app. It’s things that don’t move your business forward.
Mike: You said plumbing code and I thought the actual plumbing pipes.
Rob: That too.
Mike: [inaudible 00:38:09].
Rob: It’s stuff that doesn’t move your business forward.
Mike: Right.
Rob: That’s all I have to say. We should probably wrap it up for the day huh?
Mike: Yeah, I think so.
Rob: Most of our episodes are not this casual. We answer a lot of listener questions as well as dive into detailed and interesting startup topics. If you have a question for us call our voicemail number at 888-801-9690 or you can email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Outta Control by MoOt used under Creative Commons. Subscribe to us in iTunes by searching for Startups.